Initiative success hinges on infrastructure funding
Updated: 2015-10-30 07:45
By Cecily Liu and Tuo yannan in Madrid(China Daily USA)
If China's Belt and Road Initiative is to be a driving force in leading the world out of its economic recession, it must facilitate coordination of infrastructure investments, said political leaders and analysts.
Izumi Nakamitsu, assistant secretary-general of the United Nations Development Program, was one of many speakers at the two-day Silk Road Forum in Madrid, which began on Tuesday and attracted more than 200 politicians, businesspeople and scholars from 30 countries.
She said the new major funding initiatives integral to the Belt and Road Initiative, such as the Asian Infrastructure Investment Bank, the New Development Bank and the Silk Road Fund, show tremendous potential to further develop infrastructure financing.
Nakamitsu said it's important that infrastructure investments connected with the initiative be integrated into the economic development plans of nations involved.
China first proposed the Belt and Road Initiative during President Xi Jinping's visit to Central and Southeast Asia in October 2013.
China has already allocated around $100 billion in funds toward the initiative, including $40 billion for the Central Asia-focused Silk Road Fund, $50 billion for the Asian Infrastructure Investment Bank, and $10 billion to the BRICS-led New Development Bank.
The China-led Asian Infrastructure Investment Bank, which seeks to work with the private sector to channel more funding into infrastructure investments, is central to the initiative.
Together, the ambitious plan and the institution can stimulate Asian and European economies, specifically by exporting China's capital, said Zhang Ying, associate dean of the Rotterdam School of Management at Erasmus University.
Vuk Jeremic, president of Serbia's Center for International Relations and Sustainable Development, added that building a cultural understanding between countries along the proposed Belt and Road routes is vital to ensure success for the massive plan.
Without cultural and historical understandings and bridging differences between different countries, it would not be possible to fully realize the benefits of newly built infrastructure, Jeremic said.
Kamel Mellahi, a professor of strategic management at Warwick Business School in the United Kingdom, said he sees the initiative as a growth strategy.
"It has the potential to trigger a virtuous cycle of connectivity, investment in infrastructure and global economic growth. It has the potential to support the global economic recovery by improving, among other things, the transport and communication network between a number of important economic players," Mellahi said.
To that end, many countries have already begun to increase participation in the proposal.
Alan Barrell, a professor and entrepreneur in residence at the Judge Business School at the University of Cambridge, said Cambridge's business and academic community is planning to work with Chinese investors to bring much needed investment to established companies, especially in healthcare, life sciences and agriculture.
Jaime Garcia-Legaz Ponce, Spain's secretary of state for trade, said there are many concrete benefits that Spanish firms can derive from participating in the Belt and Road Initiative, especially in participating in the infrastructure construction process.
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(China Daily USA 10/30/2015 page19)