By anyone's measure China's Belt Road initiative is a massive project . Trillions are being spent on infrastructure linking China to the world by road rail sea and pipelines and reinvigorating the ancient trade routes from China through Central Asia to Europe Africa and the Middle East to Southeast Asia and India. An ambitious upgrade which is now an eco system in itself . I'm hesitant on it. Welcome to the new trade superhighway. As we continue to navigate China's Belt Road initiative . We begin this program here in Mumbai known as a gateway to India a symbolic entry point to the world's largest democracy.
But not so welcoming to China's Belt Road initiative . Two countries with massive economies accounting for more than a third of the global population . But with a long history of mistrust . I think it's understandable that India is nervous about having this giant neighbor that's just growing so quickly and it's frankly outpaced India in a lot of ways. So I understand
India's nervous about this doesn't want China to be planning the Asian infrastructure but there is potential for India to benefit if China's financing good infrastructure projects around the region. Many of the countries which have grown in for Belt Road projects Stephen Engle for example and some Central Asian republics that are under the under scope getting into debt amongst India's immediate neighbors Pakistan Maldives and Stephen Engle of the three countries which we think in that assistance can become highly indebted. They've always been concerned about China because they share a border and a contentious border a disputed So if border and they've always been concerned about Pakistan. the question is should they be concerned about the MRI I think they'll be most concerned when it's touching upon countries that border them where they have traditionally had their sphere of influence. So whether it's a rail line to Nepal whether it's a port in Bangladesh or a port in Sri Lanka or CPC yes they will be. Absolutely.
At the heart of India's opposition is the biggest single project of the Belt Road initiative. China Pakistan economic corridor which snakes its way from one of China's westernmost cities through the disputed territory of Kashmir all the way to the Arabian Sea. While CPC so far to date is probably the biggest single component of Bahrain it's very important to Pakistan . China has not overnight but in a relatively short period of time reduced. For example the energy shortage that Pakistan has had.
The electricity shortage. So it's very important to Pakistan recipient. It's also important to China because Pakistan has been an ally of China for a very long time. It's a counter counter foil to India and it gives them access to the Arabian Sea.
So it also borders a sensitive area of China which is seen Jong Province. So it's important for both parties that it actually succeed. If I'm a commercial enterprise and I make an investment which is not why I take the hit and I move on as a government my concerns are not only financial. I can for example in the case of Sri Lanka I have a 99 year lease on a port right now which sits very close to India which sits right next to immediate international shipping lane.
I am also investing a billion dollars in Gwadar a port in Pakistan which is also not likely to be financially successful. So I can get these assets right now which are commercial ports but which in the longer term can have other uses as well. Under this scheme in case of Djibouti which is which is debt ridden most of which is owed to China now part of its territory for use by Chinese is a military base. Some of this is definitely strategic . The corridor from China down through Pakistan. It's hard to see
that this is very economic you know going over the Himalayas to get from China to Pakistan. That's really not very practical . So that seems like a strategic move on the Chinese part . I can understand why India would worry that it's being surrounded as China builds that infrastructure in Pakistan. If you put all of India's rail tracks back to back they would circle the globe one and a half times. Eight billion passengers a year. That's the official number. It's much more if you add all the people who travel for free across this vast nation.
Here at Mumbai's hub during crunch hour seven thousand crammed into trains made for just seventeen hundred. The system is antiquated and needs of upgrades. And I see the mood in India changing. You will have quite strong investment from the AIB which is investing for example in the Mumbai metro which is the town city we are in is an example of cooperation around India's infrastructure. Now you don't have to call that the Belt Road initiative that could have happened without the Belt Road initiative.
The reason by Belt Road has been so enthusiastically taken up by many of India's neighbours especially Sri Lanka Nepal and Pakistan is partly a failure on India's part to deliver connectivity to its neighbours. If you look at invested with immediate neighbours with Pakistan it's obviously minimal because of historical reasons. But India has also been unable to develop any meaningful infrastructure and connectivity with Nippon in the last several decades .
Similarly existing piece of Bangladesh where we have very little connectivity that comes with energy. But in terms of goods transport and the same thing is going to case of Sri Lanka as well Mumbai was one of the original stops along the ancient Silk Road. Its port remains the country's largest accounting for almost half of all its container traffic. It's also home to the Indian Navy's Western Command looking west across the Arabian Sea to Pakistan and the Middle East to the east. The riches of Southeast Asia and ultimately China .
