Countries in China’s immediate orbit of influence have welcomed a plan by the Group of Seven to challenge Beijing’s Belt and Road Initiative, but it will need to overcome reservations about Western commitment to emerging market projects.
The Build Back Better World project (B3W) was championed at last week’s G7 conference in the United Kingdom, but it is still lacking in details and is unlikely to become a reality for several years.
The effort, on the other hand, is being viewed as a challenge by the world’s wealthiest democracies to China’s expanding influence in emerging economies through infrastructure spending.
While Asian governments have stated that they are willing to collaborate with industrialized countries to address their expanding infrastructure demands, B3W will face difficulty in matching China’s ability to engage developing economies in the region.
Southeast Asian states are apprehensive of overdependence on China, according to Choi Shing Kwok, head of the ISEAS-Yusof Ishak Institute in Singapore, offering a potential opening for B3W when it arrives. B3W’s multinational nature, on the other hand, would make it a more complex and potentially slower-moving effort than BRI.
The G7 and its allies will use the B3W initiative to mobilize private-sector funding in sectors including climate change, health and security, digital technology, and gender equity and equality.
Deputy Foreign Minister Mahendra Siregar told Reuters that Indonesia has a number of projects that are accessible to co-investment and that the government is ready to further up its cooperation with wealthy countries.
However, Indonesia’s main point of contact for BRI projects, the country’s coordinating minister for maritime affairs and investment, said developed countries would need to overcome their previous aversion to investing in local development.
Despite the fact that China is one of Indonesia’s largest investors, the country has largely preferred Chinese funding supplied on a business-to-business basis over state-backed investment or BRI efforts.
The Jakarta-Bandung high-speed railway, which is encountering cost overruns, is the most high-profile BRI project in Southeast Asia’s largest economy.
According to a Refinitiv database, more than 100 nations have inked agreements with China to collaborate on more than 2,600 BRI projects totaling $3.7 trillion.