JAKARTA / SINGAPORE, June 17 (Reuters) – A Group of Seven plan to counter Beijing’s Belt and Road initiative has been welcomed by countries under China’s immediate influence, but will have to overcome doubts about the West’s involvement in emerging market projects.
The Build Back Better World initiative, or (B3W), was promoted at last week’s G7 summit in the UK, but remains in little detail and is unlikely to become a reality for a few years.
The push, however, is seen as a challenge by the world’s wealthiest democracies to China’s growing influence in developing economies, using investments in infrastructure. Read more
As Asian governments say they are open to working with developed countries to meet their growing infrastructure needs, a challenge for B3W will be to match the speed at which China has been able to engage the developing economies of the United States. region.
Choi Shing Kwok, director of the ISEAS-Yusof Ishak Institute in Singapore, said countries in Southeast Asia fear overdependence on China, creating a potential opening for B3W when it arrives. finally.
At the same time, the multilateral nature of B3W would make it a more complex and potentially slower initiative than BRI.
“Southeast Asian countries that have hosted BRI projects, they have often done so because of the ease with which such agreements have been made in the past,” Choi said. “It’s not for ideological or geopolitical reasons.”
The B3W plan involves the G7 and its allies using the initiative to mobilize private sector capital in areas such as climate, health and safety, digital technology, and gender equity and equality. Read more
Indonesian Deputy Foreign Minister Mahendra Siregar told Reuters the country has several projects open to co-investment and is ready to step up engagement with developed countries.
However, the country’s Maritime Affairs and Investment Coordination Ministry, Indonesia’s main point of contact for BRI projects, said developed countries should get rid of their past reluctance to engage in the local development.
“We welcome the initiative (B3W), but of course we hope that this time they will put their money where they say”, Jodi Mahardi, spokesman for the ministry, told Reuters.
While China is among Indonesia’s largest investors, the country has mainly opted for Chinese financing provided on a business-to-business basis, rather than investments supported by the state or through BRI initiatives.
The most prominent BRI project in Southeast Asia’s largest economy is the Jakarta-Bandung high-speed railway which faces cost overruns.
More than 100 countries have signed agreements with China to cooperate in more than 2,600 BRI projects worth $ 3.7 trillion, according to a Refinitiv database.
INVESTMENT NOT POLITICAL
Beijing said last year that about 20% of BRI projects had been affected by the pandemic. China has also cut back some plans after several countries sought to review, cancel or reduce their commitments, citing concerns about costs, erosion of sovereignty and corruption.
But despite international concerns about China’s growing influence, analysts and policymakers expect Asia’s long-term development needs to trump politics.
The Asian Development Bank estimated in 2017 that developing economies in the region should spend $ 1.7 trillion annually on infrastructure until 2030 to support growth.
Philippine Economic Planning Secretary Karl Chua said his country remains open to engaging a range of partners with good infrastructure experience, including Japan, China, South Korea, Europe and the United States.
“The point is, we have a great infrastructure gap that we have started to address vigorously over the past five years and we will continue to do so,” Chua said.
A Bangladeshi foreign ministry official, speaking on condition of anonymity, told Reuters that Dhaka remains committed to its BRI partnerships.
Roland Rajah, an economist at the Sydney-based think tank Lowy Institute, said that while countries could in most cases choose between Chinese or Western support without major political repercussions, some sectors could be more problematic.
“For sensitive infrastructure such as telecommunications and strategically located ports, however, it will continue to be one or the other and they will be under pressure to make the ‘right’ choice.”
Additional reporting by Ruma Paul in Dhaka, Gayatri Suroyo in Jakarta and Karen Lema in Manila; Writing by Sam Holmes; Editing by Kim Coghill
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