By Bernadette Christina and Aradhana Aravindan
JAKARTA / SINGAPORE (Reuters) – A Group of Seven plan to counter the Beijing Belt and Road Initiative has been welcomed by countries in China’s immediate orbit of influence, but will have to overcome doubts about commitment. western with emerging markets projects.
The Build Back Better World Initiative, or (B3W), was promoted at last week’s G7 summit in the UK, but it remains sparse on the details and is not expected to become a reality for a few years.
The push, however, is seen as a challenge by the world’s richest democracies to China’s growing influence in developing economies, using investment in infrastructure.
While Asian governments say they are open to working with developed nations to meet their growing infrastructure needs, a challenge for B3W will be to match the speed at which China has been able to engage developing economies in the region.
Choi Shing Kwok, director of the ISEAS-Yusof Ishak Institute in Singapore, said Southeast Asian nations are wary of over-reliance on China, creating a potential opening for B3W when it finally arrives.
At the same time, the multilateral nature of B3W would make it a more complex and potentially slower initiative than BRI.
“Southeast Asian countries that have hosted BRI projects often did so because of the ease with which agreements of this type have been reached in the past,” said Choi. “It is not for ideological or geopolitical reasons.”
The B3W plan engages the G7 and its allies using the initiative to mobilize private sector capital in areas such as climate, health and safety, digital technology, and gender equity and equality.
Indonesian Deputy Foreign Minister Mahendra Siregar told Reuters that the country has several projects that would be open for co-investment and was ready to step up engagement with developed nations.
However, the country’s Ministry of Maritime Affairs and Investment Coordination, Indonesia’s main point of contact for BRI projects, said developed nations would have to shed their past reluctance to commit to local development.
“We welcome the (B3W) initiative, but of course we hope that this time they will put their money where their mouth is,” Jodi Mahardi, a ministry spokeswoman, told Reuters.
While China is among Indonesia’s largest investors, the country has mostly opted for Chinese finance delivered on a business-to-business basis, rather than investments backed by the state or through BRI initiatives.
The highest-profile BRI project in Southeast Asia’s largest economy is the Jakarta-Bandung high-speed railway, which faces cost overruns.
More than 100 countries have signed agreements with China to cooperate on more than 2,600 BRI projects worth $ 3.7 trillion, according to a Refinitiv database.
Beijing said last year that about 20% of BRI projects had been affected by the pandemic. China has also scaled back some plans after several countries sought to revise, cancel or cut commitments, citing concerns about costs, erosion of sovereignty and corruption.
But despite international concerns about China’s growing influence, analysts and politicians expect Asia’s long-term development needs to trump politics.
In 2017, the Asian Development Bank estimated that developing economies in the region would need to spend $ 1.7 trillion a year on infrastructure until 2030 to sustain growth.
Philippine Economic Planning Secretary Karl Chua said his country remains open to involving a variety of partners who have good infrastructure experience, including Japan, China, South Korea, Europe and the United States.
“The fact is that we have a huge gap in infrastructure that we have started to vigorously fill in the last five years and we will continue to do so,” Chua said.
A Bangladeshi Foreign Ministry official, speaking on condition of anonymity, told Reuters that Dhaka remained committed to its partnerships with BRI.
Roland Rajah, an economist at the Sydney-based think tank Lowy Institute, said that while countries in most cases could choose between Chinese or Western support without major political repercussions, certain sectors could be more problematic.
“However, for sensitive infrastructure like telecommunications and strategically located ports, it will remain an option and they will be under pressure to make the ‘right’ decision.”