Chquebook Diplomacy

 Chquebook diplomacy is used to describe a foreign policy which openly uses economic aid and investment between countries to curry diplomatic favor. More recently analysts often reference the practice with respect to the foreign policy of China, especially through China’s foreign aid, Infrastructure investment, energy engagement and interconnections. Some commentators fear that China is exploiting developing countries in a Neo-colonialist manner. Unlike the International Monetary Fund and World Bank lending, Chinese loans are collateralized by strategically important natural assets with high long term value viability. China gives Jamaica £2.6 bn loans against their total GDP valued £16.4 bn. As it is, China also provides a huge amount of loans towards the other underdeveloped countries like Papua New Guinea and Bermuda respectively £5.3 bn and £1 bn. China has provided Pakistan with US Dollar 60 bn from 2005 which is one fifth of the GDP of Pakistan. Instead of the loans Pakistan bought 70% of their arms from China and it is claimed that Pakistan helped Afghanistan providing those arms. Moreover Barbados is the state which has recently come out Commonwealth for China’s chequebook diplomacy. Some countries are however realizing the downside of Chinese money. In 2007, Malaysia, cancelled a dollar 20 billion railway link and two pipeline projects that were being funded by the Chinese.

 

Bangabandhu Setellite-2