China’s Belt and Road tempts states, but comes with risks

Kuwait Times - - News -

NUSA DUA, In­done­sia: China’s mas­sive “Belt and Road Ini­tia­tive” build­ing push may cre­ate debt risks but is also re­spond­ing to ma­jor in­fra­struc­ture gaps in Asia and could boost global trade, World Bank of­fi­cials say. The rel­a­tively up­beat assess­ment of a some­times con­tro­ver­sial pro­gram comes de­spite the debt cri­sis now faced by Pak­istan, a re­cip­i­ent of mas­sive Chi­nese loans. China launched the am­bi­tious plan in 2013 un­der Pres­i­dent Xi Jin­ping, seek­ing to link Asia, Europe and Africa with a net­work of ports, high­ways and rail­ways.

It has dis­persed tens of bil­lions of dol­lars in loans, of­ten to highly in­debted coun­tries, spark­ing crit­i­cism of Bei­jing for ev­ery­thing from “debt en­trap­ment” to ex­clud­ing lo­cal la­bor from projects funded by the plan. But, meet­ing in Bali this week, of­fi­cials from the World Bank and In­ter­na­tional Mone­tary Fund said the BRI filled im­por­tant gaps, while ac­knowl­edg­ing con­cerns. “There are huge op­por­tu­ni­ties: im­proved in­fra­struc­ture means more trade, more in­vest­ments, higher growth, bring­ing in land­locked re­gions,” said Caro­line Freund, the Bank’s di­rec­tor of trade, re­gional in­te­gra­tion and in­vest­ment cli­mate.

“But there are chal­lenges as well... There are en­vi­ron­men­tal and so­cial risks, there are is­sues to do with pub­lic pro­cure­ment, and sus­tain­ing pub­lic debt be­comes an is­sue be­cause these projects are ex­pen­sive,” she added. The World Bank es­ti­mates that BRI­funded in­fra­struc­ture could boost trade among coun­tries in­volved by 3.6 per­cent, and global trade some 2.4 per­cent. And of­fi­cials say it is of­fer­ing fund­ing in ar­eas where it is sorely needed.

Debt fears

“Sev­eral coun­tries, es­pe­cially in Cen­tral Asia and Cau­ca­sus have ben­e­fit­ted... in or­der to im­prove their in­fra­struc­ture as well as also to pro­mote ad­di­tional

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