WASHINGTON: A new study released by World Bank has said that Belt and Road Initiative (BRI) can be a medium to boost the economic development and decrease poverty in many developing countries but it should be achieved by deep policy reforms that will lead to increased transparency, improve debt sustainability, and reduce the risk of environmental, social, and corrupt practices.
The Belt and Road Economics study is calculated to benefit policymakers in developing countries seeing the possible welfare and the risks involved in engaging with BRI projects. It measures the network of proposed transportation projects in about 70 countries along land and maritime BRI corridors that connect Asia, Europe, and Africa. It also provides a series of policy recommendations to help developing countries along those corridors maximize potential benefits while mitigating a variety of threats.
Michele Ruta and a team of World Bank Group economists led the study. It was found that balancing policy reforms would be vital for countries to unlock BRI-related gains. Real income for BRI economies could be two to four times larger if trade facilitation is improved and trade restrictions are reduced. In addition, tougher labor-mobility and adjustment policies would ensure that gains are more equally shared.
Analyzing the data, researchers found that BRI also causes significant risks that are worsened by a lack of transparency and feeble institutions in contributing economies. Several BRI projects cross borders, so management among all economies within a corridor is critical. Among the 43 corridor economies for which detailed data is available, 12—most of which already face elevated debt levels—could suffer a further medium-term deterioration in their outlook for debt sustainability. It could boost global carbon emissions by 0.3 percent—and by up to 7 percent in countries with low emissions levels.
Source: Xinhua News Agency