By Commander Jon Ahlstrom, U.S. Navy
In the middle of the 19th century, a developing nation was coerced by what was then an economic powerhouse into relinquishing sovereignty over strategic coastal territory. The period following the First Opium War (1839–1842) ushered in an era of unequal treaties, in which Great Britain coerced China into granting commercial privileges and legal and territorial concessions—for example, Hong Kong and later Kowloon, with ramifications that lasted a century.
In the early decades of the 21st century, a similar pattern is emerging: A rising economic powerhouse coerces developing nations into borrowing money from it to build infrastructure out of proportion to the economic or trade needs of that nation. The result has been similarly catastrophic for recipient countries, but this time it is China that is reaping the rewards. In the case of Sri Lanka, which was unable to repay China’s loan for an unnecessarily large port, the consequence was the relinquishing to China of the strategic port of Hambantota in a 99-year lease.1 And so begins a new era of unequal, opaque treaties—often to the detriment of developing nations.
The 20th-century world order—a U.S.-led order that espouses liberal values and is underpinned by collective security agreements—exacts a gravitational pull on countries in search of individual growth and competitiveness on the world stage. China, one of the greatest beneficiaries of this liberal world order, offers an alternative—an umbrella that encompasses a wide array of projects and presents the world with a different development model—“One Belt, One Road,” later renamed the Belt and Road Initiative (BRI) following international backlash over the obfuscation of the reality of what lay beneath. Launched in 2013 by Chinese President Xi Jinping, the BRI seeks to bind Africa and Eurasia in an array of connective land, maritime, space, and digital trade corridors. The world hegemonic order encapsulated in the BRI represents a top-down approach that history has long rejected. The BRI, unleashing trillions of dollars of investment in partner countries, has given way to a new development model, one that sees recipients not as strategic partners but as strategic dependents.
The examples of the ports of Hambantota and Mombasa, border control adjustments in Tajikistan, and the takeover of public utilities in Zambia (to name only a few) are cannon shots hailing a new era.2 This mercantilism seeks to grow one state’s power at the expense of another. Armed with an unprecedented treasury and insatiable appetite for global commerce and markets, China is committed to the strategic encirclement of Sir Halford John Mackinder’s “Heartland”—a theory that the control of the Eurasian heartland was vital to control of the world—expanding its influence to all the corners of the globe and even into space.
The postwar world order has overseen unprecedented global peace and prosperity safeguarded by the United States. The United States shaped relations among nations by valuing the rule of law, human dignity, and human rights—not narrow pecuniary interests. These created conditions that allowed for economic miracles—old adversaries Japan and Germany became global economic competitors of the United States without needing to expand their militaries to safeguard commercial lanes. The same security safeguard has been offered to all enterprising nations engaged in free commerce.
Emerging from the Second World War, the Marshall Plan was not a handout, but rather a hand up. And in the decades since the plan, U.S. development assistance has helped transform nations from recipients of aid to economic and strategic partners. This transformative development model, emulated by many former recipients that are now themselves donors to developing nations, is now challenged by a surging alternative from China, one devoid of articulated values or principles, propelled only by global ambitions.
China’s alternative model thus represents a clash of both ideas and ideals. The United States may not compete dollar for dollar, but in a contest of values it stands the tallest. U.S. ideals are universal, grounded in human dignity and liberty. Its greatest asset is not military muscle, but the soul of American ideals. Its greatest strength is not the reach of its markets, but the spirit of liberty, so eloquently pointed to by Judge Learned Hand as the standard to which the best hopes of mankind will ever turn. The National Security Strategy says as much:
“[It] celebrates and protects what we hold dear—individual liberty, the rule of law, a democratic system of government, tolerance, and opportunity for all. By knowing ourselves and what we stand for, we clarify what we must defend and we establish guiding principles for our actions.”
The strength of these values is derived from the innate and inalienable universal longing for them by people across the land and seas.
In the face of this contest, the challenge for the U.S. diplomatic and development corps is to clearly contrast the U.S. offer of strategic partnership with that which offers countries only strategic dependence. The U.S. Agency for International Development (USAID) has made explicit that the purpose of U.S. assistance is to end the need for it to exist. USAID does that by working with countries to foster their own capacity to plan, finance, and implement solutions to their development challenges, and their commitment to do so effectively, inclusively, and with accountability. In doing so, the agency helps countries along their own journey to self-reliance so we can look to the day when they transition to new forms of economic and strategic partnership.
