Tricia Yeoh’s Advice to Malaysian Prime Minister– Don’t provide misleading information to foreigners


August 18, 2017

Tricia Yeoh’s Advice to Malaysian Prime Minister– Don’t provide misleading information to foreigners

by Tricia Yeoh@www.freemalaysiatoday.com

Image result for Tricia Yeoh and Najib RazakSpeak the Truth, Keep Your Promises and Act with Conviction

 

Mr Prime Minister, you gave an outstanding speech to international investors at the Invest Malaysia 2017 conference. I am sure many were impressed with the economic achievements that have been accomplished to date under your leadership. However, I do believe that some of the facts that you quoted would require some further elaboration.

Please allow me to do so, especially since one would not want to provide misleading information to foreigners who may not know any better about this beloved country of ours.

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Malaysia–Beautiful from afar, but rotten at the core

You started your speech by saying that you introduced the New Economic Model (NEM) seven years ago at the very same conference, with a plan that has worked and is continuing to work. Perhaps I may remind you that one of the key approaches of the NEM’s economic development plan was to move away from “dominant state participation in the economy” towards “private sector-led growth”.

An IDEAS policy paper published last year examined GLC disposal and investment exercises from 2011 to 2014 (after the NEM was published, by the way) and found that the total acquisition value of RM51.7 billion dwarfs the total disposal value of RM29.5 billion. In simple language, GLICs and GLCs combined have acquired far more than they have sold.

Second, you quoted a Bloomberg article which stated that the ringgit is “easily the strongest major Asian currency this quarter”. What you failed to note was that this is considered a remarkable improvement only because the ringgit had recently rebounded from a 19-year low. Anyone who has children studying overseas would know that as recently as January this year, the ringgit had lost about 22% since the start of 2015 and was at that point the worst-performing currency in emerging Asia. In fact, an analyst in the very same article you quote from seems to imply that the recent growth momentum is strongly related to the impending election, and asks “but what happens after it?”

Third, you said that your government is one that is committed to transparency, accountability and good regulation. I, for one, am particularly pleased that you place public importance on the need for these values in your administration.

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The Architect of NEP-Crony Capitalism and Patronage Politics

Having integrity and governance units at all GLCs – at both federal and state levels – should certainly be applauded. However, these units are monitored by the Malaysian Anti-Corruption Commission, which reports to the Prime Minister’s Department. It is difficult to see how any conflict of interest involving your administration could be avoided if the integrity and governance officers were to uncover a certain wrongdoing within their GLCs placements.

Fourth, you referred to international bodies such as the Organisation for Economic Co-operation and Development (OECD), International Monetary Fund (IMF) and the World Bank, all of whom apparently heaped praises upon Malaysia’s glowing economic performance.

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While the summaries of these reports may have been relatively positive, for which one can certainly be proud of, you failed to mention numerous other instances which are basically big, red flags. These warning signs are indicators that not all is perfect. I say this not with the intention of disparaging my own country – far be it that I would discourage investors from coming in to provide valuable capital for future long-term growth – but to be frank about what it will really take to move our economy forward. Unless we face the honest truth squarely in its face, we will never institute meaningful reforms and will merely chug along.

On this note, you quoted IMF as saying that Malaysia is amongst the fastest growing economies among peers. The very same report also highlights that our country’s “federal debt and contingent liabilities are relatively high, limiting policy space to respond to shocks”. Second, it also says that our “household debt remains high, with debt servicing capacity growing only moderately”. These are only two points that I am lifting from the report – if one looks closer, there are serious challenges that may implode over time if left uncorrected.

Similarly, you quoted the World Bank report that states our economy is progressing from a position of strength, but failed to mention that the same report says that risks in the economy “arise from growing threats of protectionism” and that there is a need to “accelerate structural reforms in the economy”.

I would advise you to personally read these documents from cover to cover to really understand the conditions of the economy today. In short, there is a need to examine the details and not just gloss over the summaries of these reports, advice I would provide to any investor looking into Malaysia.

