Fred Hobby sheds light on an emerging Chinese Belt and Road Initiative in Sri Lanka. In the midst of a national debt crisis and environmental backlash, is this the answer to prosperity?
China’s Belt and Road Initiative (BRI) has laid its foundations right across the Indo-Pacific. Infrastructural developments have underpinned a large number of countries in the region. More recently, Sri Lanka has been a focal point for developments as it holds a pertinent geo-political position at the impasse from west to east.
Colombo, the capital city on the west coast of the island already takes advantage of its geographical location. An active commercial port in the capital ranks in the top 25 most used container ports in the world, with more than 60% of the island nation’s international maritime trade passing through the facility. However, despite this, Port City Colombo (PCC) is in fact a different development altogether. It is a Chinese project on reclaimed land off the coast of Sri Lanka’s capital city.
Similar to Johor in Malaysia, Sri Lanka’s parliament passed legislation to allow the area to become a Special Economic Zone (SEZ). Economic advantages of this are salient, as it lays the foundations for the creation of the PCC. Most importantly, within an SEZ there are lowered barriers to entry for Foreign Direct Investment (FDI). Thus, this allows money to flow in and out of the region from abroad more easily. This is undertaken to stimulate economic growth and international interest and it is often is preceded by a struggling fiscal situation in a region, as is the case currently in Sri Lanka.
It is yet to be seen how the PCC will fare, whether it will stimulate economic growth or face a similar fate to Forest City in Malaysia, a similar BRI funded project. Will there be economic benefits and, crucially, will these outweigh any environmental issues thrown up by such a development?
Hambantota International Port — a blast from the past
Past experiences with Chinese infrastructure projects have haunted the memories of many Sri Lankans. When discussing BRI projects, Sino-critics are quick to jump to the case of the Hambantota International Port in Sri Lanka. This example rightly demonstrates the gravity of failure when going into business with Chinese companies, but it is often misconstrued.
In summary, Hambantota International Port became synonymous with the phrase “White Elephant“, meaning it was a useless possession that is difficult to maintain and has no utility. In the case of the recipients the project was a cataclysmic disaster in conjunction with numerous economic failures by then president Mahinda Rajapaksa.
Hambantota became known as one of the prime examples of Chinese debt trap diplomacy that has frequented their BRI in Africa and parts of the Indo-Pacific. China lent them money to help facilitate the construction of Hambantota. On the back of the ensuing debt crisis that the host nation inevitably faced, the Chinese turned round and offered to pay off the Sri Lankan debts in exchange for full use and ownership of the Hambantota port. Indian commentators, for example, frequently argue that China is using the BRI to pursue “strategic ambitions” in South Asia, in this case “creating a Chinese naval outpost”.
Arguments have ensued both politically and in academia blaming differing stakeholders for the failure of the Hambantota international port, but the important thing I wish to get across is the memory of this failure. Whether it was from incompetent domestic political decisions of Rajapaksa, or Chinese debt-for-asset swaps, it still left a bitter taste with many in the region and internationally.
Back to the present
In PCC, land reclamation has stopped, infrastructure is nearing completion and the city is set to open its doors to public consumption in April of 2023. The Chinese company facilitating the project is called the Chinese Communications Construction Company, or the CCCC. The CCCC has issued statements that the City will be a “Smart City” and that they are “focusing on intensive, intelligent low carbon construction”. The city itself has a range of commercial and residential opportunities that come with full scale metropolitan constructions. It will offer the opportunity to live, work and educate all in one vicinity.
As the project is now near complete, environmental arguments against the man-made island city have been all but lost. That said, it’s still worth considering how the proposed economic benefits stack up against the sustainability concerns, as this can be used as a measure of success in the coming years. Essentially, what we want to ask is: “Was it worth it?”
- Set to be “a tropical paradise version of the Dubai International Financial Center, only twice as large”.
- Changing the geopolitical fabric of the region, providing a Chinese port connecting east to west.
- Indian, Sri Lankan and Chinese property developers have shown interest in the project.
- Port road access, you will be able to access the port city from the airport upon arrival.
- Globally recognised educational brands will be setting up schools there.
- The International Arbitration Centre SIAC has set up an international commercial dispute resolution centre there, it will soon become a centre for influential regional debate.
- Wide range of international cuisines with world renowned food and beverage providers. Creating a “watering hole” concept for Duty-Free shopping as well as a world-class dining destination in the City of Colombo.
- Tech advancements shown in a new interactive website to showcase one destination where all your questions can be answered on the subject of the new port city, here: https://www.portcitycolombo.lk/
- Biodiversity is inevitably affected by rock extraction.
- Environment for marine wildlife altered drastically, affecting fish stock, coral reefs, and sand dunes locally.
- In addition, an estimated 30,000 fishermen have been affected due to its impact on their livelihood. Fishermen living along the coastal area of Kamal Thota have lamented that their incomes have already declined due to the depletion of fish resources as a result of sand mining.
- Land reclamation is a traumatic change for the local environment. As the project progresses issues such as water pollution, waste-dumping, port-dredging, discharge of ballast water from cargos, soil pollution, acidification, and acid rains will be commonplace for the area. Many of these are irreversible.
- Sand mining is also expected to affect lagoons, particularly the famous Negombo lagoon. Though the PCC project has completed three Environmental Impact Assessments (EIA), the criticism has been that these assessment reports have not addressed several related issues adequately enough.
Weighing it all up
In many ways, this is the same story as the now abandoned Forest City, and yet its fate is not necessarily the same — PCC may still succeed in an economic sense.
Extreme views, such as those expressed by Sarah Moser, argue that these developments are little more than Chinese Imperialism. Indeed, Moser believes that PCC could be regarded as a neo-colonial outpost for the expansionist agenda of China.
While Moser’s views are perhaps a tad zealous, it would be wrong to diminish the potential for Chinese gains in the region as a consequence of this new development. Perhaps this could be seen as opportunism, a crude attempt for Chinese offshore diplomacy.
Regardless, despite the efforts of the CCCC to suggest the salience of the environmental management of PCC’s construction, there is no denying the irreversible disaster that is land reclamation. Once again, a futuristic city development has torn up a coast line, decimating precious habitats and the livelihoods of those who depend on them.
Hambantota is a stark reminder of the dangers of going into bilateral deals with Chinese companies. It is not to say that PCC will not be successful, let us hope that fewer mistakes will be made by the home nation to allow this project to prosper economically. Hopefully, the sacrificed the coastal environment go some way to stabilise the economy of Sri Lanka and prevent them sinking yet further into debt.