Eight steps to ensure BRI’s success

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Situationer

M. Ziauddin

The Silk Road was the name given in 1877 by the German geographer Ferdinand von Richthofen to the ancient network of trade routes linking China to central and western Asia, India and the Mediterranean region.
According to Sergio Suchodolski, Director New Development Bank (The New Silk Road: 8 steps to ensuring China’s $900 billion project is a success—published in The Agenda from the World Economic Forum on October 27, 2017) today, China is breathing new life into the Silk Road with the goal of forging stronger relationships with its neighbor’s through the development and sharing of resources.
President Xi Jinping, speaking at the World Economic Forum 2017 in Davos, referred to the ancient Silk Road, highlighting the fact that international trade is an inherent human activity that helped in the past to maintain peace and stability over long periods of time.
Today, the New Silk Road, or what is known as the Belt and Road Initiative (BRI), is said to have the potential to prompt a profound shift in the global order towards a new multilateralism. In a narrow sense, the BRI is primarily a strategic infrastructure initiative of historic proportions.
The planning and delivery of scalable infrastructure for power generation, transportation, water supply, and telecommunications is expected to bring much-needed economic and societal connectivity to the 65 countries along this new network. Through the BRI, China is proposing to share its immense financial and industrial resources and capabilities, as well as its experience of four decades of reform and opening-up, while securing its own long-term development.
The Belt and Road Initiative (BRI)is said to make a unique contribution to international cooperation and economic development: it is based on the stakeholder approach, it seeks to leverage market forces in best ways, it prepares best for the age of the Fourth Industrial Revolution, it is built on the open-platform concept and, most importantly, it is the positive narrative the world needs.
According to Sergio Suchodolskithe BRI has five major goals: policy coordination; facilities’ connectivity; unimpeded trade; financial integration; and people-to-people exchange. Beyond the initial commitment by the Chinese government of about $1 trillion in infrastructure development, which conservative estimates believe to be viable, the BRI will require roughly an aggregate of $6 trillion for the next 15 years to finance infrastructure projects fuelling the Belt and Road economies. During that period, the Chinese plan to cumulatively invest $4 trillion in total – about 20 times the size of the post-Second World War Marshall Plan investment of $17 billion, which has a value of about $190 billion today. Several multilateral development banks have also committedto support the BRI to accomplish those ambitious goals and finance BRI-related projects.
To avoid being locked into unsustainable patterns of development, which has been the common pitfall of large-scale strategic infrastructure projects, the author anticipates eight transformation factors that have the potential to provide high-level stewardship for the BRI and revive the spirit of shared prosperity. These insights are derived from several years of analyzing the infrastructure industry and its development projects.
1. Shared vision: Achieving transnational and international support for a shared vision for strategic infrastructure development that promotes wellbeing and a national sense of purpose to the communities beyond national borders.
2.Multilateralism: Curating an open and multilateral policy dialogue that addresses public-private-civic cooperation, early-stage project financing, standardized procurement and transparency, to level the playing field and build trusted relationships.
3. Project-preparation facility:Creating an infrastructure project-preparation facility to ensure a pipeline of bankable projects and a transnational center of excellence to deliver the largest portfolio of projects ever.
4. Risk mitigation:Proactively mitigating political and regulatory risk to boost stakeholder engagement and confidence in the plan by investors, off-takers and operators.
5. Sustainable development: Committing to sustainability, inclusion and affordability principles to generate value for future generations beyond Agenda 2030.
6. Innovation: Enhancing technological and business model innovation for sustained value creation, ensuring readiness for the future.
7. People-to-people exchange: Governing domestic and cross-border migration and promoting mutual learning and understanding, to enable and deepen people-to-people exchange and transnational cultural cooperation, ensuring transcendent growth and universal purpose.
8. Human-centric and future-ready: Delivering the new humane infrastructure heritage beyond the current infrastructure usage for the next millennium.
To make sure the infrastructure is future-ready (say 100 years hence) and will build a legacy beyond the current infrastructure definition, the author believes the necessary flexibility is needed to be built into today’s designs.
The DNA of today’s infrastructure needs to include repurposing and upgrading capabilities since we don’t know the infrastructure requirements of the future – even more so in the wake of the Fourth Industrial Revolution.
He says what we do know today, however, is that it is preferable the human being should still be in control and at the centre of the urban and infrastructure design. Therefore, RBI has to make sure to place people and their living standards at the centre of economic and technology policy. To effectively respond to the wealth-concentrating technological disruption caused by the Fourth Industrial Revolution, an alternative, human-centred economic growth model is needed. This new growth model requires that social inclusion is consciously designed into an economic “human-centric” policy in a concerted effort. The net increase in prosperity and opportunity enabled through technology and globalization has to be the basis for broadening, strengthening and redistributing wealth more widely among workers, families and communities.
The internet of things (IoT) is a vast number of internet-connected objects and devices that have already exceeded the number of humans on Earth. Nowadays, there is a novel IoT paradigm that is rapidly gaining ground: a scenario of human-centric smart environments in which people are not passively affected by technology but actively shape its use and influence. The Fourth Industrial Revolution will require governments to move beyond reactive measures aimed at efficiency and short-term growth. They will need to proactively chart a course that mitigates the social risks of new technologies and strengthens the positive feedback between growth and inclusion in an economy through a stronger emphasis on certain key domestic institutions.
As President Xi said in Davos: “We should develop a new development philosophy and rise above the debate about whether there should be more fiscal stimulus or more monetary easing. We should develop new growth models and seize opportunities presented by the new round of industrial revolution and digital economy. We should strike a balance between efficiency and equity to ensure that different countries, different social strata and different groups of people all share in the benefits of economic globalization. The people of all countries expect nothing less from us and this is our responsibility as leaders of our times.”