DHARAMSALA, Jan 18: China’s ambitious Belt and Road Initiative(BRI) made headlines lately for all the wrong reasons and now many countries are either scaling down or cancelling the entire investments.
As it becomes increasingly clear that China’s design of the Belt and Road investments is anything but a debt-trap, many countries are scaling down or scrapping entire projects that are part of China’s BRI amid mounting financial concerns over the continent-spanning venture.
Amid worries over high project costs, nations including Pakistan, Myanmar and Malaysia have cancelled or backed away from previously negotiated BRI commitments in recent months, the cnbc.com reported.
It is understood that the nations that have cancelled or cut down their Belt and Road investments have cited worries over high project costs and their impact on national debt and the economy.
The development does not just confirm global fears over the terms of BRI financing, it could also indicate that developing countries are now more willing to prioritize sovereign interests over their need for foreign investment, the report stated.
The report further stated that these countries want to avoid the same fate as Sri Lanka, which had to hand over a strategic port to Beijing in 2017 when it couldn’t pay off its debt to Chinese companies.
It was seen as an example of how countries that owe money to Beijing could be forced to sign over national territory or make steep economic concessions if they can’t meet liabilities, the report said referring to the Sri Lanka handing over a strategic port to Beijing in 2017.
A spate of BRI projects has since been delayed, suspended, or outright cancellation due to scepticism and pushback against the project since April last year.
The Centre for Global Development has warned last year that 23 countries faced high risks of debt distress due to the BRI.