Belt and Road Initiative proposed by China could stimulate sustainable Asian and global economic growth, a leading Bangladeshi legal economist told Xinhua.
In an exclusive interview recently, MS Siddiqui, a professor at Dhaka's Daffodil International University, said the Belt and Road Initiative will connect countries that represent 30 percent of world gross domestic product (GDP), 63 percent of global population, and most of known energy reserves.
PROMOTE INFRASTRUCTURE DEVELOPMENT
In particular, countries along the Belt and Road routes, especially those with underdeveloped infrastructure, low investment rates, and low per-capita incomes, could experience a boost in trade flows and benefit from infrastructure development, said Siddiqui.
The Belt and Road Initiative refers to the Silk Road Economic Belt and 21st Century Maritime Silk Road, in a bid to revive the historic trade routes by boosting cooperation between China and other nations. The Silk Road Economic Belt revival project could involve more than 60 countries and regions.
According to the economist, Chinese investment in large infrastructure projects constitutes the basis of the China-led initiative, which consists primarily of infrastructure that facilitates east-west trade over land, such as railways, roads and pipelines. China has committed a total of about 100 billion U.S. dollars to a trio of new infrastructure funds, allocating 40 billion U.S. dollars to the Central Asia-focused Silk Road Fund, 50 billion U.S. dollars to the new Asian Infrastructure Investment Bank (AIIB), and 10 billion U.S. dollars to the BRICS-led New Development Bank, he mentioned.
The vision document for the Belt and Road Initiative, goes well beyond just infrastructure, and envisions closer coordination of economic development policies, harmonization of technical standards for infrastructure, removal of investment and trade barriers, establishment of free trade areas, financial cooperation and "people to people bonds" involving cultural and academic exchanges. Personnel exchanges and cooperation, media cooperation, youth and female exchanges, and volunteer services, are also major components of the initiative, he said.
"China would be able to better secure its energy and raw materials supply, which now predominantly gets shipped through the Strait of Malacca and the South China Sea as China is gradually becoming more influential economically and diplomatically.
Eventually it will shift geo-strategically from a 'low-profile' international strategy and take on a far greater role in global affairs." With the Belt and Road Initiative, Siddiqui said China as "a new great power is trying to supplement the international economic order."
OPPORTUNITY FOR BANGLADESH
"Bangladesh is in a strategic location between China, India and ASEAN countries and hence is well placed to be a trading and manufacturing hub. Bangladesh needs such increased connectivity with other economies in this region and China's Belt and Road Initiative will see the realization of this economic area."
He added that Bangladesh should seek more Chinese support to help develop more mega infrastructures and develop other facilities related to finance and technology.
"Following China's construction here of the multipurpose road-rail Padma Bridge bridge, we are expecting China to help develop a deep sea port," the economist said.
Bangladesh also needs Chinese support on regional and global issues and has invited China to be involved in regional issues with other relevant countries, he said.
Siddiqui went on to explain that the current infrastructure and energy sector projects bottlenecking in Bangladesh transpired mainly from a shortage of long-term investments. The Bangladeshi government's budgetary allocations and long-term financing from local and foreign enterprises including banks, non-banking financial institutions and insurance companies, were not sufficient for maintaining the required investment for these sectors, he said.
"Bangladesh will have to spend between 7.4 billion and 10 billion U.S. dollars a year until 2020 to bring its power grids, roads and water supplies up to the standard needed to serve its growing population. In total, the country will require between 74 billion and 100 billion U.S. dollars between 2011 and 2020, or between 7.38 to 10.02 percent of its gross domestic product to improve infrastructure."
BCIM (Bangladesh, China, India and Myanmar) economic corridors will increase trade, transport, tourism and investment for Bangladesh, due to its strategic location between India and China, he said.
"The availability and affordability of workers and its geographical location are important aspects of Bangladesh developing into regional hub, yet it urgently needs a port, and related infrastructure to boost connectivity with other nations through ocean and land routes. The Belt and Road Initiatives will open up numerous opportunities for Bangladesh," said Siddiqui.
CONNECTING WORLD EFFICIENTLY
He said Chinese investment in large infrastructure projects constitutes the basis of the Belt and Road Initiative and emphasizes the commercial and open nature of the modern version of this network, he said.
He further explained that the ambitious programs of infrastructure construction along the main Asia-Europe shipping route will also result in connecting the world more efficiently.
"Firstly, China is gradually becoming more influential economically, diplomatically and geostrategically in regions close to Europe, therefore stronger investment and trade relations between China and countries in Africa, the Middle East and Central Asia are increasing China's stake in regional affairs, as friendly relations with Beijing increase," Siddiqui said.
"Secondly, the Chinese government has an increased ability to influence routes trade between China and the European Union. And in the long term it is likely that transport and supply chain routes involving Asia and Africa will increasingly bypass those of Europe," the economist concluded.