By Duncan Gordon

Moving Mountains On the Belt and Road

By Duncan Gordon

The Belt and Road Initiative will enhance infrastructure and trade connectivity. In order for it to benefit everyone, several key principles must be followed

President Xi Jinping opened the Belt and Road Forum in Beijing in May by reminding the assembled world leaders, experts and journalists, representing over 110 dif f erent countries, of the history of economic relations between China and the world. He recalled the epic journeys “over steppes and across deserts made by our ancestors” on the ancient Silk Road. Xi said that those historic trade routes embodied the values of openness, inclusiveness, mutual learning and mutual understanding, which the Belt and Road Initiative hopes to revive in today’s complex world, fraught with difficulties but also laden with opportunities for greater cooperation and development.

Infrastructure connectivity is a key piece of the Belt and Road jigsaw. Without it, there could be no trade and investment and consequently, no development. ASEAN countries hope to benef i t from several major infrastructure projects, including the China-Laos railway, the China-Myanmar oil and gas pipelines and the BCIM (Bangladesh, China, India and Myanmar) Economic Corridor.

Meanwhile, the Initiative aims to enhance trade between China and countries along the route. The 68 cooperation deals that China signed with other countries and multilateral bodies during the two-day forum in Beijing highlight the impact that the Initiative will have. Malaysia signed nine agreements with China, including commercial deals worth over US$7 billion. Meanwhile, President Xi and Indonesian President Joko Widodo watched on as their countries signed an agreement to export more crude palm oil to China. The forum has given extra impetus to trade connectivity between China and its partners.

This incredibly ambitious initiative aims to build infrastructure projects and boost trade in Asia, Europe, Africa and beyond on a scale never seen before, while upholding those values Xi mentioned in his keynote speech. That is no easy task. How can the Belt and Road Initiative truly foster “a new type of international relations based on win-win cooperation”?

Dr. Aileen San Pablo Baviera of the University of the Philippines highlights the crucial importance of Belt and Road players’ capacity to understand the local contexts in which they work and argues that think tanks have an important role to play in disseminating knowledge.

“Think tanks should bring together all the parties involved in a potential project, from the local villagers to the national government, to identify challenges and priorities,” Baviera said. “Sometimes, players are unfamiliar with the cultural or business environment of a country. Think tanks can help to fi ll this knowledge gap.”

The cooling water discharge outlet of the coal-f i red power plant in Bali, Indonesia, which was constructed by China Huadian Corporation.

This coalfi red power plant in Bali, Indonesia, constructed by China Huadian Corporation, began operating in August 2015. The plant uses efficient and clean coal- fi red technology.

Indeed, Peter Drysdale, Emeritus Professor of Economics in the College of Asia and the Pacif i c at The Australian National University, agrees that real development occurs when all the parties understand each other. He points out that the Belt and Road Initiative promises to “give a high priority to issues that might cause disturbances”. However, he also added that “to deliver on those promises it will require a massive investment in international learning and communication both within China and between China and its partners. That’s the challenge of the Belt and Road Initiative.”

Drysdale believes that language learning must form the backbone of that education, which can in turn enable deeper cultural understanding.

When it comes to implementing infrastructure projects that are to form the nerves and sinew of the Initiative there has to be a consensus between partners on which projects are priorities and which projects may need to be reconsidered. In other words, Belt and Road infrastructure projects must complement the infrastructure needs and development aims of host countries. Indonesia, for example, like many developing Asian countries, has a yawning infrastructure gap. The Belt and Road Initiative can benef i t Indonesia by fulf i lling those needs where and when required. Similarly with trade, the Belt and Road Initiative will be most ef f ective when it enables trade that maximizes benef i ts to businesses and consumers in partner countries. In ASEAN countries for example, high-tech Chinese products, such as Lenovo laptops and Huawei smartphones, have seen sales continue to grow. Meanwhile, Ant Financial, the fi nancial technology company affiliated with Chinese e-commerce giant Alibaba, set up a joint venture to develop fi nancial services in Indonesia earlier this year. Increasing trade connectivity for these high-value added goods not only benef i ts ASEAN consumers, but also supports China’s aim to become a high-tech manufacturing power. This complementarity of policy is crucial to the success of the Belt and Road.

A third factor important to the success of infrastructure endeavors along the Belt and Road is the need to carry out full project evaluation and follow the tenets of international law. Executive Director of the United Nations Human Settlements Programme (UN-Habitat) Joan Clos made it clear that infrastructure projects have the potential to dramatically improve lives in underdeveloped regions but they must respect the rights of individuals, abide by UN values and avoid activities such as illegal evictions.

“Development is only development if it respects the people,” Clos said. Someone who has fi rst-hand experience of the importance of following procedures and respecting people directly af f ected by megaprojects is Steve Howard, Secretary General of the Global Foundation (Australia) and international advisor to the president of the Asian Infrastructure Investment Bank (AIIB), one of the main lenders for Belt and Road projects.

“I was involved in the successful building of the biggest hydropower project in Laos 20 years ago, which operates today as the biggest energy exporter to Thailand,” Howard said. “It took 10 years for the project to be completed. Why? Because it had to meet all the very difficult standards of best practice in environment, resettlement, health and more. It was a great success.”

Howard also believes that thorough investigation and planning of projects is vital.

“The prior preparation before you turn soil is everything. Before you start actually building a project you need to ensure there is a community that wants it, a government that wants it and ensure that it is going to be successful in every other way as well,” he explained.

These three principles —understanding local contexts, complementing national objectives, and adhering to international laws while undertaking full project evaluation — are crucial to the success of Belt and Road Initiative infrastructure projects and trade deals. If this ground-breaking plan is genuinely to open a new chapter in international development the challenges outlined above will need to be met head on. As Xi put it, “Geographical distance is not insurmountable if we take the fi rst courageous step towards each other.”