China’s One Belt, One Road (OBOR) project has been touted by Beijing as being one of the greatest global infrastructure projects ever, and it was said that it would usher in a new era of prosperity in the world. But despite such tall promises, several countries have been wary of the intentions behind the mega project. And the latest to take a stand against Beijing’s “debt colonialism” is Malaysia, which canceled a few OBOR projects out of fear of owing too much money to China.
Saying no to Chinese projects
It was during his recent visit to China that Malaysian Prime Minister Mahathir Mohamad stated that his country will be canceling two gas pipelines and the East Coast Rail Link projects because of fiscal and bankruptcy concerns.
“The projects will not go on. At the moment, the priority is reducing our debt. It will be deferred until such time when we can afford, then maybe we will reduce the cost… If we have to pay compensation, we have to pay. This is the stupidity of the negotiations before. We must find a way to exit these projects. This is our own people’s stupidity,” The Business Standard quotes a statement made by Mahathir.
As per reports, Malaysia’s national debt is currently almost US$240 billion. The previous government reportedly entered into several agreements that put the country at a huge financial disadvantage and worsened the mounting debt problem.
In addition, the current Malaysian government is quite apprehensive about the Chinese-funded projects. And when one looks at the history of countries that accepted Chinese investments, such a cautious approach would be natural.
China’s debt colonialism
China has been accused by many nations, including the U.S., of engaging in debt colonialism. The tactic is quite simple — fund a country’s infrastructure projects by providing loans, wait for the country to become unable to repay the loans, and then strong-arm the poor nation into accepting Chinese demands.
Beijing played a similar game in Sri Lanka, where they eventually took control over the Hambantota Port, even though the Sri Lankan government never wanted to hand over control of the port to the Chinese.
“Concerns about owing unmanageable debts to China have been raised by countries such as Sri Lanka, and with China’s takeover of the troubled port, this has raised questions about a loss of sovereignty,” Jens Roehrich from the University of Bath says in an interview with The Epoch Times.
It’s not just Malaysia that seems to be ditching Chinese-funded projects. Other South Asian and Southeast Asian countries are also saying no to Chinese money due to fear of becoming indebted to Beijing and losing sovereignty over their own lands.
Earlier, Pakistan had said no to the US$14 billion Diamer-Bhasha dam because of the tough financial conditions set up by the Chinese. Nepal also stayed clear of China’s offer of a US$2.5 billion hydroelectricity project after the Chinese company responsible for it was found to have serious financial irregularities. Similarly, Myanmar had declared that it had no interest in Chinese-funded hydroelectric projects last year.
In Southeast Asia, Thailand is spearheading a regional infrastructure development fund in partnership with other neighboring nations to avoid taking on Chinese debt. Meanwhile, the United States has also announced investment projects in Southeast Asia in a bid to keep China away from extending its domineering political ideology in the region.