In the aftermath of World War II, the United States actively worked to build the liberal world order, based on our values of democracy, market-based economics and human rights. Why? By 1939, the major powers of Europe and Asia had regularly been at war for the previous 80 years. Had we simply withdrawn back within our borders following WWII, as we did following the First World War, the cycle of violence in the world likely would have continued, drawing us into further conflict.
As the ascendant world power in 1945 following the devastation wrought by World War II, the United States decided to use its influence to build and cultivate a new global system broadly consistent with our principles. Much as our own federal system of government balances between three co-equal branches, as well as national, state and local governmental entities, the new system we created consisted of mutually reinforcing political, economic and security components. In contrast with the previous era, this was a distinctly open and loosely rule-based international order.
With this re-working of the international order, the United States generally made the world more humane, stable and prosperous, while at the same time empowering independent nations, not subsuming or exploiting them as had previous empires.
The centerpiece of this effort was the Bretton Woods agreement, in July 1944, establishing the International Monetary Fund and the International Bank for Reconstruction and Development (the World Bank), followed by the Marshall Plan to re-build Europe; the United States led a successful effort to establish a series of important multilateral institutions. In the creation of the United Nations (UN), the World Health Organization (WHO), the Southeast Asia Treaty Organization (SEATO), the Organization of American States (OAS), the North Atlantic Treaty Organization (NATO), and the General Agreement on Tariffs and Trade (GATT), you can see the dense array of institutions bound by rules and partnerships spread across global and regional security, economic and political realms.
For the past 70 years this system has largely worked, with our allies and former adversaries in Europe and Asia enjoying unprecedented stability, wealth and security, coupled with Western concepts of human dignity, access to basic health and education for all. Millions upon millions of people around the globe have been lifted from poverty and are beneficiaries of global trade and information flows. According to an August 2018 study released by the World Bank, at a time when the world’s population grew by nearly two billion people, more than a billion people have been lifted from abject poverty in the past 20 years alone. This is a measure of progress unprecedented in human history.
For a wide variety of reasons that have little to do with the current administration, the current system is being challenged from within and without. Two important reasons are, first, the nature of the security threat has changed in the past two decades, and second, the American public has become less multilateral in outlook, especially since the end of the Cold War.
While the institutions we built and championed struggle to effectively deal with new economic, security and political realities, a competing system being advanced is the Belt and Road Initiative (BRI) developed and implemented by China since 2013. Inspired by the Silk Road, which for centuries was an important route for trade and cultural interaction connecting the Far East and the Mediterranean, BRI is a development strategy largely focused on infrastructure development. The “belt” is the interconnected infrastructure being built on the Eurasian landmass and elsewhere. The “road” refers to the maritime corridors used for trade.
The initiative is meant to address the infrastructure gap in developing countries in an effort to accelerate economic growth. China states that developing infrastructural ties with its neighboring countries will reduce physical and regulatory barriers to trade by aligning standards. According to CNN and Time, BRI currently has invested in more than 68 countries, encompassing 65 percent of the world’s population and 40 percent of the world’s GDP.
BRI’s initial focus has been infrastructure investment, educational exchanges, construction materials, rail and highway projects, real estate, power grid investments, and trade in iron and steel. China Daily touts BRI as one that will “make full use of both international and domestic markets, through cultural exchange and integration, to enhance mutual understanding and trust of member nations, ending up in an innovative pattern with capital inflows, talent pool, and technology database.”
All of this sounds very positive – uplifting even – but I fear that rather than a new development model, BRI is essentially a neocolonialist effort to build Chinese influence at the expense of the existing liberal global order. China has not been transparent about the criteria for lending BRI funds, and there is no central list of funded projects. The BRI is built entirely on sovereign debt instruments held by the Government of China, not multilateral institutions (the World Bank, International Monetary Fund, Asian Development Bank, etc.), and not subject to Western legal norms.
Such important infrastructure investments made by one country in another are a way to shape the political environment of the recipient country in ways that favor the lender. China may also be using these investments as leverage to impact global trade regulations, votes in multilateral institutions such as the United Nations, and, in the future, to extend the reach of its military.
Some countries are beginning to realize BRI’s potential pitfalls. The Nikkei Asian Review and The Banker, in collaboration with the Center for Strategic and International Studies, examined the progress of BRI projects in eight countries. The key findings from their March 2018 study include: significant project delays and cost escalations; ballooning project debt in recipient countries; and, concerns over loss of sovereignty. In an article, Foreign Policy cited concerns over China’s secrecy in picking BRI countries and projects, as well as the lack of open and competitive bidding processes once projects have been green-lighted.
Contrast the two systems. Rather than being guided by universal principles of democracy, free trade and human rights, or, indeed, an eye toward steady, mutually-beneficial economic growth, China’s BRI seems instead to be guided by the same sorts of neocolonialist attitudes exhibited by pre-World War II governments. The former won out over the latter in our post-1945 efforts. The institutions we helped to build then need some adjustments to adapt to the times we now live in, and a serious effort to do so must, and can only, be led by the United States. As then, our revisions now will only be successful if they reflect the bedrock principles upon which our nation – and the post-war world – was built.
Michael Krull is President & CEO of CRA, Inc., and an adjunct professor teaching politics and public policy at Georgetown University. He also participates as a lecturer for the Georgetown Global Education Institute, which brings senior government leaders from the Pacific Rim to the United States for short-term study tours.
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