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Can China’s Belt and Road project deliver?

"What can the Philippines bring to the table during this forum? "

 

 

Next month, the 2nd Belt and Road Forum for International Cooperation will be held in Beijing. It is expected  to draw around 40 heads of state, led by Russian President Vladimir Putin. President Rodrigo Duterte has also confirmed his attendance. 

​This biennial event—the first took place in May 2017, also attended by Duterte—is considered significant as it would provide an opportunity to take stock of the Belt and Road Initiative (BRI) five years on and lay out a new roadmap for the future. More than this, it would allow participants to discuss challenges and hurdles in implementing the project and thereby serve to muster support from other countries. 

​While the first Belt and Road forum laid out the broad outlines of the project and emphasized the importance of connectivity and globalization, it lacked concrete details. Hence, the April meeting would focus more on what needs to be done in the coming years. 

​In other words, the BRI forum will depart from high-flown rhetoric and  get down to brass tacks and the nitty-gritty. 

​The focus on implementation and specifics is seen as crucial amid concern that BRI has so far promised so much but delivered very little, with promises of large amounts of investments not living up to actual delivery. The participants are therefore expected to dwell on individual economic projects and even set concrete targets, including quantitative ones, against which specific projects can be assessed.

 ​The forum is also expected to evaluate the Belt and Road after five years. At the start, it focused mainly on infrastructure. Since then, it now also incorporates industry, technology, cultural, legal and environmental components. Its geographical focus has also changed from the historic Silk Road region to the entire globe. And China has shifted the BRI goal from promoting economic development to building a community of “shared destiny for all mankind”.

​The forum will allow think tanks and governmental departments to present country—and sector-specific five-year evaluations and identify areas that have been successful or require improvement. It would be interesting to find out what the Philippine presentation would be in this regard. 

While the first BRI forum was attended mostly by think tanks and government officials, this time around the Asia-Pacific business community would have bigger representation.  The Chinese government has reported that over 80 state-owned enterprises have undertaken 3,116 investment projects in Belt and Road countries so far. But more and more foreign firms are also interested in how they can benefit from the BRI. Participants from foreign companies already benefiting from BRI would serve to convince other foreign companies that the project can yield positive results. 

​Amid the unresolved US-China trade war, Chinese companies are said to have become increasingly anxious over what lies ahead for them. China will likely use the Forum as another opportunity to reiterate the importance of continued globalization and the dangers of protectionism, and to encourage domestic firms to accelerate their search for new markets.

Another issue that’s expected to be tackled in next month’s forum is growing concern in the international community over the impact of Chinese investments in BRI. A common thread here is that BRI projects lack transparency, leading to fears that deal terms are unfavorable for the recipients of Chinese loans. The BRI is also perceived to have been monopolized by Chinese companies.

​Malaysia, for instance, has cancelled key BRI projects worth over $20 billion, with Pakistan, Sri Lanka and Nepal also postponing projects because of what they feel are excessive debt and unfavorable project terms. 

​Here at home, there’s been growing apprehension that Chinese investments and development assistance in the form of loans could drive us into a debt trap, that is, incur more and more loans just to pay high interest rates. Besides, critics say, the big number of Chinese workers here shows that loans and investments tied to employment of Chinese nationals here are one-sided and deprive Filipinos of job opportunities.  

What can the Philippines bring to the table during this forum? For one thing, this offers an excellent opportunity for the Philippine government to suggest reforms in the way BRI is now being carried out so that investments can be undertaken with more thorough risk assessments of their financial, environmental and social impacts.

The Forum also gives China the opportunity to announce new measures to improve the transparency of BRI projects, align them with international standards and open up BRI to third party involvement, particularly foreign governments, investors and companies. If frank and candid discussions on how to solve problems involving debt, transparency, specificity and third-country involvement can take place, this would help clear the air and make the BRI truly an instrument to building a community of “shared destiny for all mankind.” 

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Topics: Ernesto Hilario , China , Belt and Road project
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