It was six years ago that China launched the Belt and Road Initiative (BRI), the largest, most ambitious, pan-Eurasian infrastructure project of the 21st century. Since then, Beijing has been blamed for everything from plunging poor nations into a “debt trap” to evil designs of world domination. Now finally comes what might be described as the institutional American response to Belt and Road: the Blue Dot Network. Blue Dot is described, officially, as promoting global, multi-stakeholder sustainable infrastructure development in the Indo-Pacific region and around the world. It is a joint project of the US Overseas Private Investment Corporation, in partnership with Australia’s Department of Foreign Affairs and Trade and the Japan Bank for International Cooperation.
What is OPIC?
The Overseas Private Investment Corporation (OPIC) is a self-sustaining US Government agency that helps American businesses invest in emerging markets. Established in 1971, OPIC provides businesses with the tools to manage the risks associated with foreign direct investment, fosters economic development in emerging market countries, and advances US foreign policy and national security priorities. OPIC helps American businesses gain footholds in new markets, catalyzes new revenues and contributes to jobs and growth opportunities both at home and abroad. OPIC fulfills its mission by providing businesses with financing, political risk insurance, advocacy and by partnering with private equity fund managers.OPIC services are available to new and expanding businesses planning to invest in more than 160 countries worldwide. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers. All OPIC projects must adhere to best international practices and cannot cause job loss in the United States.
About DFAT
The Department of Foreign Affairs and Trade (DFAT) is a department of the Government of Australia charged with providing the government with foreign, trade, and development policy advice. It manages an A$4 billion aid program as well as the new Australian Infrastructure Financing Facility for the Pacific (AIFFP), which provides lending and grants. DFAT works to make Australia stronger, safer, and more prosperous by promoting its interests internationally and contributing to regional and global stability and economic growth.
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Purpose of JBIC
The Japan Bank for International Cooperation (JBIC) is a policy-based financial institution, its shares wholly owned by the Government of Japan, which has the purpose of contributing to the sound development of the Japanese and international economy and society by taking responsibility for financial functions to promote overseas development and secure natural resources with strategic importance to Japan, maintaining and improving the international competitiveness of Japanese industries, promoting overseas business having the purpose of preserving the global environment, and also providing the financial services that are necessary to prevent disruptions to the international financial order or to implement appropriate measures with respect to the effects of such disruption.
Although, it seems clear that one of the main aims of establishing the new network is to counter China’s ambitious Belt and Road Initiative (BRI) international investment program in Asia and Africa, however, there are some differences. Under Belt & Road, the Chinese Government and state-owned enterprises finance international projects by providing everything from concrete, steel, workers and cash, an approach labeled by some as debt-trap diplomacy. Blue Dot Network was about providing foreign companies, often reluctant to invest in developing countries due to concerns about corruption or climate change, the right information about, which projects to invest in. However, analysts have been quick to deduce the Blue Dot Network is likely about controlling regional power, as it reflects a shared Indo-Pacific strategy among states keen to offset China’s rising power in the region.
Under the BRI program, China has been offering generous loans to developing countries for infrastructure projects. The US has been unable to compete with China’s programs – not least because US foreign aid programs have been reduced sharply in recent years. Instead of trying to match the scale of spending in the Chinese programs, the US has been trying to argue that the quality of investments in infrastructure is just as important as the quantity. The new Blue Dot Network, therefore, is best seen as part of the broader US game plan of trying to persuade developing countries in Asia that they should not rely on Chinese funds for infrastructure. In the last few years, there have been numerous examples of developing countries in Asia entering into hard bargaining with China over BRI projects and of refusing BRI support when they have decided that the conditions are not attractive.
In the end, Blue Dot may be no more than a PR exercise, too little, too late. It won’t stop Belt and Road expansion. It won’t prevent China-Japan investment partnerships. It won’t stop awareness all across the world about the weaponization and non-stop demonization by the US for geopolitical purposes.
[box type=”note” align=”” class=”” width=””]The writer is a Karachi based freelance columnist and is a banker by profession. He could be reached on Twitter @ReluctantAhsan[/box]