A wind farm outside Tianjin. Credit: Mitch Moxley/IPS

By Nicholas Rosellini
BEIJING, Apr 18 2017 (IPS)

“Pursuing protectionism is like locking oneself in a dark room,” Chinese President Xi Jinping warned the assembled leaders at the World Economic Forum earlier this year. “While wind and rain may be kept outside, that dark room will also block light and air.”

All signs are that China has been heeding its own advice.

With the current geopolitical balance seeming to teeter on every tweet, China’s brand of multilateralism – which President Xi has described as “a win-win, opening-up strategy,” an engine of development for the world – is an alternative to the zero-sum calculus that has fed a wave of nationalism across developed countries.

At the United Nations, where Member States have pledged to ‘leave no one behind’ with the 2030 Agenda for Sustainable Development, China has been positioning itself as a champion for inclusive growth and peace. China’s engagement combines development assistance, soft loans and direct investment, reimagining possibilities in a transformed landscape in which leveraged financing, rather than grant-making, is fast becoming the new normal.

China has become the largest contributor of troops and second-largest contributor of funds to UN peacekeeping missions among the five permanent members of the Security Council, which also include France, Russia, the United Kingdom and the United States. Through its new UN Peace and Development Trust Fund, it has pledged USD 1 billion to support multilateral cooperation. China is also committing to increase its contributions to the UN development system by USD 100 million by the year 2020.

It is taking a lead on supporting implementation of the Sustainable Development Goals (SDGs), earmarking hundreds of millions to support global efforts to reduce poverty and improve education and health. And, to much relief, it is holding fast to commitments it made during the international climate negotiations to achieve the historic Paris Agreement and its concrete follow-ups.

Regionally and among emerging economies, China has been proactive in building a multipolar architecture of cooperation. Its presidency of the G20 has helped to build consensus around inclusive growth as a shared agenda.

Some 57 countries have signed on to the new Asian Infrastructure Investment Bank, in which China has a 30 percent stake. The BRICS New Development Bank, with 20 percent Chinese contribution, is aiming to support sustainable development initiatives in emerging economies. Both are widely seen as an alternative to Western dominance of multilateral financial institutions and represent China’s leadership in creating new development financing mechanisms and reconfiguring the global governance architecture.

Examples like these are encouraging for proponents of inclusive growth and equity. Yet practice does not always match principle. China has become one of the major South-South development partners in the world, providing by end 2015 some US$63 billion worth of development assistance to 166 countries, both directly and through regional and international organisations. Under the framework of South-South cooperation, China observes principles of mutual benefit, no-strings attached, equality and non-interference in its engagement with other countries. In reality, however, support sometimes comes tied to national regulations and requirements that Chinese parts and labour be used. Opportunities to build capacity and sustainability sometimes are missed in the transfer of technology or equipment, or in the building of infrastructure.

China will need to perfect the balance of interests underpinning its multilateral approach. How does pursuit of the ‘Chinese dream’ – that of a prosperous country, strong and proud at home, powerful and influential abroad – square with the cultivation and preservation of global public goods like clean air and water? Are they mutually reinforcing? Is there a point at which one ends and the other begins?

Even those not charged with creating public goods must be responsible custodians of them. As China’s cities grapple with the effects of pollution caused by decades of neglect, the Chinese private sector has increasingly embraced sustainability as a pillar of good business at home and abroad.

Since Chinese companies are, as a bloc, the third largest investor in the world – their direct investments overseas reached USD 145.7 billion in 2015 – this is welcome news for global development. UN development practitioners are working with the Chinese private sector to promote inclusive practices in business operations, create partnerships that contribute to achieving the SDGs, and ensure that capital markets are aligned to the SDG agenda.

As it rises in prominence as a development partner, China has an opportunity to avoid the mistakes of well-intentioned initiatives of the past. It can be demand- rather than supply-driven, contributing solutions to challenges that the countries it engages with have themselves identified as priorities. And it can use its massive investment, through its blended offer, to support around the world new models of growth and cooperation that are anchored in the principles of inclusivity and sustainability it espouses.

For all its visibility and might, China is still very much a developing country. Yet its adoption of a complementary brand of multilateralism offers welcome grounds for hope in these times.

Excerpt:

We live in a world of increasing interdependency and complexity, where international cooperation is necessary, however increasingly multifaceted and complicated. Global challenges such as climate change, global health and security issues require ever higher degrees of global effort and collaboration if they are to be overcome. This calls for new ideas on how to make global governance work better for all countries and people.

Source: mareeg.com

The BRI covers a vast population of 4.4 billion and an economic output of USD 21 trillion in more than 70 countries in the Asia and the Pacific, Europe and Africa. The majority of them are emerging and developing countries. Through connectivity, it aims to foster trade, financial integration, and people-to-people bonds, while promoting inclusiveness and win-win cooperation – hence reshaping the landscape of international cooperation.

In today’s globalised world, economic and social linkages inevitably transcend borders, as does environmental sustainability. A key strength of the BRI is that it strategically targets recipient countries’ development gaps. According to the ADB-ESCAP-UNDP joint study (Making it Happen, 2015), in the Asia Pacific Region alone total financing requirement for infrastructure is at USD 8.3 trillion between 2010 and 2020, or USD 750 billion per year. While the majority of financing is expected from government revenues, FDI will play an increasingly important role – making the BRI a powerful framework for facilitating its flow.

Some countries are already fully engaged and investment and trade are expanding rapidly. Outbound direct investment made by Chinese companies to BRI countries reached USD 12 billion in the first three quarters of 2015, growing by 66 percent from same period a year earlier. For example in Pakistan, where the Pakistan Economic Corridor has been initiated, this will amount up to USD 46 billion mainly for the energy and logistics sector. Similarly, in the case of Indonesia, financing frameworks are set for around 52 planned projects, to be funded by the China Development Bank and local Indonesian financing institutions.

The question is how these investments can be a new wave that brings not only economic development, but human development benefits along the way. The BRI will contribute to improved infrastructure and industrialisation, but it should not stop there, and must also transform local communities and bring about poverty reduction, environmental sustainability and inclusive social development, contributing to the achievement of Agenda 2030.

Highlighting sustainability is a critical aspect of the BRI’s credibility, and the synergies and complementarities between BRI and SDGs can help create a win-win outcome. The BRI is intended primarily to be driven by commercial and economic priorities, relying heavily on the private sector, guided by market rules and international laws. Yet, its success will critically depend on the ability to contribute to national and local development objectives, and inter alia improving the livelihoods of local communities, through for example creating decent jobs, increasing capacities and overall living standards. Social cohesion should also be strengthened by the BRI through including the most vulnerable, hence address issues of equity, positively impacting migration flows and demographic changes. At the level of policies, the BRI should equally target policy harmonisation to further facilitate investments with lowered risks and transaction costs.

The broader UN system, including agencies, such as UNDP, UNICEF and UNIDO, is ready to play a facilitating role to ensure alignment of the BRI with the SDGs. UNDP recently signed an agreement with the Government of China, aiming to support China and the other Belt and Road countries in achieving their development aspirations, building more consensus, providing analytical basis for policy makers to engage on the BRI, and identifying practical projects coupled with investments to ensure that common economic prosperity will go hand-in-hand with inclusive social and environmental gains.

This is just the beginning. We have a long road ahead of us, but we at UNDP truly believe that development can be achieved only through a broader vision bringing together ideas, resources and partners with capacity to reach the common goal of shared prosperity for sustainable development.

The author is UN resident coordinator and UNDP resident representative in China.

This story was originally published by The Daily Star, Bangladesh