GCR: The US is planning to begin its counter to China’s Belt and Road Initiative (BRI) with between five and 10 infrastructure projects that will be announced in January, a senior US official has told reporters.
The effort is seeking to “identify flagship projects that could launch by the start of next year”, the official said.
The schemes would be the first to be proposed under the Build Back Better World (B3W) initiative, formulated during the G-7 meeting held in Cornwall in June.
Since then, officials have been carrying out “listening tours” of countries that may be recipients of US-facilitated infrastructure. Most recently, Daleep Singh, the deputy national security adviser for international economics, led a delegation to Ghana and Senegal in West Africa, the first such tour of African countries.
This identified 10 candidate projects that the US could help bring to life.
The White House released a statement on Monday saying Singh had met with representatives from the private sector as well as environmental, labour and civil society leaders to solicit their views as to “how we can best support local communities in a way that responds to infrastructure needs and advances the highest standards for transparency and anticorruption, financial sustainability, labour protections, and environmental preservation”.
The references to transparency and other protections underline the US’ often-repeated criticisms of the BRI’s performance in these areas.
The administration official said Singh’s audiences in Senegal and Ghana welcomed US assurances that, unlike China, the US would not require non-disclosure clauses or collateral agreements that could result in the seizure of ports or airports.
Projects discussed included setting up a vaccine manufacturing hub in Senegal, bolstering renewable energy supplies, boosting lending to women-owned businesses and narrowing the digital divide.
Another delegation visited Ecuador, Panama and Colombia in October, and another is planned for Asia before the end of the year.
The aim is to finalise the B3W’s inaugural projects during a G-7 meeting in December.
It is not clear whether the US and its allies will follow the Chinese model of funding schemes through direct loans by state-owned banks. The official said the US would offer developing countries “the full range” of financial tools, including equity stakes, loan guarantees, political insurance, grants and technical expertise to bring forward schemes that focus on “climate, health, digital technology and gender equality”.
During his recent visit to Glasgow, President Joe Biden said B3W would help create “a sustainable path to net-zero emissions by 2050”.
He said: “The Build Back Better Initiative, the Clean Green Initiative of Great Britain and the Global Gateway are all part of a joint effort among the G-7 partners to deliver high-quality, sustainable infrastructure.”
During their summit in Cornwall over the weekend, the G7 group of rich, industrialised countries agreed on an infrastructure investment push for the developing world that appears to be aimed at countering China’s Belt and Road Initiative.
Short of promising any extra state funding for infrastructure schemes, however, the “Build Back Better World” (B3W) plan appeared to rest on attracting private finance through an as-yet undefined mechanism.
The White House said B3W would cover Latin America and the Caribbean, Africa and the Indo-Pacific.Â
For the US, lending will be undertaken by the existing development bodies such USAID and the Development Finance Corporation.
More vaguely, the White House describes augmenting the US’ “development finance toolkit” to attract investment from the private sector and G7 partners to “catalyse hundreds of billions of dollars of infrastructure investment for low and middle-income countries in the coming years”.
Although the aim of competing with the BRI is not stated explicitly, official documents lay a heavy emphasis on transparency, “values” and good governance. Last week, the US launched its Blue Dot Network, which will act as a kind of certification body to evaluate whether particular projects meet certain defined standards.
In the past, the US has complained that BRI projects lack these qualities, and these complaints have often been echoed by opposition groups in recipient countries.
In a news briefing, a senior administration official commented: “Until now, we haven’t offered a positive alternative that reflects our values, our standards, and our way of doing business … [B3W] won’t just be an alternative to the BRI, but we believe will beat the BRI by offering a higher-quality choice.”Â
BRI agreements are typically carried out as bilateral deals with China’s political-industrial complex, and require the use of Chinese companies and supply chains, although with particular countries typically negotiate local content requirements. In the case of Malaysia’s East Coast Rail Link, for example, at least 40% of civil engineering work, excluding tunnelling, will be undertaken by local suppliers.Â
The communiqué notes that a “particular priority” will be schemes that promote “clean and green” growth in line with the Paris Agreement and Agenda 2030. B3W schemes will also focus on projects with an impact on healthcare, digital technology and gender equity.
A UK spokesperson at the summit said the aim was not just to compete with China. He commented: “This project stands on its own merits and is in line with the G7’s priorities on ensuring the world builds back better and greener from the pandemic.”
It is unclear whether the initiative will be able to match the scale of the BRI. According to a 2018 report from ICBC Standard Bank, after the first five years of the programme, some $330bn of transport and $266bn of energy projects were announced, under way or complete. They accounted for around two-thirds of total BRI investment. The remainder went on industry, real estate, technology, finance and tourism.
More than 140 countries are members of the BRI, and more than 100 countries and regions are members of the separate China-led Asian Infrastructure Investment Bank.