China’s Belt and Road Initiative (BRI) was introduced in 2013 to build massive infrastructural projects in various countries. The move was intended to improve trade relations. But a number of signatories to the initiative have deemed it to be a debt trap cloaked with good intentions.
In an effort to help countries thinking of signing up for BRI, the World Bank has conducted an analysis that examines the inherent risks and opportunities.
One of the many observations, which financial institutions examined is that BRI offers countries, large infrastructure projects on a platter which can create governance risks, including corruption and failures in public procurement.
Further to this, the World Bank said that the limited data it was able to access indicates that Chinese firms account for the majority of BRI contracts. According to one estimate, the Bank indicated that more than 60 percent of Chinese-funded BRI projects are allocated to Chinese companies, but little is known about the processes for selecting those firms.
The World Bank said that moving toward international good practices such as open and transparent public procurement would perhaps increase the likelihood that BRI projects are allocated to the firms best placed to implement them.
It also said that corruption risk varies across economies and correlates closely with the quality of domestic institutions. It noted that measures to reduce corruption include cooperation mechanisms to increase transparency in infrastructure projects and forms of community monitoring.
For over a year now, Kaieteur News has been at the forefront of exposing how the debt burden from China’s BRI has been breaking the backs of nations which signed up for it.
Sri Lanka for example was forced to sign over its strategically important Hambantota port to a Chinese state-owned company on a 99-year lease in 2017. The transfer of the port was to lift some of the enormous billion-dollar debts Sri Lanka owed to Beijing, debts which came from loans that helped fund Hambantota in the first place.
Other countries, which have landed in the same boat with Sri Lanka include Pakistan, Djibouti, the Maldives, Fiji and Malaysia. (See link for further details: https://www.kaieteurnewsonline.com/category/chinas-modus-operandi/).
In spite of the revelations made by this newspaper and the international reports warning countries about the BRI being nothing more than a debt trap, Guyana still signed up it. Other Caribbean nations, which have done the same include Jamaica, Barbados, Venezuela, Costa Rica, Panama, Trinidad and Tobago, Dominica, and the Dominican Republic.
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