© 2018 by Robert Person.  The views expressed on this website are my own and do not represent the official policy of the U.S. Army, Department of Defense, or U.S. Government.

Mar 26

China's Massive Belt and Road Initiative

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Edited: Mar 26

This article from The Council of Foreign Relations exemplifies the role of multi-national corporations and of democracy in state development. The article gives an overview of how China's aggressive lending polices are now leading to back lash in the developing nations where they have focused their belt and road intitatives. States such as Kenya, Pakistan and Malaysia are in various states of either reevaluating the benefits of allowing Chinese involvement in their countries or rejecting it outright. Democratic states such as those mentioned above are the most able to react to the dangerous lending practices of the Chinese government where in they are required to borrow Chinese money to pay Chinese corporations for Chinese projects. This is an example of how FDI can create backlash in developing nations when it is seen as achieving undue control of domestic resources.

 

The article also examines the different reactions that states are experiencing based on regime type. States that are more democratic are more skeptic and more reactive to Chinese involvement and the corruption that it generates. The populations of these states have the ability to combat corruption at the polls and this makes China's efforts to gain a foothold in these developing nations more difficult. The extreme corruption that is seen in unitary states with heavy involvement is categorical of the problem faced by dictatorships and their attempts to develop. With such a small winning coalition leaders are not incentivized to be candid in their dealing with foreign corporations and therefore the environment is ripe for corruption.

 

 

 

 

 

 

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