THE VIEW
The View
by

Track records of trade blocs is mixed at best – so Belt and Road grouping has to be ultra-careful in its planning and purpose

As initiative is targeted at mega-infrastructural projects – some inherently difficult to build – cost over-runs will be inevitable and the whole effort could be prone to ‘white elephant-ism’

PUBLISHED : Wednesday, 17 May, 2017, 10:54am
UPDATED : Wednesday, 17 May, 2017, 10:58pm

No one likes a party pooper, but every so often someone in the room with a long memory punctures the celebratory atmosphere with recollections of things that have happened in the past and thus dampens the party mood.

Shamefacedly, I am about to become that very person, even though I missed this week’s big party in Beijing, celebrating the Belt and Road Forum.

It’s a fair bet most of the attendees would not have welcomed a recitation of the rather sad history of regional cooperation alliances, putative trade blocs and rather more profound regional economic groupings.

What almost all of these associations have in common is that they amounted to much less than they were promised to amount to and, in many cases to practically nothing at all.

By way of illustration, readers are challenged to recall any of the ‘stellar’ achievements of, for example, the Shanghai Cooperation Organisation (which first consisted of founding member countries China, Kazakhstan, Kyrgyzsrtan, Russia, Tajikistan, and Uzbekistan) which apparently has security as its focus.

Then there’s the 22-nation Pacific Community, which is so nebulous as to include France, which, last time I looked, was nowhere near the Pacific.

One of my favourites is the Greater Arab Trade Area, which consists of at least two nations at war with each other and, in terms of trade has achieved more or less zilch.

In that respect it is on par with COMESA or the Common Market for Eastern and Southern Africa, which has many members but very little resembling a common market.

Far more ambitious and extensively overlapping the “Belt and Road Initiative” is APEC or Asia-Pacific Economic Cooperation, which has been around since 1989 and holds annual meetings where heads of state get to dress up in ethnic costumes that suit some of them far better than others.

Every year they solemnly pledge their commitment to cooperation and boosting trade yet, despite some three decades of working towards these goals, they have little more than mounds of paper to show for their efforts.

ASEAN or the Association of Southeast Asian Nations was established in 1967 at the urging of the United States to thwart the advance of communism in the region, however its stated aims focused on the promotion of trade and cultural exchanges, little wonder therefore that the association’s presence did little to advance its real agenda, while its stated agenda was pursued with minimal enthusiasm.

It is tempting to fill this space with a big list of names of other regional groupings and have some unseemly fun at their expense but there are also examples of associations morphing into something far bigger and far more meaningful.

The prime example being the European Coal and Steel Community, formed shortly after World War II, which was the basis for the European Union, a very real and ambitious association, arguably far too ambitious for some of its members, which is why Britain is about to quit.

The European Union has created a very real and powerful trading block because its members worked out that they individually had more to gain by conceding a modicum of sovereignty in return for material benefits. The reason most other groupings disintegrate into little more than talk shops is because the rewards of cooperation are overshadowed by the fears of what they might loose either politically or economically by conceding a degree of autonomy.

The Belt and Road has one major advantage, which could equally be seen as a disadvantage, in as much as China has comprehensively assumed ownership of this process and is waving large wads of cash in the faces of smaller nations who have good reason to be tempted by financial reward

The “Belt and Road Initiative” has one major advantage, which could equally be seen as a disadvantage, in as much as China has comprehensively assumed ownership of this process and is waving large wads of cash in the faces of smaller nations who have good reason to be tempted by financial reward.

That temptation will falter if and when the politics of what looks like subordination become too much for domestic constituencies to stomach. This, incidentally, lies at the heart of the EU’s current problems.

However there is another major problem, which is pretty much the elephant in the room and has less to do with politics than with practicalities.

The “Belt and Road Initiative” is targeting mega-infrastructural projects, all of which are inherently difficult to build, inevitably incur major cost over-runs and precisely because of their grandiose nature, are prone to “white elephant-ism”.

The beauty of small and meaningfully executed projects tends to be lost in these organisations because they are just not showy enough.

Now that Belt and Road Forum (BRF) has it very own acronym it can join the pantheon of other acronyms; history suggests that it chances of success are questionable but then again the rear mirror is not necessarily the right place to start when contemplating how to move forward.

Yet, as every driver will tell you, there are distinct dangers in disregarding use of this mirror.

business-article-page