Some of the defaults such as Stephen Engle. Not surprising at all. You look at the size of the economy. You look at the kind of investments that have been made. And you also look at the individual projects.
Brought up or gets some traffic off I think one or two ships every week . So it's not surprising that the project has gone down under . And I think something similar is likely to happen in case a wonder which is again about a billion plus dollars is being invested. If you're a recipient country NPRI doesn't matter where you are and China comes along and you negotiate let's say appropriate terms for whatever the project happens to be.
There aren't a lot of other competitors beating down your door. So this has been China's huge advantage. They bring not only the funding but also the expertise to actually execute.
And that is a very compelling package for a recipient country. But the recipients do have to be careful of financial terms . So from India to Central Asia that's where we're travelling next. As we continue to navigate China's Belt and road initiative . One of the countries that stand to gain most of China's Belt Road initiative is Kazakhstan where in a capital Astana Administrative hub of the world's largest landlocked country a country logged between China and Russia. At the center of a balancing act between geopolitics and economic advance.
Astana is an ultra modern city built and the oil riches of what is by far Central Asia's dominant economy. The city celebrating its 20th anniversary on the first date of the country's one and only president. New Sultan Nazarbayev has ruled Kazakhstan since independence from the Soviet Union in 1991. Seen here opening Estonia's international finance center .
A bold move five years in the planning to link the region's capital markets. Much like his country has embraced its role as a key overland pivot of China's Belt Road initial. Key agenda will be economic policy development is diversification of equal. Densification towards creation of a new subsectors of our economy in a different industrial dimension but also be services sector.
And among these three financial services. So we wants to be the financial hub for religion. We wants to help to the region to develop the economies. And I think in response Kazakhstan in a very good track to deliver it. We are naturally the first country that lies to the west of China as we go towards Europe . And we have built our own infrastructure even before the initiative was launched. We have built two thousand five
hundred kilometers of railroads to reconnect east and west of the country. So when the initiative was launched this infrastructure came in handy. We were prepared and we are now cooperating with the Chinese on implementing numerous projects . There is a program to implement 51 projects worth 28 billion dollars in Kazakhstan jointly with the Chinese. They are relating to Belt Road initiative but not exclusively so we'd say it's a very wide range and economic cooperation. Cause one of the key benefits for us is that we're a transit country and transit is a very good way of making money and doing business in our country. For example we have finalized the Kazakhstan part
of Western China Western Europe superhighway which is about 3000 kilometers long. It's cost us something like 3 billion U.S. dollars and that one goes to the Russian border. Another route is taking us to the Caspian Sea. And to that end we have built a new port in on the on the shores of the Caspian Sea. And that road takes us across the Caspian Sea is there by John Georgia. And then from Georgia to Turkey and from Turkey to Mediterranean and further west and east. Another one is the
railroad that takes us from the Caspian from from Moscow to Turkmenistan then Iran and to the Golf . So we have diversified our transportation routes and we have provided for various alternatives not only going north west but also going to. On Kazakhstan's border with China plans to build the world's largest dry port built in Kazakhstan not far from what is known as a Eurasian point of inaccessibility. That's the farthest point on earth from an ocean. Nearly everything crosses into the
west by rail from China . The Chinese invested into that 50 50 with us. So we have a train now that can travel from then in the east of China to port through China to what was then through Kazakhstan and to Istanbul in about two weeks. And we went to want to decrease
the traffic time the transit time to about 12/10 days. So this part of the world used to be the heart of the Silk Road for centuries and centuries. In the past and right now as we recreate the Silk Road in asphalt and rail now in steel Kazakhstan again is recovering its place as the key crossroads in the heart of Eurasia .
Give us a sense of the sectors that will benefit in Kazakhstan When the maritime communication came in. It stole away the shoal if you will. Now gradually learned communications are taking hold . The industries that stands to benefit the most are obviously construction and processing Petro chemistry the products of petro chemistry are needed in road construction but also agriculture and food processing. Already I can tell you that
the volume of continued transportation across Kazakhstan from China to Europe grows twice in size every year for the past seven years and it will reach 2 million containers by 2020. So Kazakhstan stands to gain about five billion dollars in transit fees transit fees every year . Just down the road from the port is what Kazakhstan and China are calling an international free trade zone.
