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28 LOGISYM MAGAZINE MAY/JUNE 2018 | THE BUMPY BELT AND ROAD

The Bumpy
Belt and Road
The BRI is something we have been reduce transit time for product to would expect from most government
following for some time - from writing reach markets as well as increased projects. The reporting of negotiations
and speaking about it - to even judging connectivity within the region. and the timeline of developments are
competitions on it. We were recently Even today however, there is much left to the BRI country itself. When
in Nanning for the 2018 Pan-Beibu confusion around what actually is part the country lacks good reporting
Gulf Think Tank Summit to talk with of the BRI and what is not. practices and standards, it adds to the
government, business and think tanks confusion.
on the benefits that the Southern China’s National Development
Transport Corridor and the Belt and and Reform Commission (NDRC) The total value of investments into BRI
Road Initiative overall and how this announced an “action plan”1 in 2015 targeted by the Chinese government
could be leveraged and expedited. for the initiative, narrating the visions, is also ambiguous. President Xi
objectives and principles of the promised “more than” $1 trillion
Some of the more obvious benefits grand project but did not release any worth of infrastructure investments2.
would include, improved transport planned timeline of developments or Currently, the registered capital of all
infrastructure that would significantly a specified end date, something we the funds, policy and state-owned
LOGISYM MAGAZINE MAY/JUNE 2018 | THE BUMPY BELT AND ROAD 29

banks3 tasked to finance BRI projects countries the BRI traverses. This is the countries it spans and impacts -
already exceeds $1 trillioni, with $900 an issue that needs to be addressed. perhaps more urgently rehabilitation
billion4 in projects in the pipeline. When negotiation and decision- of the reputation of the initiative
This leads us to ask two questions. making processes for BRI projects overall.
The more obvious one is how much lack transparency, businesses will be
more there is to the BRI but also what less inclined to invest. Worse, social Fortunately, the BRI is a long-term
exactly is the BRI. and political stability of BRI countries project with significant benefits, if
are threatened. More countries like correctly executed. We are also at
Cross-border projects between BRI India may boycott it and existing what could still be considered the
countries, based on existing bilateral BRI countries may even back out, initial phases of a very grand plan.
ties, are sometimes mistakenly jeopardizing the success of the With the commitment and political
grouped under BRI. To compound the projects. The reputation of Chinese will of the Chinese government
issue, some companies try and put a firms and the Chinese government are and stakeholders, rehabilitating the
spin on what they are doing, be it in also at stake, affecting future take-ups reputation of the BRI and ensuring the
e-commerce or logistics by slapping of Chinese projects. issues and concerns are addressed,
the BRI label on the project to make it seems less of a daunting task.
sound more ‘sexy’. BRI’s potential economic benefits
have received global attention
Ever since the BRI was unveiled by and ignited conversations on all
1
https://www.followingthemoney.org/wp-content/
President Xi in 2013, China has been levels – academia, businesses and
uploads/2017/06/2015_Leading-Group-for-
touting the enormous benefits to trade governments. Unfortunately, the the-BRI_Action-Plan-to-Connect-BRI-through-
and the development of domestic impacts on economic, social and Standardization-2015-2017_E-1.pdf
2
https://www.nytimes.com/2017/05/13/business/
economies. Five years on, whilst we governance (ESG) are often neglected china-railway-one-belt-one-road-1-trillion-plan.html
see some indirect benefits, such as or not prioritized. China has left 3
http://kraneshares.com/resources/
presentation/2017_12_31_obor_presentation.pdf
increased land prices on routes the the onus of addressing these issues
https://www.reuters.com/article/us-china-economy-
BRI is supposed to traverse, there are on the participating companies financing/chinas-eximbank-pledges-at-least-
few if any initiatives that to date has and doing so entails more than 127-billion-of-financing-for-emerging-industries-
idUSKBN1H006Q
resulted in direct, sustainable benefits performing environmental impact 4
https://www.theguardian.com/world/2017/
for countries in Asia. assessments. It does not help when may/12/the-900bn-question-what-is-the-belt-and-
road-initiative
most of these infrastructure projects
In addition to the realization of direct, are in developing countries where ESG i
Silk Road Fund $40bn
sustainable benefits of the BRI, much issues are perhaps not of the highest AIIB $100bn
New Dev. Bank $100bn
still needs to be done. Standardization priority. This is however no excuse BOC + ICBC+CCB $527bn
of customs regulations and for a greenfield project like the BRI to EIBC $127bn (for emerging industries only)
China Dev. Bank $890bn
compliance, data localization issues, regard corporate social responsibility
Total $1,557bn
and technical aspects are some (CSR) as an afterthought. BRI projects
of the challenges that need to be should be built around CSR and higher
overcome. Looking at South East Asia ESG objectives. Although the Action
alone, differences in administrative Plan did include a segment on the
languages, legal systems and cultures need for infrastructure projects to be
already makes regional cooperation environmentally friendly, there needs
difficult. Thus, convergence of to be a greater push for CSR and China,
standards and practices will be even as the biggest advocate of the BRI,
more challenging for BRI. needs to be the one driving it.

The BRI has in the last few months, The benefits surrounding the BRI can
Dr Raymon Krishnan
justifiably or not, attracted quite only be realized when there is more President
some negative press concerning transparency around who and what The Logistics & Supply Chain
Management Society (LSCMS)
corruption and the violation of constitutes the BRI. Much work also
sovereignty centred around Sri Lanka, needs to be done to ensure clear
Pakistan, Malaysia and several other and consistent regulations across