Sunday, September 17, 2017

the World’s Emptiest International Airport

CreditIllustration by Andrew Rae
The four-lane highway leading out of the Sri Lankan town of Hambantota gets so little traffic that it sometimes attracts more wild elephants than automobiles. The pachyderms are intelligent — they seem to use the road as a jungle shortcut — but not intelligent enough, alas, to appreciate the pun their course embodies: It links together a series of white elephants, i.e. boondoggles, built and financed by the Chinese. Beyond the lonely highway itself, there is a 35,000-seat cricket stadium, an almost vacant $1.5 billion deepwater port and, 16 miles inland, a $209 million jewel known as “the world’s emptiest international airport.”
Mattala Rajapaksa International Airport, the second-largest in Sri Lanka, is designed to handle a million passengers per year. It currently receives about a dozen passengers per day. Business is so slow that the airport has made more money from renting out the unused cargo terminals for rice storage than from flight-related activities. In one burst of activity last year, 350 security personnel armed with firecrackers were deployed to scare off wild animals, the airport’s most common visitors.
Projects like Mattala are not driven by local economic needs but by remote stratagems. When Sri Lanka’s 27-year civil war ended in 2009, the president at the time, Mahinda Rajapaksa, fixated on the idea of turning his poor home district into a world-class business and tourism hub to help its moribund economy. China, with a dream of its own, was happy to oblige. Hambantota sits in a very strategic location, just a few miles north of the vital Indian Ocean shipping lane over which more than 80 percent of China’s imported oil travels. A port added luster to the “string of pearls” that China was starting to assemble all along the so-called Maritime Silk Road.
Sadly, no travelers came, only the bills. The Mattala airport has annual revenues of roughly $300,000, but now it must repay China $23.6 million a year for the next eight years, according to Sri Lanka’s Transport and Civil Aviation Ministry. Over all, around 90 percent of the country’s revenues goes to servicing debt. Even a new president who took office in 2015 on a promise to curb Chinese influence succumbed to financial reality.
To relieve its debt crisis, Sri Lanka has put its white elephants up for sale. In late July, the government agreed to give China control of the deepwater port — a 70 percent equity stake over 99 years — in exchange for writing off $1.1 billion of the island’s debt. (China has promised to invest another $600 million to make the port commercially viable.) When the preliminary deal was first floated in January, protests erupted in response to the perceived sell-off of national sovereignty, a reminder of Sri Lanka’s colonial past under British rule. “We always thought China’s investments would help our economy,” says Amantha Perera, a Sri Lankan journalist and university researcher. “But now there’s a sense that we’ve been maneuvered into selling some of the family jewels.”
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As the United States beats a haphazard retreat from the world — nixing trade agreements, eschewing diplomacy, antagonizing allies — China marches on with its unabashedly ambitious global-expansion program known as One Belt, One Road. The branding is awkward: “Belt” refers to the land-bound trading route through Central Asia and Europe, while “Road,” confusingly, stands for the maritime route stretching from Southeast Asia across the Indian Ocean to the Middle East, Africa and Europe. Still, the intentions are clear: With a lending and acquisitions blitz extending to 68 countries (and counting), OBOR seeks to create the ports, roads and rail and telecommunications links for a modern-day Silk Road — with all paths leading to China.
CreditIllustration by Andrew Rae
This is China’s long game. It’s not about immediate profits; infrastructure projects are a bad way to make money. So why is President Xi Jinping fast-tracking OBOR projects amid an economic slowdown at home and a crackdown on other overseas acquisitions? Economics is a big part: China wants to secure access to key resources, export its idle industrial capacity, even tilt the world order in its favor. But there is also a far greater cultural ambition. For centuries, Western liberalism has ruled the world. The Chinese believe their time has come. “China sees itself as a great civilization that needs to regain its status as leader of the world,” says Kadira Pethiyagoda, a fellow at the Brookings Institution Doha Center. “And America’s retreat gives China the space to do that.”
