Chief Economist of the Eurasian Fund for Stabilization and Development co-authored the book entitled ‘China’s Belt and Road Initiative: Potential Transformation of Central Asia and the South Caucasus’

28 October 2019

Evgeny Vinokurov, Chief Economist at the Eurasian Fund for Stabilization and Development, co-authored the book entitled China’s Belt and Road Initiative: Potential Transformation of Central Asia and the South Caucasus. The publication was launched at the Global Meeting of the Emerging Markets Forum in Washington DC on the 20–22 of October 2019.

Moscow, October 28th, 2019

Evgeny Vinokurov, Chief Economist at the Eurasian Fund for Stabilization and Development, co-authored the book entitled China’s Belt and Road Initiative: Potential Transformation of Central Asia and the South Caucasus. Co-edited by Harinder Kohli, Johannes Linn, and Leo Zucker, the publication was launched at the Global Meeting of the Emerging Markets Forum attended by heads of the Asian Development Bank, the Asian Infrastructure Investment Bank, and the European Bank for Reconstruction and Development.

The contributors to the book are researchers from 11 countries. Over the period of work on this publication, dozens of papers were prepared and a host of public events took place. The special features of this research project is a weighted approach to the achievements and challenges associated with BRI implementation in Central Asian and Caucasian countries, as well as the ‘inside out’ approach involving experts from all countries of the region.

The book provides a qualitative assessment of infrastructure investment made as part of the BRI, as well as of volumes and disbursements. The amount of disbursed FDI approximates $100 bln, and that of committed and disbursed loans $600 bln. Loans to low-income and lower-middle income countries are often concessional. E.g. in Kyrgyzstan and Tajikistan, a typical repayment period of around 20 years, an effective interest rate of 2% per annum, and a grace period of 5-12 years.

The book also provides a qualitative analysis of major BRI projects’ effects on involved countries in terms of economic development, as well as debt and fiscal sustainability.

As for the BRI impact on regional economies, it was noted at the presentation that “the glass is 75% full, but there’s more to fill.” The key drivers are the reduction of transport costs and the intensification of mutual trade. Despite the prevailing share of debt instruments, there’s a simultaneous increase in transboundary direct and portfolio investment in industry, energy and electric power, agriculture, and tourism.

However, the authors are concerned with the countries’ debt and fiscal sustainability. Many of these countries are low and lower-middle income economies with unstable economic growth. For this reason, the authors support China’s plans announced at the Second Belt and Road Forum in Beijing in April 2019 to analyse debt sustainability of each country in cooperation with international financial institutions.

Project experts call for greater transparency of financial flows within the BRI. In addition, the international team of authors emphasise the need to assess more thoroughly the potential demand for infrastructure, as well as social impact and environmental risks. In this connection, they praise China’s intent to multilateralise the BRI by establishing a technical centre with the involvement of major international financial institutions.

Selected chapters of the book and a Policy Paper can be found here:

Emerging Markets Forum (2019) Maximizing the Positive Impacts and Minimizing the Risks of the BRI. Emerging Markets Forum Policy Paper (attached).

Kohli, H., Linn, J., Zucker L. (eds.) (2019) Overview. China's Belt and Road Initiative: Potential Transformation of Central Asia and the South Caucasus. Sage: Los Angeles, London, New Dehli, Singapore (attached).

Kohli, H., Linn, J., Zucker L. (eds.) (2019) Introduction. China's Belt and Road Initiative: Potential Transformation of Central Asia and the South Caucasus. Sage: Los Angeles, London, New Dehli, Singapore (attached).

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