Countries in China’s immediate orbit of influence have welcomed a plan by the Group of Seven to challenge Beijing’s Belt and Road Initiative, but it will need to overcome reservations about Western commitment to emerging market projects.
The Build Back Better World project (B3W) was championed at last week’s G7 conference in the United Kingdom, but it is still lacking in details and is unlikely to become a reality for several years.
The effort, on the other hand, is being viewed as a challenge by the world’s wealthiest democracies to China’s expanding influence in emerging economies through infrastructure spending.
B3W’s multinational nature, on the other hand, would make it a more complex and potentially slower-moving effort than BRI.
“Southeast Asian countries that have hosted BRI projects did so because of the ease with which such accords were negotiated in the past,” Choi explained. “It’s not due to any ideological or geopolitical considerations.”
The G7 and its allies will use the B3W initiative to mobilize private-sector funding in sectors including climate change, health and security, digital technology, and gender equity and equality.
Despite the fact that China is one of Indonesia’s largest investors, the country has largely preferred Chinese funding supplied on a business-to-business basis over state-backed investment or BRI efforts.
The Jakarta-Bandung high-speed railway, which is encountering cost overruns, is the most high-profile BRI project in Southeast Asia’s largest economy.
According to a Refinitiv database, more than 100 nations have inked agreements with China to collaborate on more than 2,600 BRI projects totaling $3.7 trillion.
Last year, Beijing estimated that the epidemic had impacted around 20% of BRI projects. China has also toned back several plans after some countries requested that pledges be reviewed, canceled, or reduced, citing concerns about costs, sovereignty erosion, and corruption.
Despite worldwide fears about China’s expanding power, academics and politicians believe that Asia’s long-term development demands will take precedence over politics.
In 2017, the Asian Development Bank estimated that developing nations in the region will need to spend $1.7 trillion per year on infrastructure to maintain growth until 2030.
On condition of anonymity, a Bangladeshi foreign ministry official told Reuters that Dhaka was dedicated to its BRI agreements.
While most countries will be able to pick between Chinese and Western funding without big political consequences, specific industries may be more problematic, according to Roland Rajah, an economist at the Sydney-based Lowy Institute think tank.
“However, for sensitive infrastructure like telecommunications and strategically positioned ports, it will continue to be either/or, and they will be under pressure to make the ‘correct’ choice.”