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CGD in the News

March 12, 2019

US budget slashes global development funding, stresses burden sharing (Devex)

From the article:

WASHINGTON — For the third consecutive year, the Trump administration’s budget proposes slashing global development funding. It also underscores the need for increased burden sharing and proposes policy changes related to U.S. aid reorganization.

The budget requests $42.7 billion for the foreign affairs budget, including the Department of State and U.S. Agency for International Development. Congress appropriated $56.1 billion in the fiscal year 2019.

It is widely expected that Congress will reject the administration’s proposal when determining its budget — and there were already some signals Monday that might be the case. Ranking member of the House Foreign Affairs Committee Michael McCaul, a Republican from Texas, said Monday in a statement that while he welcomes cutting “waste, fraud and abuse” from programs, “we must be careful that cuts don’t have unintended consequences that cost us more in the medium and long term. This is especially true of impactful cuts to humanitarian and development assistance.”

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A merger between USAID’s Office of U.S. Foreign Disaster Assistance and the Office of Food for Peace has long been in the works, but the budget proposes taking the consolidation a step further by bringing the State Department’s humanitarian assistance work into the new USAID bureau.

All humanitarian assistance would then be funded through a single appropriations account. It would also restructure some of the State Department’s refugee and migrant work and create a leadership position that would be dual-hatted at USAID and State.

Merging the principal humanitarian accounts is technically a very good idea, said Jeremy Konyndyk, a senior policy fellow at the Center for Global Development, who served as the director of OFDA from 2013-2017: “Having a refugee account and a food account and an everything else account does not really reflect how the world works,” he said, adding that it makes it difficult to have coherent humanitarian assistance.

Having a single account will mean that aid is less siloed, both in terms of the type of aid, but also by who is receiving it, and decisions can be made by professionals closest to the crisis rather than by Congressional appropriations, Konyndyk said.

The policy proposal, however, is only “half good,” he said. The decision to move all assistance from State to USAID is one that Konyndyk warned against in a 2017 blog post. It is useful to have refugee expertise and assistance at the State Department with resources tied to it, he said.

“You need a strong partnership between State and USAID. Displacement is an inherently diplomatic and political issue, so State needs both the expertise and the resources at its disposal to be able to respond and influence policy and we’re concerned that the proposal ignores that reality,” said Mercy Corps’ Doherty.

Congress will likely carefully examine the administration’s proposals for reforms, particularly when it comes to humanitarian assistance and refugee and migrant issues, Konyndyk said. The administration will have to work hard to make the case for the changes and convince legislators that it would not further undermine U.S. leadership on refugee and migrant issues, which will be a “tough case to make,” he said.

It will be made more difficult by the fact that the administration still lacks senior people in key positions who would be making that case, Konyndyk said.

The budget also reiterates a commitment to further reform USAID and focus on “self-reliance” by prioritizing private sector-led growth, domestic resource mobilization, and economic and governance reforms. It highlighted the Women’s Global Development and Prosperity Initiative as the type of “responsible spending” the administration wants to achieve and touted its “cohesive whole-of-government approach,” rigorous metrics and leveraging of partnerships.

Another change proposed in the budget is that the U.S. African Development Foundation and the Inter-American Foundation would cease to be independent organizations and will become part of a new small grants office at USAID. The key to such a move would be ensuring that the unique capabilities of the agencies — they provide direct support to organizations and local civil society in the developing world — would not be lost in the process and the U.S. doesn’t have a good track record of doing that, Konyndyk said.

 

March 12, 2019

China’s Tab at World Bank May Get Squeezed Under Trump’s Nominee (Bloomberg)

From the article:

In the summer of 1981, a poor, technologically backward country looking to move up in the world got its first loan from the World Bank. China borrowed $200 million to modernize its universities so they could churn out more scientists and engineers—a big step for a nation whose average worker earned less in a year than most Americans did in a week.

More than three decades later, China is the world’s No. 2 economy, with more than $3 trillion in foreign-currency reserves and development banks of its own that lend around the world. It’s also one of the World Bank’s biggest borrowers. But maybe not for long.

