Italy joining China's Belt and Road Initiative was an atrocious move: Italian Minister

New Delhi, Aug 1: In a recent interview, Italian Defence Minister Guido Crosetto condemned the “improvised and atrocious” decision made by the previous Italian government to join China’s Belt and Road Initiative (BRI). The Minister expressed concern over the current challenge of extracting the country from the BRI deal without damaging its relations with Beijing.

Defence Minister Crosetto’s outspoken criticism stands as the most forceful message to date from a cabinet member in Italy’s current government. The remarks come as speculation mounts that Italy may choose not to renew the China-Italy BRI Memorandum of Understanding, potentially marking a significant shift in the country’s approach to the initiative.

Mr Crosetto emphasized that Italy has seen limited benefits from its involvement in the BRI, with China seemingly emerging as the sole beneficiary of the partnership. In response, Chinese authorities have previously asserted that both nations have reaped positive outcomes from the initiative.

Italy’s move to join the BRI in March 2019 drew criticism from Western allies, including the European Union and the United States, who have expressed concerns about the initiative’s impact on global trade and geopolitics.

India’s Concerns Over China’s Belt and Road Initiative

India has always remained steadfast in its resistance, citing concerns over sovereignty and regional integrity. At the recent SCO summit, held virtually, India reaffirmed its long-standing opposition to China’s ambitious Belt and Road Initiative.

Prime Minister Narendra Modi refused to endorse the BRI, stating that the project violates his country’s regional and territorial sovereignty. PM Modi stressed that while connectivity projects are crucial for progress, they must not compromise the principles outlined in the SCO charter.

One of the major issues that India has with China’s Belt and Road Initiative (BRI) is the inclusion of the China-Pakistan Economic Corridor (CPEC) within it. The CPEC runs through Gilgit Baltistan, an area that India considers as its territory but is occupied by Pakistan. This move is seen by India as a violation of its sovereignty and territorial integrity, as well as a breach of international laws.

New Delhi also fears that the CPEC enhances China’s strategic presence in the region and raises concerns about the project potentially indebting recipient countries to Beijing. This debt trap diplomacy is viewed as predatory and poses a threat to poor countries who fall into it without realising the consequences. Many countries, including the US, the UK and its allies, share similar suspicions about the BRI, considering it a risk to global stability and economic welfare.

What is BRI

The Belt and Road Initiative (BRI), also known as the New Silk Road, was launched in 2013 by China’s President Xi Jinping. It is a vast collection of development and investment initiatives aimed at linking East Asia and Europe through physical infrastructure.

Over the years, the project has expanded to Africa, Oceania, and Latin America, significantly increasing China’s economic and political influence. The BRI includes both a land route connecting China to various regions by land and a sea route linking China’s coastal areas to Southeast Asia, South Asia, the South Pacific, West Asia, Eastern Africa, and Europe.

Around 147 countries, including India’s neighbouring nations like Sri Lanka, Bangladesh, Maldives, Nepal, Pakistan, and Afghanistan, have joined the BRI by signing Memorandums of Understanding with China and are feeling the pinch of debt.  China’s substantial investments in the BRI, amounting to nearly a trillion dollars, have led to mounting debt in low-income recipient countries. Experts point out that 37% of the debt owed by such countries in 2022 is to China, as compared to 24% in bilateral debt to other countries. There are also claims that some countries owe more to China through opaque operations, deliberately kept hidden from the public eye.

Several countries, including Pakistan, Angola, Ethiopia, Kenya, Sri Lanka, Bangladesh, and Maldives, have accumulated significant debt due to Chinese projects in infrastructure and industry. The economic situation in these countries has worsened as a result, leading to rising public debt and public discontent. China’s lending practices to poorer countries have drawn criticism, with accusations of “debt traps” used to gain leverage over debtor nations. While some instances like Sri Lanka’s Hambantota port project have been cited as examples of this, concrete evidence of Chinese state-owned lenders seizing major assets in case of loan defaults remains scarce.

China’s lending practices differ from those of other major industrialized nations, as it prefers higher interest rates and shorter repayment periods. Additionally, China often includes confidentiality agreements in loan contracts, keeping its lending activities less transparent compared to other lenders.

Overall, India’s concerns over the BRI, along with those shared by other countries, highlight the complex challenges posed by China’s ambitious global initiative. The economic implications and geopolitical impact of the BRI continue to be subjects of scrutiny and debate on the international stage.

As Italy contemplates its exit strategy from the BRI and India maintains its opposition, the future implications of these decisions on global trade and diplomatic relations remain uncertain. The BRI continues to be a pivotal point of contention in international affairs, with countries closely monitoring its impact on the geopolitical landscape.