BRI puts developing nations on right track for growth

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The China-proposed Belt and Road Initiative (BRI) puts developing nations on the right track to achieving their long-term development goals, a scholar has said.

Khairy Tourk, professor of economics with the Stuart School of Business at the Illinois Institute of Technology in Chicago, has studied the BRI for years and published the book ‘The Belt and Road Initiative – Chinese solution to a deficient global order’ in January 2022. He has long been concerned about the Western media’s unrelenting attempts to tarnish the BRI over the last few years.

“During writing my book on the BRI, I was struck by how the international media is spreading falsehoods about the BRI … There has been a lot of negative reporting on the subject,” he said in a recent interview with Xinhua.

In a letter to the Financial Times in early August, while agreeing with the British publication’s opinion view that the BRI is building “worthwhile infrastructure in developing countries,” Tourk disagreed with its statement that the initiative is “morphing into a financial firefighting operation on a grand scale” for China.

“We should guard against blaming China for the difficulties some BRI nations are having in paying off their sovereign debts.”

Taking Sri Lanka as an example, Tourk said the island country owed only 10 per cent of its total sovereign debt to China, whereas 47 per cent is the country’s market borrowings from Western hedge funds and banks.

“Sri Lanka’s recent default has nothing to do with the Chinese loans,” he said.

Tourk attributes the primary reason for the distress to recent changes in US monetary policies. “For developing countries, from Sri Lanka to Argentina, the greenback’s rise has made servicing dollar-denominated debts essentially impossible.”

“In addition, there is no need to exaggerate the problem of debt distress. The BRI loans do not represent a threat to the global economy,” he said.

Furthermore, infrastructure has not been the main focus of post-1945 multilateral institutions for decades. “The BRI has drawn world attention to the importance of infrastructure as an essential pillar of economic development,” he said.

China has done its best to help countries in distress, Tourk said, referring to measures including ‘rescue’ loans to many BRI countries.

There are two ways to look at the BRI in the world at present, Tourk told Xinhua. Western countries look at the BRI through a geo-strategic lens, he said. “We are back to the Cold War, zero-sum game mentality.”

Bashing China “is fashionable in many quarters in the West,” Tourk said. Whenever the Western media report on the BRI, they are used to portray the initiative with skepticism.

Developing nations, on the contrary, consider the BRI the best hope for development, he said.

For decades, these countries couldn’t modernise their antiquated infrastructure, he said. “Now China is providing them funds, the construction expertise to build modern infrastructure, and this is the basis for sustained development, and bodes well for the economic future of developing nations.”

In the long term, developing nations will need to borrow until their economies become productive enough to earn foreign exchange through exports and climb the technology ladder, Tourk said.

“The BRI represents their best hope for achieving their dreams of industrialisation and improving the quality of life of the people,” he added.

(Xinhua)