BRI needs results-based project management, consulting
As of October 2023, China had signed more than 230 cooperation documents with more than 150 countries and 30 international organizations under the Belt and Road Initiative, since its inception in 2013.
In the past decade, more than 3,000 projects have been initiated and implemented, and 420,000 jobs have been created under the auspices of the BRI, according to media reports.
These projects have, on average, been completed within three years of the dates of commitment. However, whether these projects have squared the high-quality efficiency circle has not been sufficiently investigated.
A few Western scholars have found de jure environmental, social, and governance safeguards in place for Chinese infrastructure projects. Whether these safeguards have been implemented, de facto, remains a question mark.
Admittedly, China is still on an upward learning curve in delivering sustainable development projects, and there is a need to establish institutions and strengthen capacity.
The newly established China International Development Cooperation Agency has been formalizing and systematizing foreign aid project management standards. Such de jure improvements include passing a series of regulations regarding the consulting services for foreign aid projects.
More experimental evaluations have been carried out in recent years, but they lack systemic or mandatory requirements.
Quality control is key
As a responsible development partner and financier, China should fully utilize its resources and build capacity in high-quality foreign aid project management rather than leaving this space to the Western media and scholars.
This is urgent since, while making the “high-quality BRI”, quality control should not be the missing link in the entire framework of international development and finance.
In the next stage, more projects will need to march toward “going green, going smart, and going digital” to empower the high-quality development of the BRI.
There will also likely be more Build-Operate-Transfer projects in the coming years as the Chinese partners are transforming their roles from contractors to investors. Multiple stakeholders, both at home and abroad, will demand result-based project management for better governance, greater transparency, effectiveness and accountability.
However, China has a long way to go before it implements resultsbased project management covering the entire supply chain, in accordance with the standards set by international development agencies. More systemic and institutional efforts from the Chinese development cooperation agencies and development finance institutions are needed.
In the first place, project monitoring and evaluation must be undertaken by third-party and independent entities. Otherwise, objectivity and credibility could be affected. This is paramount, especially for project and impact evaluation, which should be done five years after project completion.
The process of feasibility study, project planning, evaluation and economic consultation should be interconnected and technology-intensive.
In other words, early findings from feasibility studies and environmental assessments must be linked to project formulation, planning, budgeting, result framework setting, implementation, and monitoring and evaluation. They also require sectoral and technical expertise.
Moreover, ex-post, mid-term and impact evaluations need to be made mandatory under certain circumstances, such as for mega projects in infrastructure. New methodologies like big data, remote sensing and geo-econometrics can be applied in impact evaluation.
The private sector, nongovernmental organizations and academics should be encouraged to undertake tech-intensive evaluation service tasks compared to the current practice of favoring affiliated agencies or subsidiaries.
In addition, these technical assistance or consulting services aimed at evaluating overseas projects could be organized as joint ventures, and they could serve as an instrument for accountability and an opportunity for two-way learning and knowledge-sharing between development partners (that is, China and the host countries).
Such technical assistance service providers shall actively engage and work with local stakeholders and relevant institutions in the host countries.
Chinese public sector consulting agencies must meet international standards in development cooperation project management through learning by doing. Project evaluation is barely new in the Chinese development context. However, the capacity has not been well utilized in China’s overseas investment and financing efforts due partly to inadequate accountability, regulatory enforcement and institutional restrictions.
A culture of project monitoring, evaluation and impact evaluation had not been established among banks and construction companies engaged in overseas investment until recently. The fundamental reason is that there is no foreign aid and cooperation law in China. The definitions, size, criteria, regulations, transparency, safeguards, accountability, and governance of China’s foreign aid and cooperation have not been established under the jurisdiction of the National People’s Congress (the top legislature), and the decision-making has been done in an ad hoc manner.
CIDCA, for example, is not yet equipped with sufficient authority, budget and human capacity to regulate all actors of overseas lending, investment, contractors and their behaviors.
Build capacity in consulting
Though China’s domestic consulting services sector has grown since the start of economic reform more than 40 years ago, it lacks international vision.
Domestic public consulting agencies, private firms and academic institutions have accumulated hands-on experience in regional planning and project management. Many local firms have managed to cultivate, attract and retain young talent graduating from well-known academic institutions worldwide. These young consultants have a good command of essential analytical tools and organizational skills to provide constructive policy recommendations. However, only a few such firms have a vision for international competition.
Overall, China’s technical assistance or the consulting sector, remains underdeveloped compared to global consulting sectors due to a lack of vision, lack of transparency and limited access to the international market. Very few entities have conducted overseas project evaluations. Only a handful of Chinese consulting firms are on CIDCA’s “vendor” list to provide such services for foreign aid projects, whereas the World Bank has hundreds, if not thousands, of qualified vendors in its vendor list.
Therefore, more diversified entities and experts from the private sector, academia and NGOs should be encouraged to provide tech-intensive consulting services to BRI projects at different stages.
CIDCA should actively work with specialized agencies in international organizations, such as the World Bank, the United Nations, and the Asian Infrastructure Investment Bank, to organize essential technical training and eligibility evaluation of “vendors” based on performance.
Climate crises, new technology development and the “reconfiguration” of global supply chains have put developing countries at a disadvantage. Economists have, therefore, called for new strategies for opening-up and cross-border learning.
Building a tech-intensive consulting services sector can play a critical role in the “dual circulation” of domestic and international cycles by breaking information cocoons and building a bridge for knowledge spillovers. This is also consistent with the need for the services sector’s exports as an engine of growth.
Considering the two sessions — the annual meetings of the National People’s Congress and the National Committee of the Chinese People’s Political Consultative Conference — to be held this month and the Forum on China-Africa Cooperation summit later this year, it is high time that the issue of promoting results-based BRI project management is brought to the agenda.
This will help in completing project supply chains with quality control, with the recommendation that these international or joint venture consultancies be established as a measure of creating a new engine of high-quality growth for BRI that will generate jobs for educated youth in both China and Africa, and serve the global development agenda for a green and sustainable future.
Justin Yifu Lin is dean of the Institute of New Structural Economics and honorary dean of the School of National Development, Peking University; Wang Yan is senior academic researcher at the Boston University Global Development Policy Center; and Xu Yinyin is a graduate student at Graduate Program in Regional Science, Cornell University. The views do not necessarily reflect those of China Daily.