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How the US Should Respond to China’s Belt and Road

 
 

Alarmed by China’s rapidly expanding sphere of influence and illiberal norms, the United States and its partners are searching for a way to compete with China’s Belt and Road Initiative. Recent democratic elections in the Maldives and Malaysia provided onlookers with hope that free and fair elections could credibly expel China’s influence. However, this optimism could be premature. Despite the narrative of a growing anti-Beijing backlash, impassioned voters in Malaysia and the Maldives were far more motivated by their leadership’s endemic corruption and poor governance than by the thought of thwarting China.

As evidenced by Sri Lanka’s political quandry, in countries with weak institutions, simply holding elections does not automatically translate into an improvement in a nation’s quality of governance.

In recent months, Sri Lanka was mired in a constitutional crisis after the president suddenly dismissed Prime Minister Ranil Wickremesinghe and appointed the former president, Mahinda Rajapaksa, internationally infamous for his involvement in the Hambantota port project, as premier. The elected government initially came to power on an anti-corruption, human-rights ticket, but coalition infighting limited the real results. While the president has since reinstituted parliament and reappointed Wickremesinghe as prime minister, the political system remains divided and unstable to the concern of many observers domestic and foreign.

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Fortunately, voters in the Maldives and Malaysia are demanding a political alternative, in which elected officials are held accountable — a model Beijing is reluctant to support. Undoubtedly, Ibrahim Mohamed Solih’s September victory in the Maldivian presidential election was a blow to China. Outgoing President Abdulla Yameen was the first Maldivian leader to prioritize ties with Beijing over New Delhi. During his tenure, Yameen supported initiatives that expanded China’s relative economic influence in the Maldives.

Under Yameen’s leadership, the Maldives’ public debt increased substantially thanks to China’s Belt and Road projects. Concurrently, Yameen’s propensity for corruption became more pronounced. Projects such as the China-Maldives Friendship Bridge proved costly and generated insufficient economic returns. Observers suspect that Yameen and his cronies inflated project costs, skimmed money off the top, and directed the remaining Chinese funds to projects critical to his future electoral success. Yameen’s corruption was hardly limited to economic issues. In February, Yameen declared a state of emergency in order to arrest the chief justice of the Supreme Court, prompting a crisis that highlighted the Sino-Indian rivalry. Eight months later, in the lead up to the election, Yameen kept the main opposition leaders locked in jail and raided the opposition party’s headquarters.

During the campaign, Solih pledged to repeal a repressive defamation law and investigate the disappearance of journalists. While there was discussion about the role of China — an effort spearheaded by former President Mohamed Nasheed­­ — Beijing was not the focus of Solih’s campaign, despite international media focus on the China factor after his victory.

The Western press levied similar claims of a Beijing backlash after Prime Minister Mahathir Mohamad won the Malaysian election, ousting the pro-China party that ruled since the country’s independence. In the years prior to the election, Beijing loaned Malaysia unsustainable amounts of money and propped up the country’s development bank, 1MDB, as politicians and intermediaries lined their pockets with stolen money. While 1MDB’s connections to Beijing were noted by many U.S. China-watchers, Malaysia’s struggles with corruption pre-date Beijing’s involvement in the scandal. Ousted Prime Minister Najib Razak’s first re-election in 2013 was rife with charges of vote-buying, paid for by illicitly acquired funds.

Moving forward, the United States and its democratic partners must work in concert to create the conditions that will enable fledgling democracies fighting corruption to succeed. Vice President Mike Pence’s recent announcement of an Indo-Pacific Transparency Initiative, backed by $400 million in U.S. funding, is the right approach. A positive first step for the initiative would be a development assistance program designed to bolster the anti-corruption capabilities of countries that have recently experienced a peaceful transition of power. The U.S. government should move to increase the capacity of countries’ anti-money laundering staff and provide technical assistance and training to those responsible for investigating corrupt practices. To build future resiliency, USAID should enact programs supporting countries’ ability to monitor and evaluate the disbursement of public funding. If these newly-elected governments propose infrastructure projects that meet international standards, the United States and its partners should work collaboratively through initiatives such as the trilateral Infrastructure Initiative to provide a high-quality alternative to Belt and Road loans. Finally, without a strong civil society holding political elites accountable, corruption will continue to thrive. The U.S. government and U.S. NGOs should build the capacity of civil society groups that advocate for transparency and accountability.

The passage of the BUILD Act was a critical step in responding to the economic appeal of Belt and Road. Now, the United States needs to advance a political alternative in countries where voters and leaders want to strengthen institutions, increase transparency, and reduce corruption. To improve governance, state institutions need to be capable of fulfilling their duties and willing to resist political pressure. While it is essential that the United States provide an alternative to China’s Belt and Road strategy, a response limited to economic assistance could fail to prevent another political setback, as is currently occurring in Sri Lanka.

In the Maldives, for example, analysts have suggested that Solih may cut a deal with Beijing to service the country’s reported $3.2 billion debt. To avoid such an outcome, the United States and India should support an IMF assessment, restructuring, and if necessary, bailout. The terms of this bailout could include a provision voiding Chinese loans made in bad faith. Such a move would reduce Chinese economic leverage and ensure that the Maldivian government is only accountable to its citizens and the broader international community — not the whims of Beijing.

By focusing on the anti-China component of these elections and depicting Asian “swing states” as pawns in a geopolitical game, the West needlessly feeds into a false narrative that the United States seeks to stymie China’s rise. This message is far less compelling than celebrating the triumph of shared values.

So far, cabinet officials have shown discipline when describing the Trump administration’s “free and open Indo-Pacific strategy,” depicting it primarily as a blueprint for U.S. regional engagement. To double down on this approach, the United States and its democratic allies should focus on the desire for transparency and good governance among developing countries, rather than touting electoral victories as a rollback of Beijing’s influence. America stands for more than “competing with China” alone. The United States’ Indo-Pacific diplomacy can — and should –support its values abroad.

Abigail Grace is a research associate and Max Hill is a Joseph S. Nye, Jr. national security intern with the Asia-Pacific Security Program at the Center for a New American Security.

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