132 countries that are partners to China’s Belt & Road Initiative (BRI) account for 35% of global GDP, 43% of the global trade in goods, and 60% of the world’s population, according to a book on the Belt & Road Initiative in Central Asia and the Caucasus, the press office of the Eurasian Development Bank (EDB) reported.

The book, entitled China’s Belt & Road Initiative: Potential Transformation of Central Asia and the South Caucasus, emphasises the need to maintain fiscal and debt sustainability, assess social impact, minimise environmental risks, and improve transparency.

Evgeny Vinokurov, Chief Economist at the Eurasian Fund for Stabilisation and Development, co-authored the book. The publication was co-edited by Harinder Kohli, Johannes Linn, and Leo Zucker.

The book provides a qualitative assessment of infrastructure investment made as part of the BRI, as well as of volumes and disbursements.

Loans to low-income and lower-middle-income countries are often concessional. E.g. in Kyrgyzstan and Tajikistan, a typical repayment period of around 20 years, an effective interest rate of 2% per annum, and a grace period of 5-12 years.

The book also provides a qualitative analysis of major BRI projects’ effects on involved countries in terms of economic development, as well as debt and fiscal sustainability.

As for the BRI impact on regional economies, it was noted at the book’s presentation that “the glass is 75% full, but there’s more to fill.” The key drivers are the reduction of transport costs and the intensification of mutual trade.

Despite the prevailing share of debt instruments, there’s a simultaneous increase in trans-boundary direct and portfolio investment in industry, energy and electric power, agriculture, and tourism.

However, the authors are concerned with the countries’ debt and fiscal sustainability. Many of these countries are low and lower-middle-income economies with unstable economic growth.

For this reason, the authors support China’s plans announced at the Second Belt & Road Forum in Beijing in April 2019 to analyse debt sustainability of each country in cooperation with international financial institutions.

Project experts call for greater transparency of financial flows within the BRI. In addition, the international team of authors emphasise the need to assess more thoroughly the potential demand for infrastructure, as well as social impact and environmental risks.

In this connection, they praise China’s intent to multilateralism the BRI by establishing a technical centre with the involvement of major international financial institutions.

The Eurasian Development Bank (EDB) is an international financial institution founded by Russia and Kazakhstan in 2006 with the mission to facilitate the development of market economies, sustainable economic growth, and the expansion of mutual trade and other economic ties in its member states. The EDB’s charter capital totals the US $7 billion.

The member states of the Bank are Armenia, Belarus, Kazakhstan, Kyrgyzstan, the Russian Federation, and Tajikistan.

The Eurasian Fund for Stabilisation & Development amounting to US$8.513 billion was formed in 2009 by the governments of the same six countries

The EFSD assists its member states in overcoming the consequences of the global financial crisis, ensuring their economic and financial stability, and fostering integration in the region.

The EFSD member countries signed the Fund Management Agreement with Eurasian Development Bank giving it the role of the EFSD Resources Manager.

Editor’s Note: The article reflects the author’s opinion only, and not necessarily the views of editorial opinion of Belt & Road News.