Beijing played the perfect host to the first Belt and Road Forum in the month of May. What was termed as the biggest diplomatic event hosted by China in recent times, some one thousand five hundred officials and experts from more than one hundred thirty countries and organizations attended the forum.
The Forum, organized for the first time after the One Belt One Road initiative was launched in 2013 by China, was attended by 29 heads of state and governments. Among the notables who attended the forum were Russian President Vladimir Putin, Turkish President Recep Tayyip Erdogan, Philippines President Rodrigo Duterte, Prime Minister of Italy Paolo Gentiloni and Prime Minster of Greece Alexis Tsipras alongside a host of other world leaders and top ranking officials.
“Global growth requires new drivers, development needs to be more inclusive and balanced, and the gap between the rich and the poor needs to be narrowed. Hotspots in some regions are causing instability and terrorism is rampant. Deficit in peace, development and governance poses a daunting challenge to mankind…what we hope to create is a big family of harmonious co-existence”
Inaugural address by Xi Jinping
The Chinese President Xi Jinping inaugurated the two day forum. In his inaugural address, Jinping underlined the importance of the forum and termed it as the ‘project of the century’ and not an attempt to form a small group of countries ‘detrimental to stability’. Underlining his vision, he said that “Global growth requires new drivers, development needs to be more inclusive and balanced, and the gap between the rich and the poor needs to be narrowed.” Dispelling any notion that this is an attempt at hegemony by any country or region he said “what we hope to create is a big family of harmonious co-existence” and that all countries were welcome to take part in the project.
He further stressed upon the historical importance of mutual learning and underscored the fact that only through these routes “Buddhism, Islam and Arab astronomy, calendar and medicine found their way to China, while China’s inventions spread to other parts of the world. More importantly, the exchange of goods and know-how spurred new ideas.”
Economic and trade institutions
Apart from world leaders, heads of various global economic institutions and the President of UN General Assembly also addressed the Summit. The President of the UN General Assembly Peter Thomson in his address dwelled upon sustainable development and said that “the Belt and Road Initiative brings enormous benefits to all involved and serves as a main driver of the global transformation emerged by the UN 2030 Agenda for Sustainable Development.” OBOR initiative has emerged as an effective response to the economic challenges of the times and a sluggish global economy still struggling to come out of recession. The head of global economic bodies were unanimous in their assessment that this initiative would go a long way in fulfilling the aspirations of the people wanting development and infrastructure for a better life. World Bank President Jim Yong Kim said “for those in the less developed community, our greatest task is to raise our aspirations to meet those of the people living in the countries that are still in need of many more investment for development. The Belt and Road Initiative is most remarkable for just the size of the aspiration.” The Managing Director of the International Monetary Fund (IMF) Christine Lagarde echoed the sentiment and said “The Belt and Road Initiative is about connecting cultures, communities, economies, and people, and about adding new economic flavors by creating infrastructure projects that are based on 21st century expertise and governance standards.”
At the forum it was felt that infrastructure is essential and lack of proper transport network should be on top of the trade cost list and the One Belt One Road should play an important role in responding to this need. The One Belt One Road Initiative should act as a pioneering, international framework based on an “open platform concept,” which does not need a leader, but a curator who acts as a catalyst and coordinator for ensuring win-win outcomes. The forum was also addressed by other dignitaries. The forum spread over the two days witnessed hectic activities, parleys and negotiations. Sessions covered a wide range of topics. There were thematic sessions on connectivity such as “Connectivity of Development Policies and Strategies”, “Think Tank Exchanges” and “People to People Connectivity”.
Cooperation deals and finances
During the two day forum China signed cooperation deals with 68 countries and international organizations. The deals were signed in the areas of policy coordination, infrastructure building, trade, investments and finance as well as people-to-people exchanges.
The Chinese President announced that China would invest an additional $124 billion into countries and projects linked to OBOR. China is also going to scale up support for the initiative by contributing an additional 14.5 billion dollars to the Silk Road Fund. In a major announcement Jinping also announced that China Development Bank and the Export-Import Bank of China would set up special lending schemes worth 36.23 billion and 18.8 billion dollars respectively to support the initiative on infrastructure, industrial capacity and financing. The developing countries and international organizations participating in this initiative will also be aided with an extra funding of 9.5 billion dollars over the next three years to improve the quality of people’s lives.
“For those in the less developed community, our greatest task is to raise our aspirations to meet those of the people living in the countries that are still in need of many more investment for development. The Belt and Road Initiative is most remarkable for just the size of the aspiration”
What is required is a transparent, collaborative and planned approach so that the benefits of infrastructure investment and connectivity across the region are optimized. Market principles and best financing practices are prerequisite to create a level playing field to achieve that objective. According to an estimate of the Asian Development Bank, infrastructure sector in Asia will face a twenty six trillion dollar gap by 2030. That makes it imperative that there is a cross border infusion of capital to boost sustainable growth for all. OBOR must act as an instrument to build bridges and not walls. A holistic and long term vision must replace piecemeal approach. This will also help achieve the target of sustainable growth and mitigate the environmental damage on the lines of the Paris Agreement.
This sentiment reflected in the final communiqué of the world leaders. It said “We are mindful that the world economy is undergoing profound changes, presenting both opportunities and challenges. This is an era of opportunity, where countries continue to aspire for peace, development and cooperation. The UN 2030 Agenda for Sustainable Development with the set of Sustainable Development Goals at its core provides a new blueprint of international cooperation”. In this context, world leaders welcomed all forms of cooperation between countries from bilateral to multilateral to “eradicate poverty, creating jobs, addressing the consequences of international financial crises, promoting sustainable development, and advancing market-based industrial transformation and economic diversification”.
As the world economy is facing immense challenges and the growth remains stunted and downside risk remains, there was a clarion call to countries to come together to promote inclusive and sustained economic growth and sustainable development. World leaders unanimously welcomed and supported OBOR initiative to enhance connectivity between Asia and Europe, which is also open to other regions such as Africa and South America.
The leaders reaffirmed their commitment to build an open economy that should include free and inclusive trade. They also opposed all forms of protectionism and supported the idea of a rule based and equitable multilateral trading system without any discrimination that would benefit all. The next Belt and Road Forum will be held in 2019.
For Mutual Prosperity
On the sidelines of the Belt and Road Initiative, UCLG ASPAC Committee on the Belt and Road Local Cooperation led by Hangzhou was launched with a vision of openness, cooperation and shared benefits. In keeping with the Belt and Road initiative, the Committee will seek involvement and participation of member cities by organizing activities including seminars, training sessions and field trips of varied sizes and themes. These activities will aim to help cities and local governments to identify opportunities for collaboration in multiple areas and also to share with them the good experience and practices of Chinese local governments in management, economic development and social welfare.
Another Committee on 21st Century Maritime Cooperation led by Fuzhou was formed to work with the cities under the umbrella of UCLG ASPAC to jointly build the 21st century Maritime Cooperation center. It will set up the effective dialogue and linkage mechanism among the cities and regions in Asia Pacific, so as to serve as a platform to share ideas and practices on maritime cooperation for the cities and local governments. First meeting of the Committee will be held in Fuzhou early November this year.
UCLG ASPAC also signed an agreement with the China International Cities Development Alliance to foster urban development of cities in China.