BRI ushers in more equitable global order

Editor's Note:After a decade of transformative infrastructure projects, what's next for the Belt and Road Initiative (BRI)? Can its success in infrastructure be replicated in other sectors? In fact, this expansion is already underway. This series titled "Building Lasting Value in Belt and Road Cooperation" gathers insights from top scholars and analysts on how the BRI is broadening into areas like green tech, smart cities and beyond, and what this means for the future of global trade and development.

By Ong Tee Keat

Lead: The Belt and Road Initiative continues to boost global trade and growth, especially in developing nations, shaping a fairer, multipolar world that bridges economic divides.

The Belt and Road Initiative (BRI) is now a centerpiece of China's foreign policy, integral to Beijing's vision to build a new type of international relations featuring win-win cooperation.

Despite repeated efforts by some Western countries to discredit the initiative, the mammoth endeavor remains the largest game-changer in multidimensional connectivity to date. It impacts almost 75% of the world's population and accounts for more than half of the global GDP. Over 150 countries and more than 30 international institutions have endorsed the BRI through direct participation, proving its relevance to current developmental needs.

A white paper released by China prior to the third Belt and Road Forum for International Cooperation in 2023 reported that trade with BRI partners grew by an average of 6.4% annually, reaching $19.1 trillion between 2013 and 2022, while the total investment reached $380 billion within the same period. Among these partners, low-income countries, in particular, saw their GDP increase by 3.4% on average.

By all accounts, the BRI has significantly boosted global trade. The World Bank reports a 4.1% increase in trade flows among participating countries, alongside a 5% increase in foreign investment, and a reduction in global trade costs ranging from 1.1% to 2.2%.

The London-based Centre for Economics and Business Research predicts that by 2040, the BRI will likely boost the world's GDP by $7.1 trillion annually. It expects widespread benefits as better infrastructure eases obstacles to global trade.

Indeed, the dire need of infrastructure connectivity — the hallmark of the BRI since its inception — continues to stay relevant, notably in the Global South. While effectively addressing this need, the initiative has also shifted toward less capital-intensive, green, sustainable projects in its new phase of high-quality development. This transition, consistent with the United Nations 2030 Agenda for Sustainable Development, will help the partner countries achieve more green and sustainable development.

People take selfies in front of the Peljesac Bridge in Komarna, Croatia, Aug. 29, 2023. The bridge, a project of China's Belt and Road Initiative (BRI), was opened for traffic on July. 26, 2022. [Photo by Li Xuejun/Xinhua]

Despite that infrastructure projects are more exposed to such risks as debt sustainability, governance risks, environmental issues and financial liquidity, the connectivity created by the initiative continues to yield significant benefits. In addition to creating jobs and increasing foreign direct investment and tax revenues for the host governments, China's export of infrastructure development capacity helps boost the visibility, influence and soft power of these partner countries in the world. In reciprocity, China's enterprises participating in the BRI projects can effectively leverage corporate social responsibility astutely to build goodwill with and endear China to the local communities of the host countries.

In this context, discernible sustainable infrastructure projects can and will still coexist with "small yet beautiful" livelihood assistance programs under the high-quality BRI framework.

However, the growing infrastructure finance gap remains the main challenge, which is too large for any single nation, including China, to address alone.

To tackle the growing infrastructure needs in BRI partner countries, modality of the project implementation can in many ways be attuned to mitigate the teething problems faced in the initial phase. New multilateral development banks (MDBs) and international financial institutions initiated by China, such as the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB), offer practical solutions to share the financial burden.

For developing nations long overlooked by major developed economies in addressing their growth needs, these new institutions provide clear alternatives to the World Bank and International Monetary Fund (IMF).

Indeed, as the world faces shared challenges, the failure of the World Bank and IMF — long considered the twin pillars of global financial governance — to address the needs of an increasingly multipolar world is a proverbial "elephant in the room."

China spearheaded the creation of these two alternative MDBs to fill the gap, not to compete with the World Bank and IMF as the West often speculates. Technically, both new banks have been carefully adhering to the benchmarking practices established by the World Bank. Nonetheless, these institutions need not be excessively sensitive to the geopolitical accusations of "debt trap diplomacy" to the extent of mindfully distancing themselves from the BRI. After all, it is the merits of developmental priorities across the world that matter most in the handling of multilateral development funds.

Aerial photo taken on Dec. 17, 2020 shows the headquarters building of BRICS New Development Bank (NDB) in east China's Shanghai. [Photo by Fang Zhe/Xinhua]

Parallel to this, from the perspective of the Global South, perhaps synergy between the BRI and BRICS Plus in building a better world with a shared future offers an option worth exploring, albeit not without geopolitical challenges.

In this context, BRICS has introduced a wide range of initiatives, including BRICS Pay, the Contingent Reserve Arrangement (CRA), and the NDB. Additional projects in the pipeline, including a cross-border settlement system, a financial depository network, a reinsurance company and a grain exchange, are known to be underway. Many of these efforts align closely with the five pillars of BRI connectivity, namely policy coordination, infrastructure development, unimpeded trade, financial integration and people-to-people exchange. It is envisaged that the synergy of BRICS Plus initiatives and the BRI could help address key aspirations of the emerging multipolar world.

As we have seen, low-carbon and high-quality standards are increasingly emphasized in the second decade of BRI implementation. For China, the green shift is a smart strategy to use its technology leadership to promote sustainable development across the Global South. It also helps foster technology cooperation between China and its BRI partners.

While multiple uncertainties are still looming large across the world with Donald Trump's return to the White House, the world order continues to evolve steadily toward multipolarity where the BRI, BRICS Plus and the like are well received widely in pursuit of more connectivity and prosperity worldwide. The game-changing endeavor, alongside the emerging initiatives of BRICS Plus, are all set to reshape and reset the world sustainably in a new era of high-quality implementation though the collective West would never cease to undermine in defense of its long held unipolar order.

In this context, instead of being apologetic or in denial mode over the game-changing impact of the BRI on the unilateral global order, China should stay steadfast in championing its cause of promoting an egalitarian model of multilateral cooperation which is more aligned with a multipolar order.

Ong Tee Keat is the president of the Belt and Road Initiative Caucus for Asia Pacific.