US Blue Dot Network to counter China’s BRI
It's early days, but the BDN infrastructure initiative looks like a promising alternative to Belt and Road
By JENNIFER LYN
MAY 21, 2020
'If you want it badly, you're going to get it,' US President Donald Trump reportedly said during a White House infrastructure briefing. Photo: iStock
China's Belt and Road Initiative is building infrastructure in much of the developing world, but the US is offering an alternative. Photo: iStock
In recent years, China’s Belt and Road Initiative has heralded infrastructure development across much of the developing world with the aim of projecting the country’s influence abroad. Newer and less well known, however, is the BRI’s American counterpart, the Blue Dot Network (BDN), which similarly seeks to develop international infrastructure and is beginning to show signs of offsetting Chinese influence.
While the BRI’s origins go back to 2013, the BDN is much newer, announced in November 2019 at the Indo-Pacific Business Forum in Bangkok. The agreement saw the US join forces with Japan and Australia to coordinate infrastructure projects around the world, with many positing that the group hoped to assert itself as the countervailing force against China’s BRI.
“The trade volume between China and countries along the Belt and Road totaled $1.3 trillion in 2018. There’s no reason why BDN shouldn’t be supporting economically viable infrastructure projects across Eurasia to help those countries avoid China’s debt-trap diplomacy,” Duncan D Penn, a senior economist at Paris-based Media Research Inc, told this author.
The BDN’s success remains partly contingent on the involvement of a fourth member – India. So far, the South Asian giant has expressed interest in the US proposal, although it has yet to commit to the same extent as the three other partners.
Subsequent to US President Donald Trump’s visit to India in February, however, interest appears to have been rekindled, with the Economic Times’ editorial board asserting in May that a close partnership between India and the BDR allies should be pursued.
ATF
“India must work with the US and others to adhere to the Blue Dot Network norms for infrastructure,” the editors wrote, pointing out that infrastructural development “can well lead India’s economic integration with global supply chains.”
Subsequent to the initiative’s launch, claims were leveled against the BDN for supposedly not being able to match China’s spending. However, according to the results of a report from the Brookings Institute, the US and its allies do indeed have the financial capacity to keep up with, and even overtake, Chinese overseas infrastructure development.
According to the report, at present, each of the trilateral partners allocates around 0.2% of their gross national income (GNI) to official development assistance. If the countries were to ramp up their spending to 0.3%, that increase would be enough to allow the US and its allies “to compete with China as an infrastructure financier at its current scale” or “avoid being left behind if China increases its financing further.”
According to Adam S Boehler, chief executive of the United States’ new International Development Finance Corporation, significant spending is already under way and is being ramped up across the Indo-Pacific arena on track with targets.
“I would emphasize the $60 billion we have is representative of our capital. We catalyze private capital, so that represents hundreds of billions of dollars of potential investment. We have a significant amount of capital,” Boehler explained in a teleconference call in February.
“The Indo-Pacific region will be a strong focus of the US going forward, and I would stay tuned for some very significant deals here. We’re open for business and you’ll see us be very active in this region,” he added.
The BDN remains very much in its early days. Regardless of the extent to which India becomes involved, and wider infrastructure financing ultimately increases in the long run, for the time being amid the Covid-19 pandemic, many see the BDN as a valuable opportunity to counter what is increasingly perceived as a hostile Chinese presence on the world stage.
This is the view of James Jay Carafano, vice-president of the Kathryn and Shelby Cullom Davis Institute. According to him, the manner in which the Chinese government dealt with the outbreak of Covid-19 in the disease’s early days will, and should, warrant an increasing sense of distrust from China’s global rivals.
“No longer can responsible nations tolerate the regime’s destabilizing interference around the world,” Carafano asserted in an essay for the Heritage Foundation. “Post-Covid-19, there will be a new world map, and this is what it is going to look like.”
He went on to argue that in light of the immense strain under which the world has found itself as a result of the pandemic, the US and China are overwhelmingly likely to emerge at even greater loggerheads than they had been before, and that it is the responsibility of the US to form new alliances to confront the perceived injustices on the part of its new rival.
“The United States along with India, Japan, South Korea, Australia, New Zealand, Vietnam and Taiwan offer a formidable diplomatic framework for bringing peace and prosperity to this part of the world in the face of China’s bullying influence,” Carafano asserted.
All things considered, with a clear spending direction and a wide potential for forging alliances, the little-known BDN appears poised to assert a considerable hindrance to China’s BRI in the months and years ahead.
I would have lived in peace. But my enemies brought me war.