The G7’s Build Back Better World Plan, US Blue Dot Network and EU’s Connectivity Strategy can learn from China in offering more flexibility to the global south.

Meanwhile, the Belt & Road Initiative can learn to be more transparent.

More than a year into the pandemic, chaos remains in the once very efficient and “lean” global supply chains. The pandemic has interrupted the normal flow of goods, creating bottlenecks at different stages of the global production network.

The ripple effects of this initial shock have been amplified by the uneven re-openings and lockdowns across the world, the Suez Canal incident, and problems at ports in southern China due to a new Covid-19 surge.

Many commentators see these issues as showcasing the need for more diversified supply chains and bringing production closer to consumer markets. Although this diversification is slowly happening, the reality is that without more investments in infrastructure around the world, diversification will be impossible.

Addressing this infrastructure deficit estimated to grow to US$15 trillion by 2040 by the World Economic Forum in a post-Covid-19 world will require a massive effort.

China’s Belt and Road Initiative was well received in the global south in the beginning, as traditional donors in the West had moved away from physical infrastructure support due to the riskiness of projects. The initiative quickly received praise from host governments for both its neutrality in domestic affairs and speed in fulfilling projects.

It was also criticized for the lack of transparency and local involvement in the projects. In the West, the initiative is largely perceived as a geopolitical strategy to control trade lanes.

A backlash was to be expected, and European and American infrastructure and connectivity strategies have been forming in response. The European Union’s connectivity strategy and bilateral connectivity partnerships with Japan and India, and the American Blue Dot Network represent challenges and alternatives to the Belt and Road Initiative.

The Blue Dot Network attempts to shape the standards of global infrastructure while Europe’s connectivity strategy promises infrastructure projects that are more transparent, more sustainable, and in real partnership with host countries.

The Group of 7 summits on June 11-13 unveiled the latest acceleration of the competition for global infrastructure building, when the Build Back Better World partnership “a values-driven, high-standard, and transparent infrastructure partnership led by major democracies” was presented, clearly setting a competing agenda to the Belt and Road Initiative.

These new initiatives remain mostly rhetorical with little concrete action. The new G7 partnership, for now, has only created a task force to develop proposals, while in the EU-Japan connectivity partnership of 2019, developments have been slow.

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All these initiatives rely heavily on the idea that private investment will be catalysed for the projects, a strategy that the large development institutions have supported for the past two decades but which has delivered little in the form of tangible results.

At the same time as the West ramps up rhetorically and starts proposing global infrastructure projects, China’s policy banks have reduced lending to developing countries for risky projects, and the myth of China’s debt trap has been debunked.

The Belt and Road Initiative is a highly dynamic policy. It is important for the US, EU and indeed, G7 partners to monitor it for possible synergies with their alternatives and not to see China purely as a rival.

Their rhetoric against China is driven not by China’s failures, but the perception that the Belt and Road Initiative is successfully advancing Beijing’s interests and contributing to infrastructure improvements in the global south.

It is still unclear whether the Belt and Road Initiative will have a positive effect on the economies of the global south. But it does have a major advantage in not having the baggage that the EU and the US have in their engagement with the global south

China is generally perceived as a partner in development cooperation and not a donor. For these new projects to be a real alternative, the G7, and other nations must avoid rehashing colonial dynamics by promoting their values and methods.

The American, European, and G7 infrastructure initiatives must be more flexible like the Belt and Road Initiative, while the Belt and Road Initiative should be more transparent. Although some competition in global infrastructure is welcome to increase investments, leading nations also need to collaborate and learn from one another to surmount the massive infrastructure gap in the global south.

Author: Federico Jensen is a double-PhD fellow at Copenhagen Business School, Department of Organisation, and at the Sino-Danish Centre for education and research, University of Chinese Academy of Sciences. His research studies the pervasive role of the state on shipping and transport networks and its impact on global trade.
Editor’s Note: The article reflects the author’s opinion only, and not necessarily the views of editorial opinion of Belt & Road News.