Belt and Road Meets Build Back Better - Foreign Policy
At a time of competition for winning hearts, minds, and infrastructure contracts, the West's insistence on higher standards, while laudable, could be a hindrance, said Frans-Paul van der Putten, an expert on China at the Clingendael Institute in the Netherlands.
"The dilemma for Europe is, when dealing with China, are you going to become more like China in order to compete and abandon your own standards and values? I think it's inevitable for Europe to shift a little bit, which means coming closer to China," he said.
One of the biggest outstanding questions is whether the overhaul of U.S. and European development assistance can fully mobilize private capital to multiply the relatively paltry amount of public money available to underwrite big projects. One of the big hurdles for Western countries and Western firms is that developing countries offer a higher risk profile for new investments, making private firms leery of jumping in. Trump administration reforms to the U.S. International Development Finance Corporation tackled some of those issues by, for instance, lowering the threshold for U.S. participation in any given project. But to really juice private sector participation and unlock big financing, the United States and Europe will have to play underwriter and assume part of the risk-as China has done with some of its over-the-skis projects around the world.
"If you want to compete at that level, individual banks and companies cannot match this. It can only be done if there is a government guarantee," van der Putten said.
By Keith Johnson. Click on the image below to go to the article.