20 October 2019
Washington DC, 20 October – Potential pitfalls from Belt and Road Initiative (BRI) investments can be addressed through proactive policy and institutional reforms, according to a new book entitled China’s Belt and Road Initiative: Potential Transformation of Central Asia and the South Caucasus.
The book was launched today at the 14th Global Meeting of the Emerging Markets Forum.
Commissioned by the Emerging Markets Forum with support from the Swiss National Bank, the book focusses on the BRI’s economic and social impact rather than the usual geopolitical aspects. A combined effort of 22 researchers from 11 countries, it drills into the opportunities, risks, and policy options that BRI countries in the Central Asia and South Caucasus region have by leveraging the unique insights of regional experts.
While the initiative is viewed by many in the region as a potential economic ‘game changer’, BRI investments can prove to be fiscally unsustainable for some recipient countries. “This risk is further heightened by inadequate economic and financial viability assessment as well as social and environmental impacts”, said Johannes Linn an author and co- editor of the book.
Reforms have to be undertaken at national and regional levels. “At the national level, for example, the proposed BRI projects must be integrated into national plans and priorities and not be merely grafted as opportunistic investments,” said Harinder Kohli also a co-editor and author, who is also Chief Executive of the Emerging Markets Forum. He added that greater transparency in procurement and implementation is also a key factor. At the regional level, the book highlights the need to deepen cooperation with neighbors and mitigate negative spillover effects, particularly on environment and climate change. The book emphasizes China’s key role in strengthening local stakeholder engagement, supporting soft infrastructure development, assessing the macroeconomic, sectoral and regional implications of the investments it supports, and further positioning BRI on a global scale.
“While the BRI has the potential to transform the region, recipient countries must also work with the global development community and China to realize the initiative’s promise and avoid its potential pitfalls,” said Mr. Kohli. He added that it is critical that China implements early on the major reforms announced at the Second Belt and Road Forum in April 2019.
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