US to Offer Alternative to China’s Belt and Road Initiative
U.S. President Joe Biden’s administration said it will announce an infrastructure financing mechanism for low- and middle-income countries, designed to rival China’s Belt and Road Initiative.
The initiative, called “Build Back Better World,” will be launched Saturday with partners at the G-7 Summit in Cornwall, England. It will be “values driven, transparent and sustainable,” according to a senior administration official.
“We believe we will beat the BRI by offering a higher-quality choice and we’ll offer that choice with self-confidence about our model that reflects our shared values,” a second senior administration official said.
The Belt and Road Initiative is the global infrastructure development strategy adopted by Beijing in 2013 to invest in nearly 70 countries. It is a central element of its foreign policy.
The official said the “B3W” initiative, as it is called by its acronym, aims to mobilize the private sector to invest and fulfill tens of trillions of dollars of infrastructure financing needs in the developing world, while meeting labor, environmental and transparency standards.
The timeline, structure and scope of the financing vehicle, as well as the size of actual funding to be committed by the U.S., is still unclear.
The administration official said the hope is that with G-7 partners, the private sector and other stakeholders, the U.S. will catalyze “hundreds of billions of dollars” in infrastructure investment for low- and middle-income countries “soon.”
“It’s fair to ask whether this is going to be actually new funding, new capacity to build infrastructure in the region, or is this a repurposing and repackaging of resources that are also available,” said Robert Daly, director of the Wilson Center’s Kissinger Institute on China and the United States.
To expand its sphere of influence, Beijing is known to give BRI loans to countries for projects that are not considered creditworthy by established international lenders.
“That raises the question of whether this new program is going to be less risk averse,” Daly said, noting that if these projects were bankable, lenders such as the International Monetary Fund and the World Bank would fund them already.