Brazil Bebuff

 

BRAZIL’s decision to not join the Communist China’s multi-billion dollar ‘Belt and Road Initiative’ or BRI, comes as a major setback for the latter. Brazil has, thus, become the second country after India in the powerful BRICS grouping, to have said no to China’s initiative. This comes as a reminder for the rest of the world to be cautious about China’s designs, especially given the debt traps that smaller countries have landed in. With India and Brazil refusing to be part of the BRI, the situation has become tricky for China as far as balance of power in five-member BRICS is concerned. In a situation when BRICS is emerging as a non-West grouping of powerful economies, it will be incumbent upon China to act responsibly and not push initiatives like the BRI, which are being viewed by many countries as an arm of Chinese expansionism. There is ample evidence to link the BRI to possible domination of economies by the Communist China.

 

It has been using the BRI to grant loans for infrastructure loans through its development finance institutions. But, its focus is more concentrated on energy, ports, railways, and transport infrastructure. In some cases, like Ecuador, mining was China’s focus area. However, the experience of big-ticket Chinese investments in these sectors has not proved good for smaller countries. Chinese loans landed countries like Ecuador and Sri Lanka in deep economic crisis. Besides, China itself has been growing weaker post-COVID. Hence, development finance coming from China has to be viewed with skepticism. For, it may be aimed at gaining control over resources of countries availing such loans, to give fresh stimulus to China’s troubled economy. Probably, Brazil must have realised this and hence it has decided not to join the BRI. If one takes a look at the history of China’s outreach Latin America and the Caribbean, it comes out that China has been investing heavily in this region in the US’ backyard. In fact, a few years ago, it had come out that the Communist China wanted to increase trade with this region to $500 billion by the year 2025.

 

As per the average of different estimates available, by 2020, China had already achieved the milestone of $315 billion. Of course, China’s focus has been on energy sector and Chinese companies have acquired energy companies in some Latin American countries including in Brazil. In sharp contrast, the US, despite being the largest trading partner, did not pay much heed to the Latin America and the Caribbean region. Obviously, some countries in this region are finding it easier to tilt towards China. But, Brazil has shaken the confidence of China in this regard by refusing to be part of the BRI. Being the largest country and one of the fastest growing economies of the world today, Brazil’s refusal is bound to have larger repercussions on the decision making by smaller countries in the region. This may offer an opportunity to the US to reconsolidate its presence in the region. However, if the US fails to do so, the Communist China may not take Brazil’s refusal lightly and it may work on its well-known machinations against Brazil’s current leadership. Already, India’s refusal has shaken the other countries’ confidence in the BRI. Brazil’s refusal has added to the setbacks that China has been receiving for its ambitious programme. But, this reflects another important aspect that within BRICS, India and Brazil are standing as independent voices equal to other partners. This makes BRICS a democratic grouping where each country takes decision by exercising own sovereign right, but staying together as an important force in reshaping the world order.