[Skip to Content]

Register to receive the OMFIF Daily Update and trial the OMFIF membership dashboard for a month.

* Required Fields

Member Area Login

Forgotten Password?

Forgotten password

Analysis
New evaluation for Belt and Road

New evaluation for Belt and Road

Calls for 'results-based co-operation'

by Herbert Poenisch in Beijing

Tue 28 May 2019

As the second Belt and Road forum for international co-operation drew to a close last month, concerns about China's strategy were apparent in the joint statement issued by the leaders' roundtable. Chaired by Chinese President Xi Jinping, the roundtable included the leaders of BRI recipient countries, as well as International Monetary Fund Managing Director Christine Lagarde, and António Guterres, secretary-general of the United Nations.

The arguments for and against the Belt and Road initiative are well-known. China claims its infrastructure projects will boost growth and connectivity in recipient countries. Opponents say it will increase these countries' debt burdens without major benefits for the local population or economy.

In contrast to previous iterations, this statement stresses the importance of ensuring sustainability in various aspects of the strategy. These range from economic, social, fiscal, financial, environmental and energy sustainability to food security and water saving. They also include sustainable agriculture, forestry and protection of the biodiversity. The IMF even suggested a new, fully sustainable BRI.

The leaders' statement refers explicitly to a 'commitment to the United Nations 2030 agenda for sustainable development' and to 'following the principles of the UN Global Impact'. As a result, China has pledged to observe UN sustainability standards in all its BRI projects.

While this is a non-binding commitment, it does present a new approach to measuring the benefits of BRI for recipient countries. This evaluation should take a broad view by looking at projects' impact on all 17 SDGs.

It is beyond doubt that BRI projects will increase recipient countries' debt burden. Considering the sums being spent and requiring future repayment, there should be an objective measure of the long-term benefits for BRI countries.

The joint statement calls for 'results-based co-operation'. It says each initiative should be assessed on its potential contribution to the SDGs. A holistic approach is needed to scrutinise projects. Currently they are being looked at from a narrow perspective, one that assumes both China and recipient countries will benefit from BRI.

A holistic approach would measure the impact of BRI projects on reducing poverty (SDG 1), decent work and economic growth (SDG 8), industry, innovation and infrastructure (SDG nine), reducing inequalities (SDG 10), and climate (SDG 13). The statement refers explicitly to food security (SDG two), clean water and sanitation (SDG 6), and life on land (SDG 15). SDG 17, to 'revitalise the global partnership for sustainable development' should also feature in this new approach.

The practical calculation is simple. Before a project is signed, its impact on all SDGs are assessed, whether positive, negative or non-existent. At this early stage, it will be difficult to quantify initiatives, and only those with a broad positive impact should be approved.

In order to fulfil SDG 17, all stakeholders should take part in the assessment process. This includes China, the recipient country's government and civil society, and an outside expert, possibly with links to the UN. The whole endeavour should be the responsibility of the UN regional economic commissions, whose mandate is 'to promote the regional implementation of internationally agreed development goals'.

It is in the interest of the recipient countries to justify the additional debt burden by bringing the country closer to achieving the SDG goals. It should also be in the interest of China for BRI projects to be assessed positively by recipient countries, to enhance transparency and build confidence.

Herbert Poenisch is a Member of the International Committee, International Monetary Institute.

Tell a friend View this page in PDF format