Canada’s ongoing plans to develop national infrastructure projects along its natural resource corridor, shares many similarities to the Belt and Road Initiative.
The BRI, initially proposed in 2013 by China, aimed to “dock” its development strategies with countries along the proposed route in the Asia-Pacific, Eurasia, Middle East and Africa regions.
The initiative could reach 60 per cent of the global population, representing up to a third of the global trade volume. More than 150 countries and organisations have signed principal agreements, or more, with China to participate.
The strong response to the BRI route is, in part, due to the strong support the initiative has received from the United Nations. UN Deputy Secretary-General Amina Mohammed has suggested the BRI is a possible way for African leaders to boost their economies and is vital as part of a UN-sponsored plan to tackle global poverty by 2030.
In fact, in 2016, the support for the initiative from the UN was solidified to the point where a memorandum of understanding was signed between China and the UN Development Programme.
Although Canada is not currently a signing member of the BRI, two years ago Canada joined the Asian Infrastructure Investment Bank, which is a multilateral development bank supporting infrastructure development projects in the Asia-Pacific region. The similarities could suggest the BRI as a natural next step for Canadian investment.
Despite the possibility for global development and prosperity, the initiative is still being met with resistance from those doubting China’s intentions with the BRI. The current “geopolitical” ideology of some areas of the world creates a lens through which the only question being seen is, “Why is China leading this initiative?” Others believe the BRI pulls participating countries into a “debt trap.”
However, a report co-published by the East Asia Forum website entitled Sri Lanka’s Debt Problem Isn’t Made in China concluded the initiative is in no way related to Sri Lanka’s debt challenges, despite the Magampura Mahinda Rajapaksa Port in Hambantota, Sri Lanka, being often cited as the prototypical Chinese debt trap.
Instead, I believe China is helping to bring certainty to an uncertain world.
The initiative has strong potential for economic development for countries along the route. Over the past six years, over US$60 billion worth of direct investment was made by China into countries along the route, for which these countries achieved more than US$5 trillion of trade aggregation with China. This economic boost also resulted in the creation of over 200,000 jobs for local populations.
China has also ensured the BRI is available to all countries along the route to achieve economic success by creating standards which are minimal enough for any country to enter the agreement. These standards, along with the potential for success, have attracted countries not directly on the route to want to participate.
Although the United States is not a signing member, many American businesses have long been followers. For example, within the initiative, both Chinese and American oil companies have worked together to run the Apache in Egypt, which is now the biggest local oil and gas project.
In terms of the international market, the initiative has been positive for global economic growth. In a recent European analysis of 191 participating countries, the average cost and transportation time for global trade was reduced by 2.2 per cent and 2.5 per cent, respectively, due largely in part to the improvement of infrastructure and the streamlining of administrative processes, such as customs.
Although geographically separated from the main BRI route, it is difficult to dismiss the potential opportunities available to Canada if it were to get involved.
Canadian industry would gain access to essential third-party markets, which may serve as the necessary stimulus to develop multi-provincial, nationally prosperous economic strategies that will benefit all Canadians.