It’s tempting to see OBOR as a muscled-up Marshall Plan, the American-led program that helped rebuild Western Europe after World War II. OBOR, too, is designed to build vital infrastructure, spread prosperity and drive global development. Yet little of what China offers is aid or even low-interest lending. Much OBOR financing comes in the form of market-rate loans that weaker countries are eager to receive — but may struggle to repay. Even when the projects are well suited for the local economy, the result can look a bit like a shell game: Things are built, money goes to Chinese companies and the country is saddled with more debt. What happens when, as is often the case, infrastructure projects are driven more by geopolitical ambition or the need to give China’s state-owned companies something to do? Well, Sri Lanka has an empty airport for sale.
Sri Lanka may be a harbinger for debt crises to come. Many other OBOR countries have taken on huge Chinese loans that could prove difficult to repay. For example, Chinese banks, according to The Financial Times, recently lent Pakistan $1.2 billion to stave off a currency crisis — even as they pledged $57 billion more to develop the China-Pakistan Economic Corridor. “The projects China proposes are so big and appealing and revolutionary that many small countries can’t resist,” says Brahma Chellaney, a professor of strategic studies at New Delhi’s Center for Policy Research. “They take on loans like it’s a drug addiction and then get trapped in debt servitude. It’s clearly part of China’s geostrategic vision.”
This charge conjures the specter of colonialism, when the British and Dutch weaponized debt to take control of nations’ strategic assets. China insists it is nothing like a colonial power. Its appeal to developing countries, after all, is often based on a shared negative experience of colonialism — and the desire to have cooperative “win-win” trade and investment relationships. Unlike Western countries and institutions that try to influence how developing countries govern themselves, China says it espouses the principle of noninterference. If local partners benefit from a new road or port, the Chinese suggest, shouldn’t they be able to “win,” too — by securing its main trade routes, building loyal partnerships and enhancing its global prestige?
The last time China was a global power, back in the early 1400s, it also sought to amplify its glory and might along the Maritime Silk Road, through the epic voyages of Zheng He. A towering Ming dynasty eunuch — in some accounts he stands seven feet tall — Zheng He commanded seven expeditions from Asia to the Middle East and Africa. When he came ashore on Ceylon (present-day Sri Lanka) around 1406, his fleet commanded shock and awe: It was a floating city of more than 300 ships and some 30,000 sailors. Besides seeking tributes and trade — the ships were laden with silk, gold and porcelain — his mission was to enhance China’s status as the greatest civilization on earth.
After Zheng He’s death at sea in 1433, China turned inward for the next six centuries. Now, as the country has become a global power once again, Communist Party leaders have revived the legend of Zheng He to show China’s peaceful intentions and its historical connections to the region. His goal, they say, was not to conquer — unlike Western empires — but to establish friendly trade and diplomatic relations. In Sri Lanka today, Chinese tour groups often traipse through a Colombo museum to see the trilingual stone tablet the admiral brought here — proof, it seems, that China respected all peoples and religions. No mention is made of a less savory aspect of Zheng He’s dealings in Ceylon. On a later expedition, around 1411, his troops became embroiled in a war. Zheng He prevailed and took the local king back to China as a prisoner.
The unsanitized version of Zheng He’s story may contain a lesson for present-day China about unintended consequences. Pushing countries deeper into debt, even inadvertently, may give China leverage in the short run, but it risks losing the good will essential to OBOR’s long-term success. For all the big projects China is engaged in around the world — high-speed rail in Laos, a military base in Djibouti, highways in Kenya — arguably its most perilous step so far may be taking control of the foundering Hambantota port. “It’s folly to take equity stakes,” says Joshua Eisenman, an assistant professor at the University of Texas at Austin. “China will have to become further entwined in local politics. And what happens if the country decides to deny a permit or throw them out. Do they retreat? Do they protect?” China promotes itself as a new, gentler kind of power, but it’s worth remembering that dredging deepwater ports and laying down railroad ties to secure new trade routes — and then having to defend them from angry locals — was precisely how Britain started down the slippery slope to empire.

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