China’s huge trade surplus with the U.S., along with its plans to muscle into such areas as artificial intelligence, has raised hackles in Washington. President Donald Trump tends to talk about China in zero-sum terms: Its rise is a threat to America. Curtailing World Bank lending to China would fit with the administration’s efforts to contain Beijing’s economic power.

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As part of a deal that paved the way for a $13 billion capital increase from members last year, the World Bank agreed to curb lending to “upper-middle-income” countries. Nations with per capita incomes above roughly $7,000 are supposed to start the process of “graduating.” If they still get loans, it should be to finance “global public goods” that markets can’t provide, according to the plan. The idea is that World Bank capital could be harnessed to fight problems that transcend borders, such as global warming.

Yet only 38 percent of World Bank loans to China went to public goods such as pollution control in the last three years, according to a new report by Scott Morris and Gailyn Portelance of the Center for Global Development. The rest went to such areas as transportation and agriculture that critics argue China could easily finance on its own.

World Bank loans to China are already falling—to $1.8 billion in the year through June 30, from $2.4 billion the previous year. Under Malpass, there could be a further squeeze. Plans for the bank to invest alongside China in some Belt and Road projects may also be shelved. Still, with other nations pushing back on the bank’s board and environmental questions rapidly rising on the list of global concerns, China’s graduation could be gradual.

But Morris says there are downsides to forcing China to quit cold turkey, including the risk that the bank will be worse-equipped to tackle the big global problems its members want it to target. “China is the world's largest polluter,” he says.

March 11, 2019

The U.S. Supreme Court Sent a Wake-up Call to Development Banks. Will They Listen? (World Politics Review)

From the article:

The shallow waters of the Gulf of Kutch, an inlet of the Arabian Sea along the northwestern coast of India, are ideal for fishing, with coral reefs and mangrove forests that provide breeding grounds for a diverse array of marine life. On the gulf’s northern coast, near the town of Mundra, the gently sloping seabed and calm tides make it easy to catch local delicacies like prawns, pomfret and a type of lizardfish known colloquially as “Bombay duck.” 

The Waghers, a Muslim minority group, have fished these waters for generations. They maintain permanent inland villages, but from September until May, many Waghers erect temporary settlements along the coast. From there, they venture out to fish in small boats and on foot, and their catch is dried, processed and sold to local traders. “It is their skill with using nets that is believed to give the Waghers their name,” Bangalore-based author Srinath Perur wrote in 2016. It derives, he explained, “from the exclamation wah and gher, meaning ‘well laid out’ or ‘well surrounded’ in Kutchi,” which is widely spoken in that region of Gujarat state. 

In recent decades, this centuries-old way of life has been increasingly threatened by industrial development projects along the coast. These include the Tata Mundra Ultra Mega Power Project, a gigantic, 4,150-megawatt coal-fired power plant that was financed in part with a $450 million loan from the International Finance Corporation, or IFC, an arm of the World Bank. Since reaching full generation capacity in 2013, the Tata Mundra plant has provided power to 16 million people in five states. Unfortunately, it has also created a host of problems for the Waghers, who complain that discharges of hot water from the plant’s outfall channel have altered the nearby marine habitat and reduced fish stocks. The groundwater is no longer fit to drink. Coal dust and ash from the plant sickens the villagers and contaminates fish that have been laid out to dry. “The joy has gone away,” Budha Ismail Jam, a local Wagher fisherman who lives near the plant, told The Nation magazine last year.

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The IFC argued that international development banks should receive absolute immunity based on the IOIA, partly because their activities are inherently commercial, so applying restrictive immunity would subject them to an onslaught of foreign-plaintiff litigation and divert resources from their important missions. That was also the primary concern of eight former secretaries of the treasury and secretaries of state, who filed an amicus brief in support of the IFC. 