Dual cities in either side of the border a planned strategic Silk Road city that for all intents and purposes for now lies in a Noman's land . During the Cold War this whole area was a controlled military zone. Two towers you see behind me represent the border line . I'm on the Kazakh side. The Chinese side is almost fully
developed but Kazakhstan says it has big plans to catch up. Khorgos is a gateway to Chinese markets. So we agreed between two governments of China and Kazakhstan. So we're going to
develop a special economic zone regime which will help us to develop the treetop over there. So the 80s in the Soviet Union probably was a bottleneck and now we were going to kind of increase we brake through capacity for the goods coming in both directions . But five years after it was first proposed on the Kazakh side at least this projects remains a work in progress. Some people have said that Kazakhstan will be the buckle of the belt but they are challenges before that can happen. As I said we have build the infrastructure. We have also worked very hard with our other neighbors such as Russia and Belarus to establish the Eurasian Economic Union. We are prepared in terms of
synchronized customs tariffs and synchronized synchronized railroad tariffs. So we have not only built hard infrastructure in those two thousand five hundred kilometers of railroads but we have also created the softest front structure if you will removing barriers for trade From Kazakhstan in Central Asia to South East Asia. That's next as we continue to navigate China's Belt Road .
For the Countries in Asia on China's Belt Road initiative offers a massive opportunity to see why infrastructure is key to economic growth. From Indonesia to the Philippines Myanmar to Malaysia to here in Thailand. Projects worth hundreds of billions of dollars are under way to improve connectivity. You can have the physical high performance connectivity in place. Then you can see that that would help spur activities in terms of commerce and investment .
This is one of the big of medium term economic outlook for Indonesia. I'm sure. Starting next year the productivity gain from the impact they're being developed will be start to kick into us that our economic growth. We are not going into building airports and hoping they will come .
We are improving our airports because they are already currently congested. We are improving our ports because they are congested. We are improving our roadways. It helps us achieve our build build build program. And second because it promotes not only connectivity within our country but also outside of our country.
Like many of its neighbors Thailand is betting big on the Belt Road investing tens of billions with the help of China to turn its eastern provinces into an economic corridor and billions more on projects like this a high speed rail from here in Bangkok all the way to China . The mega station will serve as Bangkok's rail hub for fast trains heading north to China through lowers and south Singapore through Malaysia. Although that part of his journey is now in jeopardy also linked the country's three main airports to Thailand's eastern economic corridor .
The EEC we have planned it to be the catalyst so to speak of connectivity not just in Thailand but also with other countries especially our neighbouring countries. Now China is to the north of us so it's natural that the RTS can link up with the Belt Road initiative. You could practically see a corridor . Running North China South to Thailand and to Asia all the way Each country has to look at their own interests has to make sure that you know whatever loans they incur are affordable not only to this generation but to the subsequent generations. The two loans that we have negotiated in the first
one is for them. It's a sixty two point five million dollars . And the second one is for the development of a municipal water project. That's around 200 million dollars. We are currently negotiating a large larger loan and this will be approximately 2.8 billion U.S. dollars and this will be for the railway project. Again improvement of our railway project that this already in bad in this state of bad repair. We have set up actually in Indonesia the priority infrastructure projects. And based on that we identify which project that we feel we can then propose to be included in the VIR. The biggest challenge facing that is
really the execution out of the 50 at the mine. We only were able to utilize about nine. So we are still very far to go. So while the funding is there there are also a number of requirements that we have to follow in order to get that.
Other risk trough unmanageable costs. Oh I think there are definitely many right. I think this is not just about Baton Rouge. As you know Indonesia at the moment I see no reform process. A lot of the infrastructure projects that's happening right now has issues such as regulatory issues you know licensing. We have obviously manpower. We have also land acquisitions issue this number of also local issues. I think that we also have to solve
in order for this to be maximally . Another of the key routes for China will be its corridors. We need more local issues there. Throw up all kinds of questions . The country borders China India and Bangladesh providing not only a channel in the Indian Ocean but also over land West Indian subcontinent. There are concerns over many aspects large infrastructure projects worth incur a lot of indebtedness.
And there's a lot of concern in this government over the risk of overindebted the country and passing on that to the next generation. I think that's a positive thing to worry about the fact that we're not just going all out in building things without regard for our budget position. After years of strict military rule Myanmar's infrastructure is in urgent need of development making it a prime target for the Belt and Road Initiative. The other concern will be how the construction of these projects will pass on in terms of technological knowhow as well as human resources into the country.
Unfortunately for many years China has been supporting Myanmar sometimes in ways where Myanmar people would feel that they haven't really gained very much . So there you have it the views of India Central . China's Belt Road Initiative. I'm Haslinda Amin. Thanks a lot
2021-01-27