US President Joe Biden has repeatedly reiterated the need for the US and its allies to work together to check China’s increasing clout, by providing alternatives to China’s ambitious Belt and Road Initiative (BRI) project as well as Chinese technologies. During his state of the Union Address in April 2021, the US President had said:
China and other countries are closing in fast. We have to develop and dominate the products and technologies of the future.
It would be pertinent to point out, that 138 nations in five continents have signed various BRI cooperation agreements with China as of the end of 2020 (EU member states including Greece and Italy are also on board the BRI). China has so far invested a whopping 690 billion USD in BRI related projects in a 100 countries.
G7 and the B3W
On June 12, 2021 the G7 unveiled the Building Back a Better World -BBBW/B3W (a brain child of the Biden Administration) partnership. The G7 leaders said that the B3W would be ‘values-driven, high-standard and transparent”. During a conversation with Boris Johnson in March, the US President had discussed the need for an alternative to the BRI. A number of BRI related projects in developing countries in Asia and Africa have drawn criticism for lacking in transparency, and not being economically sustainable leading to debts which make countries dependent upon them or leads to a ‘Debt Trap’. Debt trap has been defined as a phenomena, where by poor countries economically dependent upon China, unable to deal with rising debts to China, are left with no option but handing over ownership of important infrastructure to China. A prominent example of this is Sri Lanka, where when the South Asian nation’s debt burden vis-à-vis China became untenable, it was compelled to sign a 99 year lease with China through which Beijing got 70% stake in the strategic Hambantota Port project. It is not just Hambantota, but many projects falling under the China Pakistan Economic Corridor (CPEC) too have been under the cloud for lacking transparency and not being feasible. In certain cases, such as the Kyaukpyu port in Myanmar, Beijing has had to renegotiate the cost of projects (it was brought down from 7.3 Billion USD to 1.3 Billion USD) as a result of fervent opposition and protests.
There are scholars who have argued, that the Debt trap is a fallacy, and developing countries actually are far more comfortable dealing with China which according tot hem does not impose political conditionalities.
The USIDFC and Blue Dot network
The Trump Administration received bi-partisan support for the build (Better Utilisation of Investment leading to development ) act which created a new agency United States International Development and Financial Corporation (USIDFC) with a corpus of 60 Billion USD to facilitate private sector involvement in Indo-Pacific, especially African countries. In 2018, the US Secretary of State Mike Pompeo had also made a commitment of 113 Million USD to projects in the Indo Pacific focused on technology, infrastructure and energy. In November 2019, US, Japan and Australia had also launched the Blue Dot Network on the sidelines of the ASEAN Summit.
Then US National Security Advisor, Robert O Brien had compared the Blue Dot Network to Michelin Guide which meant that just like a Michelin star is the sign of approval for a restaurant, a blue dot would be a seal of approval for infrastructural projects. Days before the G7 meeting in UK, the inaugural meeting of the consultation group of the Blue Dot network was held in Paris, apart from representatives from western governments and Japan,other stakeholders such as members of civil society, academics and 150 global executives participated in this meeting. . The US State Department while commenting on the Blue Dot Network had said:
The Blue Dot Network will be a globally recognized symbol of market-driven, transparent and sustainable infrastructure projects.
Under the umbrella of Quad countries (US, Japan, Australia and India) too there has been discussion on enhancing economic cooperation as well as connectivity.
Opportunities for the B3W
There is an opportunity for the B3W, since In the aftermath of covid, certain BRI projects have slowed down. Second, the geographical scope of BBBW is much wider than that of the projects under the Indo Pacific (B3W will also include Latin America and Caribbean)
BBBW can also hardsell its strengths such as transparency and sustainability – both economic and environmental. It also can dovetail, with some of Biden’s ambitious economic schemes related to the economy and unfrastructure.
The fact, that Biden is willing to take the lead unlike Trump is reassuring for allies and sends out a positive message to developing countries looking for alternatives to the BRI. While addressing a press conference after G7, the US President made this point saying:
“The lack of participation in the past and in full engagement was noticed significantly not only by the leaders of those countries, but by the people in the G-7 countries, and America’s back in the business of leading the world alongside nations who share our most deeply held values’
US had also categorically clarified, that the B3W seeks to provide an alternative to BRI, but it is not merely about targeting China.
Possible limitations of B3W
Yet, there are limitations. First, the B3W still does not have a clear blue print. Second, it would be tough to match the BRI in terms of resources. Third, a number of G7 members who themselves share good relations with China may be reluctant to get on board the initiative (even though it has been made clear that the B3W initiative is not just about targeting China)
In conclusion, a lot will depend upon how much not just the US government and big businesses are willing to invest in the B3W (since the model will be different from the BRI which is one of ‘state capitalism’) and whether other members of the G7 along with other US allies are willing to play a pro-active role in such a project. An alternative is needed to the BRI and the announcement of B3W is welcome, taking it forward and competing with BRI may not be impossible but is certainly a tough task.