New Realms of Influence: Infrastructure Development, Financial Institutions and Markets

Date01 July 2021
Published date01 July 2021
AuthorAnita Sengupta
Subject MatterResearch Articles
International Studies
58(3) 324 –341 2021
© 2021 Jawaharlal Nehru University
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DOI: 10.1177/00208817211028043
Research article
New Realms of
Influence: Infrastructure
Development, Financial
Institutions and Markets
Anita Sengupta1
The renewed emphasis on Asia’s connectivity infrastructure has brought into
focus the complex relationship between pursuing economic development
through trans-state linkages and promoting political agendas. The formalizing
of transit flows across the Asian space has involved financial, technical and
regulatory relations bringing together the interests of actors at various levels.
This article examines how these have been used by China to create new realms
of influence through a study of the working of the Asian Infrastructure Investment
Bank and Chinese markets across Central Asia, in order to demonstrate the
complex role that these play in determining the contours of a relationship based
on infrastructural financing and trade. The extent to which these globalized
corridors and systems of governance might be impacted by the pandemic,
however, remains to be seen.
Infrastructure, logistics, infrastructural financing, BRI, China, Central Asia
Modern infrastructure has been one of the means to both transform regions as well
as create dependence. Colonies were incorporated into imperial designs as much
through political and military intervention as through railways, roads and ports
that opened up landlocked interiors and expanded opportunities for exploitation
of natural resources. Recent initiatives to rebuild connections across Asia seem to
1 Indian Council for Social Science Research, New Delhi, India.
Corresponding author:
Anita Sengupta, Senior Fellow, Indian Council for Social Science Research, JNU Institutional Area,
Aruna Asaf Ali Marg, New Delhi 110067 India.
Sengupta 325
be driven by similar motives bringing into focus the role that infrastructural
investment will play in global politics through emerging financial institutions. It
has been estimated that over the next decade and a half, more infrastructural
projects will be initiated globally than that which exists presently (Hillman &
Yayboke, 2019, p. ix). Infrastructural projects particularly those in transport,
energy, communication and technology are crucial for modern economies and
impact the regions they connect and the global commons they underpin. This
epochal infrastructural transformation will create opportunities for an
unprecedented increase in the range of economic and strategic opportunities but
also intensification of competition over resources. It would also lead to the
creation of new spheres of influence with infrastructural ownership leading to
political and economic authority.
Particularly in Asia there is today increasing emphasis on building roads,
bridges, ports, airports, fibre optic cables and pipelines. Infrastructure and
connectivity is increasingly being associated with greater economic development
with countries with greater access and connection to global finance, trade and
movement of people showing a growth rate of nearly 40% more than others. The
stakes, however, extend beyond merely the economic and there are numerous
examples of infrastructural projects that reflect an underlying strategic
significance. Recent Chinese attempts at developing ports in the Indian Ocean
(Hambantota in Sri Lanka and Gwadar in Pakistan) and attempts to extend a road
in disputed territory in Bhutan are reflective of the fact that geopolitics plays an
equally significant role in infrastructural projects. Similarly, Australia is extending
fibre optic lines to Papua New Guinea and the Solomon Islands citing security
concerns. There is today a body of literature that examines finance as a means of
economic statecraft; however very rarely do these extend to an examination of the
influence of foreign aid and particularly infrastructural aid in policy formulation
(Drezner, 2009, pp. 7–45). Among those who have studied how states use foreign
infrastructural financing to advance strategic objectives, Jonathan E. Hillman
(2019) argues that this happens in all three stages of their working, that is,
financing, design and construction and finally ownership and operation (Hillman,
2019, p. 2). Finance, however, remains the most significant avenue for influence
and determines not only terms of repayment but also frequently how the
infrastructure is constructed and operated (Hillman, 2019, p. 23).
While infrastructural development and financing are two aspects of the new
realms of influence, the third is control over markets. China holds a distinct
advantage in this area. While Chinese goods and products are ubiquitous in most
parts of the world, the saturation of market spaces with Chinese products is
particularly visible in Central Asia, so much so that there are specific Kitaiskii
bazars (Chinese markets) across the Chinese border in Kazakhstan and
Kyrgyzstan. This entails a regular movement of goods and people and carries
with it the possibilities of engagement at various levels. In fact, mobility is as
much a part of this engagement as traditional transport geography and mobilities
in turn define logistic strategies as much as geo-political and political economic
transformations (Cresswell, 2010, p. 551). Mobilities, flows and spaces therefore
become significant in understanding the imperatives within which logistics

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