Fifth, you deftly talked about how your administration is cracking down on “crony capitalism”, “sweetheart deals” and that there would be no more “national follies kept going to stroke the ego of one man”. I especially like this one, where you say “No more treating national companies as though they were personal property” – brilliant. Let us hope then that the national agencies such as the Attorney-General’s Chambers will lend its co-operation to any and all investigations including those from international bodies to assure us that 1MDB will not fall into such a category.

Sixth, you hailed SMEs as the “hallmarks” of your administration as they are the backbone of the economy. You also said that government policies are, therefore, meant to be business-friendly and pro small and medium enterprises (SMEs).

However, the Price Control and Anti-Profiteering Act is one such policy that is adversely affecting SMEs. The mechanism poses price ceilings on food and household goods sold at mamak and even small sundry shops. The mechanism to calculate the “right” price is so complicated that some shops have just shut down altogether because they could not afford to pay the fine. There are numerous other examples of regulations that are in fact making it very difficult for the business community to operate, which have been raised regularly at public forums but seemingly in vain.

Finally, Sir, with all due respect, your speech was peppered with many political references, many of which were obviously targeted at a specific individual. I am sure you made your point loud and clear. However, with all due respect, this may have been better said at a platform hosted by your political party – or perhaps out on the road when speaking to your electorate. To have these words uttered at a formal international investment conference may have been considered out of place.

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Perhaps your speech at the next Invest Malaysia conference could be more carefully worded – for the sake of future investment into this country we both call home.

Tricia Yeoh is Chief Operating Officer of IDEAS (Institute for Democracy and Economic Affairs).

With a firm belief in freedom of expression and without prejudice, FMT tries its best to share reliable content from third parties. Such articles are strictly the writer’s (or organisation’s) personal opinion. FMT does not necessarily endorse the views or opinions given by any third party content provider.

 

 

ASEAN– New Challenges Ahead after 50 years


August 12, 2017

ASEAN– New Challenges Ahead after credible 50 years

by Dr. Munir Majid

http://www.thestar.com.my

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FIRST, let us give credit where it is due: 50 years of continued existence in half a century of challenge and change is a feat of achievement. ASEAN can consider that the cup is half full.

The problem with ASEAN is that not enough is known about it. And what is known is usually about where it has failed, like its failure to take a common stand or to propose creative cooperation in the South China Sea disputes.

Or its pusillanimity in removing non-tariff barriers (NTBs) which are seriously hindering ASEAN economic integration and establishment of a single market and production base.

The fact that so many things – the half-full cup – are happening on the ground, is lost. Taking just the ASEAN Economic Community (AEC), how many Malaysians, for instance, appreciate there are over 1,000 of our companies all over ASEAN, taking advantage of regional growth against the frustrations of investment laws and domestic bureaucracies?

How many are aware of huge Thai companies like Charoen Pokphand (one of the largest private conglomerates in the world, employing 500,000 people across the globe) with big plans to make Malaysia its halal food hub?

Just imagine, Buddhist Thailand working in Muslim Malaysia to propel a fast-growing industry forward – despite whatever halal certification problems it might face in Indonesia, for instance – for its food products. Charoen Pokphand will find a way, as it has all over the world, since its establishment in 1921.

The point is, what is heard are the complaints. Inevitably, as these are louder than what is quietly achieved, with whatever difficulty, by the likes of Sime Darby or Gamuda Land or auto-parts company Ingress Corp Bhd.

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AirAsia Bhd, however loud and incessant its complaints, is now the largest low-cost airline in Asia, truly well-established in ASEAN.

The other side of the story, of course, is – the glass is half empty. The loud, big, private sector push is for ASEAN to strive for optimality.

This is where the great divide begins. Old ASEAN hand Bilahari Kausikan of Singapore once famously said ASEAN is a cow which some people expect to be a horse. The suggestion is, it cannot.

