By Alex Lo
From the article:
Does China practise stealth imperialism by saddling developing countries with loans they can’t afford with its “Belt and Road Initiative” (BRI) and compromising their sovereignty?
United States Vice-President Mike Pence made that controversial claim at the Asia-Pacific Economic Cooperation (Apec) summit in Papua New Guinea.
“Know that the US offers a better option,” he told Apec. “We don’t drown our partners in a sea of debt, we don’t coerce, compromise your independence. We do not offer constricting belt or a one-way road.”
Actually, his claim that the US doesn’t “coerce, compromise your independence” is demonstrably false, given the long history of American invasions, CIA-sponsored coups, assassinations, sanctions and subversion around the world. And there is a rich economic literature on the failures of Western aid in the third world. But let’s skip all that, since we are talking China.
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So who’s right? Actually, both are being disingenuous, but Pence has vastly exaggerated his claim. Fortunately, there are independent bodies that study these things. A recent study by a Washington-based think tank, the Centre for Global Development, studied the likelihood of debt problems in 68 countries identified as potential BRI borrowers. The centre’s board is headed by Lawrence Summers, the former US treasury secretary.
Its study concludes that only eight countries are at particular risk of debt distress: Djibouti, Kyrgyzstan, Laos, the Maldives, Mongolia, Montenegro, Pakistan, and Tajikistan. Surveying the whole range of borrowing countries in China’s sprawling infrastructure-financing programme, it concludes that the risk of widespread debt distress is unlikely.
“The majority of BRI countries will likely avoid problems of debt distress due to BRI projects,” it concluded.
Read the full article here.