Wednesday, August 02, 2017

One DEBT, One Road – The Silk Road to Debt Trap

Image result for one belt one road
(Pic courtesy: Geopolitika.hu and for representation purposes only.)

China. What immediately comes to our mind are those grand shows they put up on world stage. But, as they always say, devil is in the detail. That is, GDP growth of China has been relatively high compared to other countries, over past two decades. This may sound very good at the gist of it. Until you do a health checkup on the quality of GDP Growth. The growth on numbers, which is not necessarily good growth. For example: GDP numbers go up, basis what you manufacture. But, whether it is consumed or not matters a lot – for health of a Nation.
Investing cash surplus generated out of trade deficit with foreign nations. Well, it is not necessarily an investment. It is just a foolish method to control cash surplus by making more cash! Insane! Let me explain.

Internal financial health of China:

Following pointers:
  1. There are close to 13 Million flats unsold per this 2016 news report of Reuters.
  2. There are fully built cities that are having everything – but people. Like the one in Zhengzhou. Watch video here. (For more such videos on youtube. Just type in “Ghost Cities China”.)
  3. Sustainable growth is totally dependent when you consume what you produce. China CANNOT consume what it produces, even a significant percent of it. 
  4. Growth in China is inversely proportional to the quality of living. This leaves Chinese people frustrated.
  5. Workers keep building BIG things like gigantic apartment complexes, which the Chinese middle class can’t consume. Similarly, the vast network of High-speed railway network. Hardly 10% is being used. Why was it built then?
  6. When not consumed within, and this high over-production leads to trade & cash surplus.
  7. It is a vicious cycle. If they stop production now, they would crash in a matter of days. So, best thing to keep the production machinery running. And churn out products that none consume.
  8. Who would then consume it? There comes “One Belt, One Road” project. Now, let’s see the devil in OBOR.

Obligations for Chinese:

  1. It is the obligation to keep paying the nations to keep them in check. Be it Pakistan, Sri Lanka, Bangladesh, Myanmar or African Nations. Strategy is same.
  2. Keep offering money to them that they can’t even think of, to be strategically with Chinese.

Sustainable? NOT. That’s because, “One Belt & One Road” will have it’s own set of issues. More pointers:

  1. Imported Chinese workers for Chinese investments abroad have routinely run into problems with local population. This happened in Myanmar (Sittwe-Kunming Pipeline project), Sri Lanka (Hambantotta) & Bangladesh (Chittagong / Cox’s Bazar port projects). Even several African nations (Tanzania / Zimbabwe / Congo / Kenya). Pakistan is no exception. It has security related issues
  2. Ultimately, to keep the Chinese GDP & power to grow, we need more CPECs & debts.
  3. China, as a Nation will crash & disintegrate, the moment the “constructions” & “debt traps” stop. Within & abroad.

Strategic issues:

  1. India is opposed to CPEC, as India thinks, it is being encircled. So, the counter-encirclement process has begun. Diplomatic overdrive with Taiwan, Vietnam & others in ASEAN.
  2. The Torkham gate clashes between Pakistan - Afghanistan has signaled a looming threat to CPEC / CASA / TAPI projects. Which, are to be part of OBOR. Read here.
  3. Kunming – Sittwe pipeline project has run into issues with Myanmar worried about Chinese gaining importance in peace process among rebels with Myanmar Government. Read here.
  4. China’s African problem is well known. Investing in places under Politically unstable leaders threatening the very investments. The Diplomat report sums up very well.
  5. In Thailand – Laos, there has been quite a few anti-China protests over Mekong River ecosystem. Read here.