However, why not? Even if it cannot, is the cow fully-milked? Perhaps there should be a convergence between those who say the glass is half full and those who say it is half empty.

With respect to the AEC, there is great effort by the official ASEAN side to engage the private sector to forge cooperation, if not quite convergence. The AEC 2025 Blueprint clearly recognises the role of the private sector in the economic integration process.

In 2015, ASEAN Economic Ministers acknowledged there has to be concentrated effort to get NTBs reduced, and agreed with the ASEAN Business Advisory Council (ASEAN-BAC) that the way forward is by concentrating on a few people-centric sectors – agri-food, healthcare, retail and e-commerce, and logistics.

In the middle of 2016, the ASEAN Trade Facilitation Joint Consultative Committee (ATF-JCC) was revived, with part of its remit being to form working groups with expert private sector entities to address NTBs in those four sectors with, additionally, the tourism sector.

In January this year, the ATF-JCC met in Bangkok and ASEAN-BAC was called to discuss the way forward. Some progress in terms of customs procedures was made just recently on how intra-ASEAN trade could be facilitated. But work on the specific, prioritised sectors has yet to begin.

This is part of the reason why, while there is cooperation between the official and private sectors, there is not quite convergence. Rate of progress: the process is not just slow. It is long, grinding and exhausting.

Beyond the AEC, more generally, there is great need to raise the profile of ASEAN among the people at large, especially the young, whose knowledge of what it does is lacking. It is like a close-kept secret. The top-down approach among those of a certain age has to change.

ASEAN’s young population have to be brought into the whole process, to energise it and to form the future that will be theirs. If ASEAN wants to bring them along into that future, it is absolutely essential to form an ASEAN Youth Consultative body to hear from the young what they want of and for ASEAN.

If ASEAN does not do this, it will be wasting one of its most valuable assets – its demographic vitality. They can take on the digital world.

After we recognise credit should be given to ASEAN for what it has achieved, it is a totally pro-ASEAN thing to do to highlight the formidable challenges it faces going forward. The biggest is happening now: digitisation.

ASEAN has not quite addressed what is now popularly dubbed Economy 4.0. ASEAN talks about the opportunities of e-commerce and, correctly, intones that the trading platforms, payments settlement and connectivity have to be in place to drive it. But even as this being talked about – and inadequate progress is made – the sweep of the digital economy might have uncomfortable consequences for ASEAN if it does not prepare itself.

The fourth industrial revolution is more comprehensive than just e-commerce. There are vast opportunities for new industries and services, as well as for greater productivity. But there are also grave challenges to employment and skills development.

ASEAN needs to fashion clear policies on education and training – with emphasis on cognitive skills – and retraining, and on employment displacement. Yet the ASEAN mantra to attract investment remains low-cost of production. But will the manufacturing industries come to low-labour cost Indonesia or Myanmar in the new digital economy?

Unemployment and unemployability could seriously affect these countries, particularly their micro, small and medium enterprises sector. Serious socio-economic problems could scupper ASEAN economic integration, indeed threaten regional cohesion.

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The time to act is now. ASEAN really has not that much time to celebrate its creditable 50 years.

Malaysia Sdn Berhad: Book Review


August 11, 2017

Malaysia Sdn Berhad: Fox guarding the henhouse?

BOOK REVIEW | Minister of Finance Incorporated: Ownership and Control of Corporate Malaysia. Edmund T Gomez et al. Institute for Democracy and Economic Affairs (IDEAS), Kuala Lumpur.

by Prof. Dr. Jomo Kwame Sundaram

http://www.malaysiakini.com

In the late 1980s, the young Terence Gomez proved himself to be the worthy successor to a Malaysian research tradition begun by James Puthucheary in Singapore’s Changi Prison almost three decades earlier. Gomez single-handedly transformed our understanding of the role of politics in the ownership and control of the Malaysian corporate sector.

