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Monday, November 11, 2019, 16:25
LAC region can learn from China
By Wendell Mottley
Monday, November 11, 2019, 16:25 By Wendell Mottley

Belt and Road Initiative promises to be transformational for Latin America, Caribbean countries

In 1985, an official delegation from the Latin America and Caribbean region was invited by the Chinese government to tour the special economic zones in Guangdong province and see some of the early results of then leader Deng Xiaoping’s opening-up policy. Revisiting the same areas 34 years later, one can only be in awe of the scale of developments. China has indeed become the dynamo of the world economy.

Our LAC region could do with such new thinking and initiatives. In fact, China and the LAC countries should think together about sustainability through the Belt and Road Initiative. Three points are particularly worth exploring.

The first is how the LAC region can learn from China’s development in the past 40 years. The second is the linkage between infrastructure development — both physical and digital — and productivity. LAC countries should optimally manage investments in critical infrastructure to avoid over-indebtedness. Finally, the enormous potential for cooperation under the rubric of sustainable development goals 13 (to combat climate change) and 14 (to conserve and sustainably use oceans, seas and marine resources for sustainable development) is worth emphasizing given how dear it is to someone in the Caribbean.

But first, the history part. Singapore’s Lee Kuan Yew articulated a strategy for economic development that was very inspiring. He asked that critical question “How can Singapore make itself useful to the outside world?” His conversations with Deng Xiaoping led Deng to ask the same question of China. Singapore became a logistical transport hub and China became the world’s manufacturing center. Central to the execution of both strategies was the massive and rapid development of world-class infrastructure. Building on this success, Chinese President Xi Jinping has envisioned a global community with a common destiny. The policy instrument for this vision is the Belt and Road Initiative.

The scale and audacity of the initiative promises to be transformational for participating countries. Trinidad and Tobago was one of the early LAC signatories. We have learned that a long-term vision carefully developed and consistently implemented, and sustained investment in infrastructure, will yield results, growth and prosperity.

Now onto point two, which is the most important. We all agree that infrastructure is critical to development, but we must also observe that the choice and sequencing of infrastructure development must be linked to the greater long-term vision. On a high-speed train from Shanghai to Suzhou, our guide pointed out that the train reduces transport time by two hours, making it affordable for many more people to work in Shanghai, where there are better paying jobs. LAC countries want to understand how China plans and implements these linkages.

Understandably, China is reluctant to advise on infrastructure project choice and evaluation. However, many LAC countries would benefit from an improved capacity to link infrastructure projects to diverse poles of economic activity. The Asian Infrastructure Investment Bank might be an appropriate vehicle for this pre-project discussion and utility.

The LAC countries have had many brushes with poorly designed projects, cost overruns, and roads leading nowhere. Priority might be given to projects that have income-generating capacity. But LAC countries may have to improve their efficiency in tax collection. The International Monetary Fund may also help in fiscal design. In these ways, LAC countries will be able to better service their debts and, more importantly, demonstrate the transformational benefits of large investments.

The Chinese may also be invited to invest equity alongside LAC states. China is familiar with such models, having benefited from Singapore’s investments in Chinese infrastructure projects.

The LAC and Chinese private sectors can also be involved in these partnerships. For example, could Alibaba be encouraged to assist in upgrading selected LAC small and medium-sized enterprises so that they might participate on Alibaba’s multiple platforms as a means of gaining export access to the vast Chinese market?

The third area is the blue economy. In this context we could reframe the question posed by Deng and Lee in relation to the Belt and Road Initiative.

At the same time, LAC can contribute to resolving climate change through pursuing the sustainable use of agro forestry, marine and ocean resources. Historically, LAC countries provide raw materials that have never been a sufficient spur for sustainable development.

Between 2000 and 2009, trade between China and Latin America increased by 1,200 percent, but LAC exports were largely confined to commodities. If we are to truly reimagine sustainability for self-development goals 13 and 14, a new growth point for cooperation is an innovative model based on shared mutual research and development concerning ocean, marine and agro forestry resources. 

It is imperative that LAC countries become full partners in the sustainable development of these ecological resources through new cross-border enterprise models. It seems that President Xi has hinted at this need for a new consciousness to steward any region’s natural resources for the benefit of all humanity.

The author is former minister of finance of Trinidad and Tobago. The author contributed this article to China Watch, a think tank powered by China Daily. 

The views do not necessarily reflect those of China Daily.


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