The Chinese model of development is dangerous precisely because it often undermines a country’s self-reliance. Where U.S. development assistance is directed at meeting the basic needs of the citizenry in food and nutrition, education, and health, the Chinese approach emphasizes taking care of the political elite to gain commercial concessions. Where U.S. development assistance emphasizes rigorous, transparent procurement to cultivate vibrant, free-market, enterprise-driven development, the Chinese approach is to engage in nebulous deals and unprincipled lending practices that benefit Chinese state-owned enterprises while saddling countries with debt. Where U.S. assistance is animated by an enduring commitment to individual liberty and freedom, the Chinese approach rewards corruption, curtails civil liberties, and encourages surveillance and exploitation of marginalized communities. Where U.S. assistance aims to lift nations to become resilient sovereign partners, the Chinese approach aims to increase its dominance to mute criticism of China and further its commercial and military interests. The choice is clear.
To address the threat posed by China’s assertive lending practices and authoritarianism, the United States must advance a three-pronged effort:
First, while the United States can recognize and respect China’s achievements in alleviating poverty among its own people, it must not shy away from pointing out the costs of China’s policies to its citizens and to those of other nations on whom China imposes its will. The nation must speak clearly against authoritarianism, the subjugation of religious minorities and other marginalized populations, and make no compromise when China’s approaches clash with long-held and long-cherished liberal principles and values. This moment demands strong convictions, to forcefully rebut and reject China’s illusory promise of economic liberty in the absence of individual liberty. It is, after all, the U.S. commitment to liberal values that has made the nation the global leader in saving lives, educating students, and opening markets to drive inclusive economic growth.
Second, the United States must balance its investments among humanitarian assistance, good economic governance that underpins enterprise-driven growth, responsible stewardship of natural resources, and building well-governed, inclusive, and accountable institutions that foster democracy and counter social exclusion. Development programs must emanate from values, and in doing so foster self-reliance at all levels of society—from national governments to subnational institutions to civil society organizations and private sector actors. Investing in the capacity of local partners and disciplined selection of regional programs will, in fact, support individual countries’ journeys over the long term.
Finally, the United States must be strategic in orienting partnerships toward shared goals. It is not the only country concerned by China’s approach to development assistance. Through new, more robust tools—such as the U.S. Development Finance Corporation (created under the 2018 BUILD Act)—and by identifying and leveraging our collective resources, the United States can be most effective in providing developing countries with a powerful alternative to Chinese lending.3
A model of effective collaboration, the Japan-U.S. Strategic Energy Partnership (JUSEP), is a joint effort committed to growing sustainable and secure energy markets across the globe. This interagency program facilitates close coordination between the development and finance arms of each respective government to offer workable solutions to countries in need – noted most recently for its work in energy infrastructure development in the lower Mekong region of Vietnam.4 Since 2014, USAID has spearheaded the U.S. government–led partnership Power Africa to lay the foundation for sustainable economic growth by addressing the lack of access to electricity in much of sub-Saharan Africa. Championing values-based, open, and transparent business practices over a four-year span, USAID and Power Africa oversaw significant power generation infrastructure improvements across sub-Saharan Africa directly impacting the lives and opportunities of more than 57 million Africans.
For more than 70 years, U.S. development assistance has been a powerful tool for improving the lives and livelihoods of people around the world in ways that have made everyone safer, freer, and more prosperous. Today, the nation must build on its record of success and engage in even more dynamic development to affirm and propagate universal ideals of a government that is accountable and responsive to its citizens and peacefully transfers power; of prosperity borne of human enterprise through the power of free and open markets; and of human dignity with freedom of association, expression, press, religion, and thought. In doing so, the United States will enhance its tradition of fostering the peace and prosperity of free and open sovereign nations as responsible members of the international community.
1. Port of Hambantota: With ballooning debt the Sri Lankan government was forced to hand over the Port of Hambantota to China for the next 99 years, giving China a new strategic foothold in an essential commercial and military waterway.
2. Border Control in Tajikistan: China is directly involved in Tajikistan border security through building outpost and—in certain parts of the country—taking over border control completely. Public Utilities in Zambia: Zambia continues to struggle to repay Chinese loans as China moves to take over the Zambian national power utility ZESCO.
3. BUILD Act: The 2018 Better Utilization of Investments Leading to Development (BUILD) Act represents a large overhaul of U.S. development finance efforts and establishes the U.S. International Development Finance Corporation (DFC). The DFC will replace the existing Overseas Private Investment Corporation (OPIC) and raise its budget cap from $29 to $60 billion.
4. Japan-U.S. Mekong Power Partnership: Falling under the umbrella of the Japan-U.S. Strategic Energy Partnership, the Mekong Power Partnership facilitates regional power infrastructure growth. In August 2019, the U.S. Department of State announced an additional $29.5 million toward energy development in the lower Mekong region.
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