Needed: Multilateral rules for connectivity

The world needs new, sustainable, clean and green infrastructure, but building infrastructure and transport links, digital and energy networks and people-to-people connections requires money. Lots of it.

Assessments of global infrastructure investment needs vary. Asia alone needs to invest $26 trillion from 2016 to 2030, or $1.7 trillion per year, to maintain growth momentum, eradicate poverty and respond to climate change, according to the Asian Development Bank (ADB).

Quality infrastructure is indispensable for the achievement of Agenda 2030. It improves peoples’ lives, boosts mobility, makes countries competitive, and enhances trade and investments. Connectivity can help build peace and resolve conflicts.

Connectivity is also the new geopolitical Great Game, pitting nations with competing visions of Eurasia against each other, prompting fears of connectivity conflicts caused by new rivalries or the reemergence of old ones.

China’s ambitious Belt and Road Initiative (BRI) has captured the headlines since it was launched by Chinese President Xi Jinping in 2013. But Beijing is not alone in developing and projecting its connectivity ambitions. Asean’s Master Plan on Connectivity was launched in 2010. Japan, India and Europe, as well as Russia and the United States, are working hard to further their own connectivity agendas at home and in Asia and Africa.

But so far, so chaotic. The focus on linking up continents, regions, nations and communities is welcome and long overdue. But instead of encouraging synergies and cooperation, competing initiatives are injecting additional strains in an already tense geopolitical environment.

That’s why it’s time to multilateralize connectivity. Infrastructure is a vital public good that requires responsible connectivity actors, strong governance and a rules-based multilateral framework.

Infrastructure networks should be coherent, interoperable, as well as financially and environmentally sustainable. Calls for tender should be open and transparent. There is a need for better governance, more coordination and increased exchanges—and agreements on norms and standards, labor conditions, sustainability criteria and transparency requirements.

The current lack of clear communication between connectivity actors is leading to a wasteful duplication of initiatives. The exclusion of civil society from connectivity discussions results in projects that are not designed with the needs of people and communities in mind.

And private businesses must be part of the conversation and decision-making on establishing rules for project preparation and accountability, technical specifications and safety standards.

As underlined by a new Friends of Europe publication, the EU, in cooperation with China, Japan and key Asean countries, should look at three options.

First, it should create a multilateral “Connectivity Code of Conduct” that lays out the rules for engaging in connectivity projects.

While President Xi Jinping responded to critics in April 2019 by promising to multilateralize the BRI, “multilateralization with Chinese characteristics” risks splitting the world into two competing orders. This could create even more friction and confusion. The creation of a “one world, two systems” for connectivity, whether in infrastructure, digital technology, trade and investments — or for dispute settlement and arbitration linked to BRI projects — is not in the global interest.

Second, the EU needs to reinforce and expand the recently established Multilateral Cooperation Center for Development Finance (MCDF), which brings together several key European, Asian and Chinese financial institutions involved in BRI. MCDF already includes eight multilateral financial institutions such as ADB, the Asian Infrastructure Investment Bank, the European Bank for Reconstruction and Development and the European Investment Bank.

And finally, third, an international connectivity forum should be set up to allow for the participation of the private sector and civil society in conversations about connectivity.

This forum should include policymakers, academics and think tankers, along with independent economists, business and civil society representatives. These representatives can share relevant information and best practices on future and ongoing projects, and ensure contracts are awarded on the basis of best value and quality.

The world certainly needs more connectivity. What it does not need is more connectivity confusion.

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Shada Islam is director of Europe and Geopolitics at Friends of Europe, a Brussels-based think tank.