Employing novel methods as needed and appropriate, the auto-didact researcher showed how official policies and institutions had enabled an earlier generation of selected Malay business professionals to take over some commanding heights of the Malaysian economy.

Change and continuity

In their new book, Gomez and his team of researchers chart developments over the last three decades since he began his pioneering work, paying particular attention to developments following the 1997-1998 crisis. That crisis exposed the vulnerability of the earlier expansion closely associated with the Umno leadership then.

The corporate restructuring and refinancing institutions and processes that followed were not simply bailouts at the public expense, as alleged by some critics then. Instead, as the book shows, most major assets are now under new management, ultimately controlled by the current prime minister cum finance minister.

The authors focus on seven government-linked investment companies (GLICs), namely Khazanah Nasional, Permodalan Nasional (PNB), both under MoF Inc, Kumpulan Wang Simpanan Pekerja (KWSP or EPF), Kumpulan Wang Persaraan (KWAP), Lembaga Tabung Angkatan Tentera (LTAT) and Tabung Haji.

Malaysians may be comforted to learn that of the seven, only Tabung Haji is run by politicians, and the others by professionals. But after all, 1MDB too has been run by professionals (Jho Low is a Wharton graduate) while Felda Global Venture’s previous boss claimed to have a doctorate. The not-so-magnificent seven covered do not include others, such as those in the Felda group, controlled directly by the PM since 2004.

Most bumiputera entrepreneurs who emerged in the dozen years or so before the 1997 crisis also had impressive professional credentials. The apparently better performance of the more recent crop of professional managers may have less to do with their qualifications, than the ethos, checks and balances of the new institutional arrangements introduced and enforced by some GLICs.

Government control

The range of activities undertaken by government-linked companies (GLCs) overseen by the GLICs includes familiar ones from the 1980s such as utilities, finance, plantations, property and construction. Media, previously controlled by the ruling party and its trustees, are now held by GLCs, while investments in hospitals and other services have also grown. With development finance institutions now under GLCs, their original objectives and rationales have been undermined by commercial considerations.

Image result for Terence Gomez and his team

The Gomez team has done Malaysians a great service by describing how things have changed, tracing the bewildering variety of new arrangements. However, how to interpret this variety remains moot, and some informed readers will have their own bones to pick with what is considered most significant in their analysis.

Protracted crisis

Two economic developments help us better understand the recent growing unrest, especially among informed Malays. First, the Saudi-initiated oil price collapse in late 2014 precipitated a more general commodity price collapse. Meanwhile, lacklustre growth in Malaysia since 1998 has been exacerbated by premature deindustrialisation unconvincingly presented as inevitable in achieving developed country status.

Second, despite heavy censorship, news has been leaking out of corporate abuses involving not only 1MDB, but also FGV and other corporations associated with the legendary ‘Malaysian Official 1’. Easy money from China may have helped the regime with its immediate financing problems, but a generation familiar with mounting personal debt senses that this is at the public’s, taxpayers’ and future generations’ expense.

This ‘double whammy’ has been reflected in the much-weakened ringgit and by other indicators. Meanwhile, there have been heightened concerns about the recent foreign investor resurgence, especially with official non-disclosure of ownership data since 2008. Recent erosion of public faith in the state and ruling coalition has been accelerated by unprecedented recent abuses for personal gain and nepotism.

Don’t shoot the messenger

Even if successfully challenged on some details, this important book should open an important new debate on how Malaysia is to progress. Gomez offers some proposals, apparently at odds with the book’s sponsor. Others, especially participants in and observers of Malaysia’s corporate sector and political economy, will promote their own alternative purported solutions. The ensuing debate can only benefit the nation, as Gomez’s first decade of publications shaped the earlier debate and reforms, even if most outcomes may have disappointed him.

