By Al-Fassel | 2024-01-18

BEIJING -- As representatives of 130 countries gathered for a summit in Beijing to mark a decade of China's Belt and Road Initiative (BRI) on October 18, a look at the impact of the massive infrastructure project in the Middle East shows concerning trends.

The BRI is a landmark project in President Xi Jinping's bid to expand China's clout overseas, with Beijing saying it has now inked more than $2 trillion in contracts around the world.

Its most high-profile projects have laid down high-speed rail tracks crisscrossing South East Asia and massive transport, energy and infrastructure works through Central Asia.

In the greater Middle East region, BRI projects span 15 nations.

While proponents hail it for bringing resources and economic growth to the Global South, the initiative has also been slammed for saddling poor countries with enormous debt under opaque pricing for BRI projects built by Chinese companies and murky repayment conditions that have been described as a "debt trap."

Beijing has been forced to hand out billions of dollars in bailout loans to BRI countries in recent years to allow them to extend their loans and remain solvent, according to a joint report this year by the World Bank and other institutions.

China said this month that BRI participants owe more than $300 billion to the Export-Import Bank of China.

Undeterred, Beijing will inject more than $100 billion of new funding into the BRI, Xi announced at the summit Wednesday.

The initiative has also drawn scrutiny for its massive carbon footprint and the environmental degradation caused by massive infrastructure projects.

The development of megaports, pipelines, railways and highways could render the Paris climate goals unreachable, researchers from China, the United States and the United Kingdom warned in 2019.

Residents of BRI nations have also complained that the majority of jobs at infrastructure projects are being done by Chinese workers who send their wages home rather than spend them in local businesses.

'Debt trap'

Pakistan is one of a number of developing countries that are heavily indebted to Chinese lenders as a result of the BRI, and has been facing a growing risk of defaulting on loans to China.

China claims it has invested $25.4 billion in Pakistan over the past decade for projects ranging from roads to power plants.

However, economic analysts cite concerns that loans and financial agreements with China associated with the China-Pakistan Economic Corridor (CPEC), a Pakistani component of Beijing's BRI, have exacerbated Pakistan's debt and made the country vulnerable to economic and political crises.

A February analysis by the Middle East Institute found that about 30% of Pakistan's foreign debt is owed to China, including to state-owned commercial banks.

"Pakistan seems keener to take on new financing from China than China may be to furnish it," the think-tank noted.

"Even as the economy wobbles under a heavy debt burden and other acute challenges, Pakistani officials have sought support from China to upgrade the Main Line-1 (ML-1) railroad," it said, referring to a CPEC-linked major rail project in Pakistan.

"The loans under CPEC have been considered economically unviable, and subsequently, Pakistan is now having a hard time meeting its repayment obligations," wrote Abdul Khaliq, a Pakistani representative of the Committee for the Abolition of Illegitimate Debt (CADTM), a network of international activists headquartered in Belgium, on the CADTM website May 16.

"It was warned by economic experts that when Chinese investors start repatriating profits and after 2021, when repayments are expected to rise, if the CPEC does not generate enough growth, then Pakistan's debt from Chinese bank loans risks becoming a burden," Khaliq added.

Such debt worries are particularly concerning in light of reports of failing and wasteful infrastructure.

The $2.6 billion, China-built Coca Codo Sinclair Dam hydroelectric dam in Ecuador has more than 17,000 cracks in its structure that limits its operation.

Dams in Uganda and Pakistan have structural cracks as well.

In Sri Lanka, the $200 million Mattala Rajapaksa International Airport, built as part of the BRI, has been dubbed "the world's emptiest airport."

Alarm bells

In addition to wasteful infrastructural projects on land and sea, the BRI includes an alarming number of digital projects.

China's Digital Silk Road (DSR), the BRI's technological component, is "a digital bridge-building project intended to promote a new type of globalization via digital trade, digital infrastructure, cross-border e-commerce, mobile financial tools, Fourth Industrial Revolution technologies (big data, digital currencies, cloud computing, and so on)," the National Interest reported in June.

According to the International Institute for Strategic Studies (IISS) China Connects database, Beijing has invested heavily in the Middle East with 266 BRI projects between 2005 and 2022 -- a majority of them DSR projects.

"Chinese companies invested in 202 DSR projects (76% of the total investment) compared to 64 traditional physical infrastructure projects (24%)," the IISS data show.

Critics have expressed concern, however, that giving China access to such vast amounts of digital infrastructure opens the door to national security and espionage threats.

Of all Middle East partners, China has invested most heavily in the United Arab Emirates (UAE) with 43 DSR projects and 14 BRI projects, according to IISS data.

Beijing has also offered to upgrade UAE's telecom infrastructure with 5G equipment made by Chinese telecom giant Huawei.

Huawei, a seemingly benign cell phone and consumer product manufacturer, is supported heavily by the Chinese government and has deep links to the People's Liberation Army.

Huawei has 12 5G contracts in the Middle East.

Chinese influence

The BRI has also functioned as a diplomatic vehicle burnishing China's image as leader of the Global South.

That has fueled concerns, however, that China is seeking to rebuild the global world order to its advantage, while opposition voices in BRI countries have decried what they see as increasing Chinese influence in local politics.

China "has used its ties in the Middle East to advance its interests on issues unrelated to Middle East policy, such as its stance on the South China Sea, isolating Taiwan, and limiting international response to its abuses of the Muslim Uighur minority," according to a report by the US House of Representatives Foreign Affairs Committee.

Washington also has warned that China could use the BRI as a pretext to build up military bases around the world in the name of protecting its investments.

For example, a sprawling military base is the centerpiece of the BRI in Djibouti.

The reportedly $590 million facility is Beijing's first permanent naval base outside China and is strategically placed between the Red Sea and Gulf of Aden.

Beijing has said the base is used to resupply navy ships, support regional peacekeeping and humanitarian operations and crack down on piracy.

But its proximity to a US military base has raised concerns of espionage and Chinese power projection around Africa, the Middle East and South Asia.

China is also reportedly building a secret military facility at a port in the UAE.

Intelligence reports suggest that China is using legitimate commercial activity to camouflage its military activities at the port and at other ports in key areas.

They note the Emirati port development is part of a larger scheme to extend Chinese hegemony in strategically situated areas and to facilitate access to the region, via ports that stretch from the South China Sea to the Suez Canal.