Classic example: Pakistan. Pakistan is just one of the 68 Nations which would be part of OBOR project. To give you a gist of it, let’s look at the sheer number of issues with OBOR in Pakistan alone.
  1. China-Pakistan signed an agreement to create what is known as China – Pakistan Economic Corridor.
  2. China promised to invest an estimated USD 46 Billion in the project, which is part of One Belt, One Road.
  3. China is investing in ports, power plants, roads / railways to name a few. All seems good, until you read the details.
  4. CPEC doesn’t benefit ALL the provinces of Pakistan.
  5. CPEC comes with a repayment obligation that no learned person would ever take it. For example: Guaranteed rate of return @ 17% per annum.
  6. Equipment & labor would be from China. So, overall not more than one-fourth would be spent on local services. You can read this Dawn.com article for more details.
  7. Rest of 2/3rd cost of CPEC would go back to China in oiling it’s over-production machinery. This is just helping to consume part of that HUGE machinery.
  8. So, to keep significant amount of that machinery running, they need more Pakistans & more CPECs.
  9. This is not all. China has pledged an additional USD 50 Billion today on Indus River Cascade. Report here.
  10. Mind you, most of the said Billions has already made it’s way to China through “purchases of equipments” & “cost of labour” by Chinese Contractors.
  11. At a rate of 2% interest, with a dwindling Pakistani economy, you can imagine how long it will take to repay the debt of USD 96 Billion. Until then, Pakistan would do whatever China asks it to do. Just a gesture enough from China.
  12. On the other side, there are inter-provincial ramifications within Pakistan that they’re beginning to feel the heat of CPEC.
  13. Balochistan, KP-FATA are against CPEC as that doesn’t benefit them much. And, there’s a perception that Chinese are looting their resources.
  14. People of Sindh & Pakistan Occupied Kashmir think Chinese are colonizing them. Recently even Karachi’s Power supply & Stock exchanges are being taken over by Chinese Cos.
  15. In a year or two, CPEC would be dubbed as Curse on Pakistan's Existance by China.
  16. Chinese President Xi Jinping’s pet project OBOR is not showing Chinese prowess. But, it is a sign of desperateness at an unimaginable level. OBOR meet today is one such. Look at their body language. They even brought several world leaders in “China Eastern Airlines”.

Conclusion:

China’s “One belt, One road” is like a cash surplus person. Buying things that one can’t maintain / building home which one won’t live in are similar. things than betterment of self. The investment is to buy people just by pouring in money.

Fact is, it is not sustainable.
"People coming near you for money, won’t stick for long. They will use your money, enjoy good times with you. When you are unable to pay them enough, they’ll move away from you." - Indian proverb
So, when I view through Indian philosophy, “One Belt, One Road” is a trap for both the Chinese & the nations part of it.

In a nutshell: “One Belt, One Road” is, the coalition of cash surplus. Should be renamed as: “One Debt, One Road – The Silk Road to Debt trap.”

(The above got published on OneIndia on July 10, 2017. Read here.)

Wednesday, October 08, 2014

Corruption, secularism & terrorism - II

At the outset, this is NOT about me. :))

This is a cover story...no names shall be taken. Just nicknames. Decipher, if you can.

Two States of India. One sitting CM was arrested & sent to jail. One sitting CM's link with terrorists funding her is now coming to light. Don't you think these two CMs should be sent to jail - along with their 'partners in crime'? Well, we are heading there...inch by inch.

You see, it's always tough to bring a total change in the mindset of people. Until that is not done, we can't root out both corruption & terrorism. As a first step, a mindset is being brought out in the minds of people - even without help of media. These steps may not look big today, but may find a logic in days to come. Watch out.

Imagine. We tell Pakistan sponsoring terrorism in India from its soil. But, what if, a sitting CM is using terrorism as a tool to topple a National Government in a neighboring country? My dear friend Vicky Nanjappa's here will give you some idea. But, question prevailed in my mind, for quite sometime, on the actions of the CM and found no logic. Until recently another dear friend privy to information hinted to me saying, "Yaar, in the coming months, you would see a few CMs go. Almost all of them, somewhere or other related to terrorism." Friend was, clueless. How can CMs indulge / patron terrorism? He started to dig out more on the CMs. And, at times poking my dear friend Vicky also to make sure, if he's on correct path. Kyun Vicky? :))

Then, one fine day, a cold call by a friend to a friend in Tamil Nadu. Discussed with him on state of affairs. Initially, he was reluctant. Later on, he started to share a few information on how Jihadis are running a parallel government in India. And, gave inputs on their support systems. Yes, information was passed on to relevant people - happy that action is being taken. But, all these action ended up with a soft "shut up" earlier. Police's hands were tied in several key points of action - despite information. Some even privately confessed, their helplessness. So, what could one do, than to wait?

