MALE, Maldives/HAMBANTOTA, Sri Lanka/NEW DELHI -- As China expands its economic sphere of influence over the Indo-Pacific region under President Xi Jinping's "One Belt One Road" policy, countries receiving financial support to build new infrastructure and other projects hold some expectations. Yet they also harbor apprehension over mounting debts and worries over the transparency and sustainability of these projects.
According to a March 2018 report released by the non-profit American-based think tank Center for Global Development, 23 of the 68 countries along China's "New Silk Road" are at high risk of defaulting on their debts to Beijing. The report warned that there are grave concerns that eight countries, including Pakistan, the Maldives and Djibouti, may find it particularly difficult to pay back the price of being part of One Belt One Road.
It is no easy matter, however, to sever ties with China, and the countries that have received Chinese funding have found themselves in difficult positions.
Composed of some 1,200 islands in the Indian Ocean, the Maldives is known throughout the world for its outstanding beach resorts. Upon leaving the airport, the first thing that meets the eye is a brand new bridge stretching across the emerald blue sea in a gentle arch. This is the roughly 2-kilometer "China-Maldives Friendship Bridge" that connects the airport with the capital city of Male.
"Before the bridge was completed, we used speed boats. When heavy rain began to fall, we couldn't (get) across the sea. But we can go to the town two minutes now (by car). It's very convenient," said a 46-year-old man who runs a travel agency, satisfied.
But the ballooning of the Maldives' national external debts due to loans from China is serious. As of 2016, the amount of external debt had reached roughly one-third of the country's gross domestic product.
"Seventy percent of the national external debt is coming from China," said opposition Maldivian Democratic Party congressman Imthiyaz Fahmy, who is close to President Ibrahim Mohamed Solih, elected in late September this year. "At this rate, we will have no choice but to become like the government of Sri Lanka, which had to hand over a port to China to cover the debt. The (outgoing) Yameen administration fell into a 'debt trap.'"
After assuming the presidency in 2015, the administration of Abdulla Yameen pushed for the Maldives' participation in One Belt One Road, a free trade agreement and other agreements with China, aligning the country with Beijing. With support from Beijing, large-scale infrastructure projects such as the bridge and airport were carried out. The friendship bridge is one such "success" story.
But when the man running the travel agency who praised the bridge was asked if he supported Yameen in the September election, he frowned. "The bridge was necessary. But everyone thinks that the president and ministers were paid huge sums for the development. We don't want such a corrupted regime anymore."
China's policy of ignoring internal affairs when offering aid does not fall in line with international standards, and the country often turns a blind eye to illegal actions and corruption of local administrations. Additionally, the "mutual benefit" emphasized by Beijing also lends itself easily to providing the funds simply if the project is profitable for Chinese companies. In this way, the balance of power favors those in power, but there is a high probability such an approach will result in a public backlash.
Another Indo-Pacific country in a similar situation is Sri Lanka, which has been governed by a series of China-friendly administrations. The government of pro-Beijing President Mahinda Rajapaksa received aid from China in order to promote development of the country, but the national budget remains in the red. Criticized for corruption and an authoritarian political stance, Rajapaksa lost the 2015 presidential election. In his place, a pro-India administration led by Maithripala Sirisena, who ran on a campaign of distancing Sri Lanka from Chinese influence, was born.
Still, untangling Sri Lanka from Chinese affairs has not been an easy task. On Oct. 26, President Sirisena removed Ranil Wickremesinghe, who had been working on strengthening dies with New Delhi, from his post as prime minister. Rajapaksa was then named as his successor.
In the end, Rajapaksa was unable to gain the confidence of the Sri Lankan parliament, but it still appears that the move was a sign the country had taken a step toward China once again.
China is the only country that supports our country without interference," pointed out former Sri Lankan Cabinet minister Bandula Gunawardana, who is part of the pro-Chinese political faction. "India is also an important neighbor, but India is different from China. India will not play same role as China."
(Japanese original by So Matsui, New Delhi Bureau)