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Friday, 24 May 2019

Egypt's astute move towards China's Belt and Road Initiative

Mohamed Fayez Farahat , Thursday 2 May 2019
BRI
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Ever since Chinese President Xi Jinping unveiled the Belt and Road Initiative (BRI) in 2013 debate has raged over the nature of the project, its merits, pros and cons. Regardless of what is motivating the debate, there are two basic facts that cannot be ignored: the project, which has already engaged a large number of countries, including traditional allies of the US, has become a part of the reality of the contemporary world, and the profits or losses accrued by any country will be contingent on its ability to interact effectively with the initiative and maximise the potential gains from linking with the initiative.

Egypt presents a unique case. From China’s perspective there was never any question over whether or not to include Egypt. It would be almost impossible to bypass the Suez Canal in the network of overland and maritime routes connecting China with the world, and Egypt lies at the intersection of many of the regions — the Middle East, Europe, Africa — covered by the initiative.

Egypt has clearly indicated to Beijing that it is interested in the initiative and has no misgivings about joining it. Egypt’s willingness to become a founding member of the China-led Asian Infrastructure Investment Bank (AIIB) and its senior-level participation in the first and second Belt and Road summit forums (May 2017 and April 2019) are testimony to this. Egypt could not have responded so positively had it not possessed a stable economy, a successful economic and fiscal reform programme, a reform process generating a healthier business and investment environment and balanced relations with all international powers.

The decision to build a new Suez Canal and to develop the area to the west of the canal as both a service and logistics hub and a new manufacturing zone added to Egypt’s relative advantages.

Apart from anticipated economic returns — they are many and have been enumerated at length in studies and articles — there is another important dimension to Egypt’s participation in the BRI which has to do with redefining the country’s sources of strength.

International relations specialists have formulated numerous theories in an attempt to define state power. Although none of these theories can overlook the realist school which reduces power to its material (economic and military) sources, the complexity of international relations, the accelerating pace of technological revolutions and growing interdependency favour alternative schools of thought which give greater weight to less tangible sources of power.

Liberal institutionalist theory is an example. Proceeding from a materialist understanding of power, it recognises other, intangible dimensions to the development of power which can be defined and measured in terms of “asymmetrical interdependence” — discrepancies in the degrees of interdependency in the international order. Such discrepancies are manifested in the extent to which a country can influence change or be influenced by changes in the international order. Degrees of “interdependency” between one country and another mirror the distribution of power within the international order.

This theory gave rise to a definition of power that can be applied in the context of global networks, a network being defined as a set of relationships that form a structure.

The concept helps identify how the actors within a network interrelate. It proceeds from the premise that the form and nature of structural relations between the units in the global network are no less important than the material properties of the individual state when it comes to assessing power. Network analysis has been applied to determine the configuration of international relations and the relative power of state entities within that configuration. It studies the linkages between the components of the network, the entities/states, and how they relate to one another, the degree of interconnectivity between them, and the centrality or relative weight of each entity/state in the network.

From this perspective the BRI is not just a system of direct communications created through a series of interregional infrastructural projects. It is a framework for building a collection of networks or new operational structures to serve the purposes of trade, investment and capital flows, maritime cooperation, energy distribution and more. Following are two examples of where Egypt could link into the new structures and networks created by the initiative.

First are the new institutions that will function as the BRI’s financial arms, the Silk Road Fund and the AIIB, and the funding institutions for international groups associated with the BRI such as BRICS and its financial organisations, the New Development Bank (NDB), and the BRICS Contingent Reserve Arrangement (CRA).

The second relates to China’s efforts to promote the development of an “international group” along the course of the Maritime Silk Road by identifying and building realms of mutual interests and introducing collaborative mechanisms that will give members a collective identity and increase the connectivity between them. Perhaps the most significant move in this direction was the Chinese proposal discussed in the “Vision for maritime cooperation under the Belt and Road Initiative”, a document that Beijing released in June 2017.

The proposal identified five areas for cooperation among the countries that become part of the Maritime Silk Road: preserving the marine ecosystem and biodiversity; developing and optimising the utilisation of marine resources; enhancing maritime security; the development of “maritime public services” and; fifthly, “collaborative governance” which would include developing high-level dialogue mechanisms for marine affairs.

The foregoing are only two examples of the new types of networks and collaborative systems that the BRI is introducing. They offer Egypt the opportunity to position itself as an important intersection or node of global interdependency in a manner that will augment its sources power. The strategic decisions to build the new Suez Canal and to join the BRI at the ground floor were a translation of President Abdel-Fattah Al-Sisi’s astute prognosis of the profound transformations taking place in the world order and its structures.

 

*This story was first published by Al-Ahram Weekly.  

 

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