While this regime is undoubtedly associated with unprecedented abuses, there is little in the study to support the publisher’s faith in leaving things to the market and simplistic insistence on government withdrawal from the economy as a universal panacea to the myriad problems the nation faces. In the face of the wide-ranging and complex issues involved, this would be tantamount to throwing the baby out with the bathwater.

Unsurprisingly, this publication on the regime’s role in ownership and control of contemporary corporate Malaysia is silent on the current political crisis as the nation approaches the next general election. Nevertheless, IDEAs must be congratulated for sponsoring and publishing this important work.

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JOMO KS received the 2007 Wassily Leontief Prize for Advancing the Frontiers of Economic Thought. The views expressed here are entirely his own.

 

 

Capitalism’s excesses belong in the dustbin of history


August 2, 2017

Capitalism’s excesses belong in the dustbin of history.

by Martin Kirk

https://www.theguardian.com/commentisfree/2017/aug/01/capitalism-excesses-dustbin-history

Image result for Capitalism's excesses belong in the dustbin of history.

Back in February, a college sophomore called Trevor Hill stood up during a televised town hall meeting in New York and put a simple question to the House minority leader, Nancy Pelosi.

Citing a study by Harvard University that showed that 51% of Americans between the ages of 18 and 29 no longer support capitalism, Hill asked if the Democratic party would contemplate moving farther left and offering something distinctly different to dominant rightwing economics? Pelosi, visibly taken aback, said: “I thank you for your question,” she said, “but I’m sorry to say we’re capitalists, and that’s just the way it is.”

The footage went viral on both sides of the Atlantic. It was powerful because of the clear contrast: Trevor Hill is no hardened leftwinger. He’s just your average millennial – bright, well-informed, curious about the world and eager to imagine a better one. By contrast, Pelosi, a figurehead of establishment politics, seemed unable to even engage with the notion that capitalism itself might be the problem.

It’s not only young voters who feel this way. A YouGov poll in 2015 found that 64% of Britons believe that capitalism is unfair, that it makes inequality worse. Even in the US it’s as high as 55%, while in Germany a solid 77% are sceptical of capitalism. Meanwhile, a full three-quarters of people in major capitalist economies believe that big businesses are basically corrupt.

May, Brexit and Future of the UK


August 1, 2017

Why you should and shouldn’t worry about Britain leaving the EU

by  Peter Beard @ 29/07/17

https://thestudenteconomist2017.wordpress.com/2017/07/28/the-good-the-bad-and-the-eu/#more-36

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As Clint Eastwood would say: “Nowadays, politically, everybody is promising everything. That’s the only way you can get elected”. As referenced in the title, British politics has stayed true to Eastwood’s quote. “A strong and stable economy” as Theresa May would put it during her electoral campaign… But as Brexit nears the horizon, can we really be sure of what she’s saying?

Over a year ago on June 23rd, Britain made the decision to leave the EU during the Referendum under David Cameron. Who would have thought it was going to happen? I certainly didn’t, probably nor the ‘Brexiteers’ themselves thought it would actually happen.

£9.8 billion – or in other terms, £188 million a week. That is what Britain net financial contribution was to the European Union. Significant as it may seem, the publics’ final vote decision was a mixture of this, but more important apparently is the standing on Jobs and Immigration. Roughly speaking,

Migration from the EU added £160 million in additional costs for the NHS across the UK – this is somewhat considerable. No wonder the older demographic voted to leave. I imagine it’s the waiting they were fed up with at their local clinic or hospital.

But in all seriousness, the likes of immigration were blamed for the causation of job losses in the UK. However, this is simply not true, especially when the economy is at a 25 year low for unemployment (4.5%). The notion of rising immigration and increased job losses being a direct cause and effect is a misconception. Just because X and Y are correlated does NOT mean that X causes Y or vice versa.

Nevertheless, the EU has reaped some benefits for the UK, such as the £3.19bn subsidies received in 2014 for British farmers – of which now accounts for 50% of farmers’ incomes.

