CHINA’S BELT AND ROAD INITIATIVE Redefining Development and International Relations in Greece and Sri Lanka Alena Clark Advisor: Dr. Jean-Paul Rodrigue, Professor of Global Studies and Geography Readers: Dr. Kari Jensen, Associate Professor of Global Studies and Geography, and Ramiro Campos, Adjunct Professor of Geography Honors Thesis in Global Studies, Spring 2020 Hofstra University Department of Global Studies and Geography Contents Introduction ..................................................................................................................................... 2 Globalization, Neoliberalism, and China ........................................................................................ 5 China’s Belt and Road Initiative ..................................................................................................... 9 The Narratives of the BRI ......................................................................................................... 13 The BRI and Greece...................................................................................................................... 17 The Piraeus Port in Athens, Greece .......................................................................................... 20 The Five Areas of Cooperation ............................................................................................. 22 The BRI and Sri Lanka ................................................................................................................. 30 The Hambantota Port and Colombo Port City Project in Sri Lanka ......................................... 32 The Five Areas of Cooperation ............................................................................................. 35 Discussion ..................................................................................................................................... 45 The Impact of the Five Main Areas of Cooperation ................................................................. 47 Conclusion .................................................................................................................................... 51 Bibliography ................................................................................................................................. 53 Clark 1 Introduction National development strategies and globalization patterns shift in response to the economic system, which determines what a country needs to address in order to improve its economy, social and cultural issues, and environmental policies. While no specific definition exists for measuring what a successful shift from developing to developed looks like, some common issues that developing countries often face include poverty, high pollution levels, and generally poor infrastructure. Several national and international institutions exist to support development activities, such as the International Development Association, which directs funding to developing countries in order to improve equality, economic growth, job creation, and better living conditions (International Development Association, 2020; USAID, 2018). Historically, neoliberal development was defined by institutions like the IMF as a purely economic situation, where the core assumption is if the economy improves then everything else will improve. Development is now described as a comprehensive approach to improving economic, social, environmental, and political conditions (United Nations, 2020). Regardless of how development is measured, the process of development is shaped by continuous shifts in policy and structure that intend to improve the overall conditions of a country. In the past, development has vastly been implemented through the neoliberal model, which prioritizes the creation of a competitive, free-market economy, rapid industrialization, and modernization that is assumed to provide the opportunity for countries to competitively participate in the global trade system. Historically, neoliberal policies were formed by laissez-faire approaches to economics, which simply intended to reduce the involvement of the government in the management of a free market (Olsen, 2019; Stiglitz, 2018). Now, the meaning of neoliberalism is widely debated among scholars because it impacts geopolitics, democracy, philosophy, and Clark 2 economics. Additionally, neoliberalism is not a new concept in the global system, development, or how countries interact, as the idea has been forced onto other countries in the past through means of war, land occupation, or the pressure to conform to the model or risk the development of the country. As a result, this research paper will focus on the economic aspects of neoliberalism as it contributes to global trade and macro-economics, especially through emphasizing free trade and open market policies. The economic, neoliberal approach to development is subject to controversy because the global competitiveness of a nation may not be as advantageous as other countries, the neoliberal model may not be enforced or implemented in a way that accommodates the needs of that country, and that traditionally these policies are often forced upon countries. As a result, this model of development is often associated with economic inequalities that are reflective of both the low wages and high unemployment rates of local labor markets as well as the neoliberal policies that required governments to structurally adjust to macro-economic policies. The Belt and Road Initiative (BRI) challenges the traditional processes of neoliberal development by focusing on development through economic and social reforms. Specifically, China’s own development model has relied on a selective approach to neoliberal policies, such as international investment and providing special economic zones for open market economies, while still maintaining their political and economic sovereignty over their specific development goals and organization. As a large-scale global development project implemented by the Chinese government in 2013, the BRI seeks to provide funding to expand upon infrastructure, improve trade accessibility, and assist with the development of participating countries. Through this initiative, Chinese economic and societal norms are being applied through selective engagement in the global economy in order to build upon its once cheap labor workforce as well as relying on the guidance and support of the state’s political power rather than a supranational influences Clark 3 (Rodrik, 2012). China’s development and its evolution towards the status of an advanced economy is a result of large-scale capital investment and rapid productivity growth to create an efficient economy and reduce poverty, and decentralized economic production (Koboević, 2018). While this development approach is associated with negative outcomes, such as the censorship of information, increased income inequalities, and disregarding environmental protection, China was still able to promote rapid economic growth and gain substantial financial and political influence in global affairs using this model. Based on China’s development model, the BRI seeks to offer a new alternative for countries participating in the initiative. This model prioritizes economic growth and infrastructure improvement without enacting strict conditionalities or reform (Bonciu, 2019). However, this development model also appears as a new way for China to grow as a regional and global superpower by prioritizing its own interests in order to achieve unimpeded trade access around the globe. This research will thus look at how China’s development model influences the development strategies proposed by the Belt and Road Initiative and the effectiveness of this approach regarding bi- and multi-lateral relations and development within each case study. The analysis of the BRI through the case study approach is beneficial in order to analyze the true impact of the initiative in each country, such as how China has invested into projects and what has been achieved, in order to determine the short and long term impacts of the initiative on a national and international scale. China’s presence and investment in other countries through the BRI challenges existing international relations by avoiding political confrontation and instead highlighting economic growth and development. China has historically been a major power in the global system, but it is only within the past two decades that China’s economy and political power has Clark 4 grown to such an extent. China’s international presence as a result of the BRI is quickly, yet indirectly, threatening the global influence and power of countries such as the United States and supranational organizations like the European Union (Yibo, 2019). As a result, many nations and institutions are skeptical of China’s motivations and to what extent the BRI is yet another tool for hegemonic expansion (Greer, 2018). Since the initiative was only established in 2013 and continuously evolves, the research will also try to assess the current situation and how it may unfold by using two case studies to evaluate the impact of the initiative on international relations and development strategies. Globalization, Neoliberalism, and China This thesis will analyze both the impact of the Belt and Road Initiative on the development of Sri Lanka and Greece as well as its effect on their international relations. Through the existing literature and research on China’s relatively new BRI, this thesis will also analyze the