IMF, World Bank Lauds China’s Belt and Road Initiative
By Morris Dogga in Beijing
The International Monetary Fund (IMF) and the World Bank have welcomed China’s Belt and Road Initiative saying it was one of the key channels to achieving financial connectivity and infrastructure investment gap.
The Belt and Road Initiative (BRI) was announced by President Xi Jingping in 2013 with the aim to enhance both China’s development and its cooperation with global partners.
BRI seeks to accelerate growth, focuses on connectivity gaps, inclusive economic development, sustainability,institutional supports and reforms.
Speaking on Thursday during a financial connectivity meeting of the opening session of the Belt and Road Initiative, IMF Managing Director Christine Lagarde, said increased capital mobility and increased financial inclusion are important channels to achieving this greater financial connectivity.
Where there is financial connection, the IMF Chief said there would be rapid improvements in quality of life can quickly follow.
Making progress on major infrastructure needs will require capital flows to rise again and to be managed safely.
Greater openness to capital flows can also bring down the cost of finance, improve the efficiency of the financial sector, and allow capital to support productive investments and new jobs, Lagarde said
“Just like our history, our modern financial landscape reveals the enormous potential of better connections between nations and between financial institutions across borders. These financial connections can lead to new construction, new jobs, new opportunities, and, ultimately, the ability to achieve economic security.” She added.
“If we find ways to harness the potential, we can build more prosperous, inclusive economies that benefit all.”
She further added that China’s further opening of the bond market to foreign investors will enable diversification and foster the internationalization of the Renminbi (RMB).
Word Bank Chief Executive Officer Kristalina Georgieva said is expected to help in closing investment gaps in infrastructure sector in low- and middle-income countries.
These countries can maximize the opportunities under the BRI and can source their infrastructure investment requirement through this cooperation, she mentioned.
“The question is: What can we do to open up more opportunities for private sector to invest because without it we will not close this gap,” the World Bank chief said.
“That means our work should focus on stable and transparent regulations; institutional capacity; to secure the right conditions for the private sector, standards in place in the world of climate change, standards for low-carbon climate resilient investment; and reducing risk,” Kristalina added.
Over 126 countries and 29 international organizations have signed cooperation agreements with China to jointly build the Belt and Road.
In this year’s forum more side events are planned including 12 sub-forums focusing on practical cooperation and also a conference will be organized specifically for the business community for the first time.
The forum is yet to be officially opened today.
What is the BRI?
The Belt and Road Forum for International Cooperation is a top-level platform under the framework of the Belt and Road Initiative (BRI), which was originally announced by Chinese President Xi Jinping during his visits to Kazakhstan and Indonesia in 2013.
The Belt and Road run through the continents of Asia, Europe and Africa, connecting the vibrant East Asia economic circle at one end and developed
Economic circle at the other, and encompassing countries with huge potential for economic development.
The Silk Road Economic Belt focuses on bringing together China, Central Asia, Russia and Europe; linking China with the Persian Gulf and the Mediterranean Sea through Central Asia and West Asia; and connecting China with Southeast Asia, South Asia and the Indian Ocean.
The 21st-Century Maritime Silk Road is designed to go from China’s coast to Europe through the South China Sea and the Indian Ocean in one route, and from China’s coast through the South China Sea to the South Pacific in the other.