Investment in infrastructure requires cooperation not competition

To counter China’s ‘Belt and Road Initiative’, the United States has come up with its own plan. But rather than compete, the various schemes should augment and support one another

PUBLISHED : Wednesday, 01 August, 2018, 8:17pm
UPDATED : Wednesday, 01 August, 2018, 11:32pm

China alone cannot provide the investment Asia needs in the coming decades to ensure growth and reduce poverty. One estimate puts the amount needed in the coming 12 years for infrastructure projects including power stations, roads, railways, water and sanitation at US$26 trillion, far too much for Chinese companies, loans and aid to shoulder. A plan that joins the United States, Japan and Australia in a partnership to organise development funds for projects should therefore not be faulted. Where matters turn problematic, though, is the rhetoric used and the reasoning behind the idea.

The trilateral agreement aims to “mobilise investments in projects that drive economic growth, create opportunities and foster a free, open, inclusive and prosperous Indo-Pacific”. It pairs with the announcement by US Secretary of State Mike Pompeo of an increase in American financial support to countries in the region through merging existing US agencies. He said greater funding would be a pillar of the regional strategy of US President Donald Trump’s administration and his country would invest US$113 million in new technology, energy and infrastructure initiatives.

Officials announcing the deals made no mention of China, but their rhetoric was obviously directed towards Beijing’s “Belt and Road Initiative” to build infrastructure and trade between Asia and Europe through the Middle East and Africa and the nation’s growing power and influence.

US competes with China’s ‘Belt and Road Initiative’ with Asian investment programme

Western allies perceive Chinese overseas development policies as being aggressive and aimed at giving Beijing a strategic advantage at their expense. Pompeo, on a visit to Asia and with his country locked in an escalating trade battle with China, said the US “will never seek domination in the Indo-Pacific” and that “we will oppose any country that does”. Australian Foreign Minister Julie Bishop spoke of the need for greater support to “enhance peace and prosperity”.

There is nothing aggressive or self-serving about the belt and road; China wants to further integrate its economy with that of the rest of the world and in doing so, all sides will benefit. Building infrastructure including ports, railways and power stations will increase interaction and trade between people, leading to growth and greater wealth. Many countries along the land and sea routes lack the capital and know-how for the necessary projects and China is the best poised to provide such help.

But the scale of the development needed is so great that nations should be working together, not in competition. The various schemes should augment and support one another. Negative rhetoric only causes unnecessary tension.