Dawn broke! Finally! It's only after the government at the Centre changed, did find some results. Few were arrested in South India & Sri Lanka. My friends were still not satisfied. Some of the terrorists were directly funded / aided & abetted by foreign powers. Made my friends wonder how deep these folks have penetrated! They made a resolution that would work more to root out these folks.

What else they found? Quite stunningly, found a link between Naxals, journos & a few high flying politicians. What?? Yup. "Hot pursuit" is on. They are already facing heat, and they know about it.

It was not without a reason, that PM had invited Heads of States of neighbors for his swearing-in ceremony. There is a huge game plan behind that. Not many understand our PM. He is moving his coins towards his target via unpredictable resources / ways. You can almost not predict him. A few in a South Asian Think Tank actually has given up reasons to predict his next move - after getting it wrong all the time. Not once they got it right. And, this group has Men & Women considered cream of the analysis profession. No, am not joking. Ask them privately, they would confess.

Shall narrate more, what I heard from my friend, on my third post on this series. Stay tuned.

(P.S: Should confess here, our Intelligence Bureau & Police Force have some of the best breed of IPS officers. They only need a go ahead, and would do anything for the Nation. No force could stop - above / under the ground, you know what I mean? All, for the Flag. For that one magic word, "India". One officer, over a cup of hot chai on a winter noon said, "Yaar, tu chinta mat kar. Agar pehle marenge toh hum marenge..." It still resonates in my ears.)

Tuesday, October 07, 2014

Corruption, secularism & terrorism - I

A few months back, these were three keywords during election. But, today, it concerns two State elections & two regional leaders. Guess what? All three, as predicted are on the downward spiral. With International ramifications and interlinked. But, how? Well, let's go through it one by one.

Corruption, as we all know is the 10 letter word that has screwed our growth for the last six decades. (And, several centuries before that, by foreigners.) So, how is it linked to terrorism? And, the great secularism? There comes a crucial point. You need to understand, that corruption is done by greedy politicians, who can go to any extent & loot. That includes, sacrificing National Interest. But, how? Again, who want them to stay in power? The same ones who want to destroy us. Coz, they don't want India to progress. But, how to make them stay? Simple logic. Get a definite vote of people who vote as block, than depending on neutral voters who switch parties every time. Quite unreliable, no?

Who are these people who vote as block? There comes the secularism part. It's from the majority of population, who flip sides each time. But, on the minorities, they usually vote as block - though a considerable part of minorities do switch sides, but that's just a minority.

Sometime back, someone told that Modi got just 18-20% votes, and it wasn't a huge mandate. I told him, dear, we still have "First past the post system" and not a "Proportional representation" in our Democracy. So, if you do a proportional representation, it would have been Sardar Patel as PM and not Jawaharlal Nehru, in the first place. *Silence prevailed*.

So, do I mean to say that certain group of people don't care about corruption but yet vote for corrupt people, as they think, it's 'safer'? Well, our recent election history, says so! And, yes, that magic, has come off this time, in 2014.

Hence, political parties do a two prong attack. One: corruption. Two: sustaining their loot by being in power by just pleasing a certain number of people who are required to win an election.

Where does the terrorism angle come here? As I write this, my sources tell me that, a State's incumbent CM & her party are directly linked with Al Qaeda (ya, the same one!) & ISI (Pakistani Intelligence). But how? Well, informed friends said, PM of a neighboring country recently submitted a dossier with documented evidence of how the same happened. Quite interesting? I mean, quite saddening? Wait & watch, more skeletons in cupboard to come out.

A sitting CM? Funded by terrorists? Yes. It has happened. Quite a boiling pot, in that State. Or should I say, a ticking time-bomb?

Yes, the blot (I mean, plot), is thick. Will take time to correct. Atleast, be happy, the first steps are already on way. Every move is already planned out to make these people vanish, politically. God willing!

Let me continue about it on my next piece. This is just a primer to my next piece on this subject. Stay tuned.