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As it stands, Theresa May’s progress has frankly stagnated. To some, slow progress further advocates the pressing issue of uncertainty. Throughout this and last year’s electoral campaigns, the word ‘uncertainty’ has put fear into both the consumer and the firms of our economy… But why? Surely uncertainty is neither good or bad?

Image result for Keynes on Uncertainty--Quote

 

Well, from a Macro-Economists point of view, uncertainty links to the idea of confidence and consumer sentiment; after all, if an economy is not confident in spending its own money, then no one benefits as money is the fuel used to drive economic growth.

So, if the UK spends less, we would expect greater job insecurity from your larger corporations because they are likely to withdraw inward investment from the UK – of which it is currently 3rd in the world for attracting FDI . Moreover, MNC’s  will no longer be part of the single market – a major benefit for firms when trading goods.

Put simply, not only are jobs at risk, but for the firms that stay in the UK, be prepared for every day retail prices to rise as the cost of extra tariffs will be passed down to the consumer.

However, to some the risk of uncertainty does not pose a serious nor long-term threat. Firstly, There’s no evidence of significant capital flight. London will arguably remain a leading financial centre outside the EU and banks will still want to be headquartered in Britain due to its comparatively low direct tax rates.

Secondly, though we expect the value sterling to fall, this does create inventive for manufacturers to export – perhaps this could be critical for reigniting the economy if and when we enter a recession.

Lastly, the removal of unwieldly EU regulations lowers some of the barriers to entry and thus improves competition – a principle that is good for consumer welfare surplus owing to wider choice and theoretically lower prices.

Overall, there is an underlying theme that was hardly mentioned during the debates: Free trade vs. Protectionism – ironic though that implementing protectionist policies is actually endangering more jobs than it is saving from the UK’s sunset industries such as the Steelworks and Car Manufacturing.

*Overall, I feel bad this post was not very helpful coming to a sound judgement, but neither is Parliament, so I don’t as feel bad after all.

Promises and Pitfalls of the Belt and Road Initiative


July 20, 2017

Asia Pacific Bulletin
Number 388 | July 19, 2017
ANALYSIS

Promises and Pitfalls of the Belt and Road Initiative

By Bipul Chatterjee and Saurabh Kumar

China’s signature economic and foreign policy project – the ‘Belt and Road Initiative’ (BRI), also known as ‘One Belt, One Road’ (OBOR) – is the most ambitious global connectivity project ever launched by China or any country. The project aims to connect 65 Asian, African, and European countries comprising two-thirds of world’s population, through various sub-projects. The estimated investment cost for realizing this project is $4-8 trillion.

The goal of BRI is to connect China with Asia, Europe, and Africa through a network of railways, highways, oil and gas pipelines, fiber-optic lines, electrical grids and power plants, seaports and airports, logistics hubs, and free trade zones.

The promise of BRI

First, a promising aspect of this initiative is the potential reduction in transportation costs which would reduce the price of trade more broadly. At a time when countries are looking for specific measures to reduce trade costs and shying away from free trade agreements, a reduction in transportation costs as a substitute for trade deals can effectively widen the volume of international trade. A Bruegel study pointed out that a 10% reduction in railway and maritime costs can increase trade as much as 2%, while the effects of a reduction in tariffs would take a much longer time to be felt. An Asian Development Bank and Purdue University study estimated that improvements in transport networks as well as trade facilitation measures could increase the gross domestic product (GDP) by 0.3 % for India and 0.7 % for the South Asian region as a whole.

Second, BRI presents huge business opportunities for companies engaged in infrastructure development. A total of over $900 billion is expected to be invested in roads, ports, pipelines and other infrastructure as part of the project. This could immensely benefit countries suffering from inadequate infrastructure for their economic development.

Third, from the point of view of trade facilitation there are a number of factors that will create dynamic effects. China may accrue significant long-term trade benefits if it reduces tariffs through free trade zones, particularly on products from BRI countries. Beijing is also expected to reduce some of the non-tariff barriers hampering the prospects of foreign firms doing business in China including in those emerging areas such as internet banking and electronic commerce.

Potential Implications

Apart from the sheer number of participating countries, BRI appears to be both economic and strategic in nature. This became visible during the recently held Belt and Road Forum for International Cooperation in Beijing. The initiative came under scrutiny after European Union officials voiced apprehensions over transparency, labor, and environmental standards. This resulted in the EU’s refusal to endorse a trade statement tied to BRI. India’s non-participation due to sovereignty issues relating to the China-Pakistan Economic Corridor passing through part of Jammu and Kashmir also served as a serious dampener.

Even though BRI seeks to create trade infrastructure around India, it also encircles the country by creating a ring through land and sea routes passing through several countries with which India has sensitive relationships. However, India – with around 90% of its international trade through maritime routes and only 10% by rail and road – is comparatively less likely to see much benefit through enhanced connectivity under the initiative. Most of India’s maritime trade occurs from its western ports located in Arabian Sea and via land routes within the Bangladesh-Bhutan-India-Nepal network.

In presenting BRI, China appears to be unaccommodating with respect to political and diplomatic issues as well as economic concerns. Trade facilitation alone cannot drive trade flow upward. There needs to be smart and secure management of trade routes so that end-to-end supply and value chain networks can be strengthened. In recent times, piracy has emerged as a major potential threat for railways and highways as well as maritime routes. BRI does not address these challenges in a meaningful way.

Although the project was launched around four years ago, it suffers from a lack of key information, operational strategy, terms of reference, and detailed work plan for the role of partner countries. This has eroded trust.

The Next Steps

While it is true that China’s economic and strategic interests are intertwined, it would have been beneficial for the BRI to be planned more holistically in order to give due consideration to the economic and political interests of other participating countries. For a large project like BRI, an international governance structure involving all the participating countries to institutionalize objectives and safeguard the interests of participants has to be established now with a particular emphasis on financial mechanism. The decision-making structure for the execution of BRI should be based on consensus.

“While it is true that China’s economic and strategic interests are intertwined, it would have been beneficial for the BRI to be planned more holistically in order to give due consideration to the economic and political interests of other participating countries.”

Several sub-projects of various Chinese companies to receive political and financial support from the Chinese government are being touted as part of this initiative but have nothing to do with it and should be de-coupled so that ambiguity can be cleared and only official BRI projects can be materialized. Participating countries should also get equal treatment in the financing of BRI, so that they can also reap the long-term benefits of the project, a step in this direction could be the revamping of the New Development Bank. A clear operational strategy for the entire project with an economic and political matrix should now be made to increase trust and transparency. This should clearly indicate relative as well as absolute potential losses and gains of participating countries. Active participation of global institutions such as the United Nations, the International Court of Arbitration, and International Court of Justice should be included for reliability as well as to resolve a potential dispute.

BRI should be executed in a selective manner with focus on economically viable sub-projects developing trade and economic corridors, for example a Bangladesh-China-India-Myanmar Corridor in the case of South Asia.

About the Authors

Bipul Chatterjee and Saurabh Kumar are Executive Director and Policy Analyst, respectively, at CUTS International. They can be contacted at bc@cuts.org and sbk@cuts.org.

The East-West Center promotes better relations and understanding among the people and nations of the United States, Asia, and the Pacific through cooperative study, research, and dialogue.

Established by the US Congress in 1960, the Center serves as a resource for information and analysis on critical issues of common concern, bringing people together to exchange views, build expertise, and develop policy options.

The Asia Pacific Bulletin (APB) series is produced by the East-West Center in Washington.

APB Series Editor: Dr. Satu Limaye, Director, East-West Center in Washington
APB Series Coordinator: Peter Valente, Project Assistant, East-West Center in Washington

The views expressed in this publication are those of the authors and do not necessarily reflect the policy or position of the East-West Center or any organization with which the author is affiliated.

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