But the court found those worries to be exaggerated, noting that in reality, many international organizations, including the United Nations and the International Monetary Fund, specify absolute immunity from any kind of judicial proceedings in their charters. The IFC does not, but the court argued that “it is not clear that the lending activity of all development banks qualifies as commercial activity.” Even if it does, potential plaintiffs must meet other standards laid out in the Foreign Sovereign Immunities Act, including that the activity has a “sufficient nexus to the United States.” Development experts and international legal scholars agree that the IFC’s case was unduly alarmist. “This ruling has opened the door a little bit,” says Vijaya Ramachandran, a senior fellow at the Center for Global Development. But, she adds, “we don’t really know whether this is going to lead to a flood of lawsuits.”

A key indicator for other prospective plaintiffs will be the outcome of the Tata Mundra case, which will now go back to lower courts for further litigation. Whether courts agree that a loan to the Tata Mundra Ultra Mega Power Plant project has “sufficient nexus to the United States” is unclear, but lawyers for Earthrights International, the advocacy group that represented the Indian plaintiffs, believe they have a good chance of success. At least one other case, involving farmers in Honduras who say that an IFC-supported company used death squads to terrorize them and dispossess them of their land, is likely to move forward as a result of last month’s ruling. 

While the legal uncertainties are being worked out, observers like Ramachandran say that the IFC and other lenders should take this case as a wake-up call to completely revamp their accountability mechanisms so that they become binding in similar cases going forward. “That currently doesn’t exist, and I think that is the reason the IFC is in this mess,” she says. In practice, that would mean creating an internal ombudsman that can force project management personnel to take corrective actions instead of merely issuing reports.

A strengthened internal accountability mechanism would provide an easier avenue to redress grievances by adversely affected communities, many of whom do not have the resources to pursue legal action in the U.S. But Ramachandran stresses that it is also in the interest of the IFC, which does not want to be in the position of frequently litigating cases in U.S. courts. “Given this ruling, they are probably thinking about it,” she says. “The organization wants to get this right, so I do think they will undertake some steps to carry out reforms.”

 

March 11, 2019

India's Poorly Performing States need a Federal Takeover (OZY)

From the article:

India’s schooling system is notoriously unequal, with wealthy private schools offering horse-riding classes often sitting near crumbling public schools. But ask any Indian parent to pick between public schools run by the federal government and those managed by states, and you’ll likely hear this answer: “the so-called central schools, please.”

Welcome to an inconvenient truth about Indian democracy. Decentralization of power is, without a doubt, essential for deepening the roots of democracy. Indian elections, from the national level down to the villages, mean the world’s largest democracy is also among its most robust, and an example for other postcolonial nations. But what if education and health standards in some states are consistently much poorer than in most union territories (UTs) — seven federally governed regions spread out across India? In those cases, it’s time for the central government to step in.

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Why are the UTs outperforming states in education and health?

First, the central government simply has more funds at its disposal than any state. And successive federal governments have focused those financial resources on building top-notch educational and health institutions in the major union territories, especially Delhi, Chandigarh and Puducherry, according to Rama Baru, a professor at the Centre of Social Medicine and Community Health at New Delhi’s Jawaharlal Nehru University (JNU).

Officials in charge of implementing policies in many states also typically face greater political interference than their counterparts managing federal education and health programs, experts say. Because states run programs using a combination of some of their own funds and the rest from the federal government, officials in states often receive conflicting instructions, complicating their work. “The UTs have a big advantage because there is just one set of instructions to be followed,” says Anit Mukherjee, a policy fellow at the Center for Global Development in Washington, D.C.

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But there are examples from the recent past, says Mukherjee, where the central government has taken greater control of key social programs without leaving state governments feeling threatened. Under the Sarva Shiksha Abhiyan, India’s mega education-for-all initiative that has helped dramatically improve school attendance this century, the central government identified 121 particularly troubled districts across the country and pumped in additional money and resources — in exchange for greater control over policy implementation. The federal government has driven India’s HIV/AIDs prevention program. “We were clear that, given the sensitivities [condoms and sex are taboo subjects in many parts of the country], many states may not take it up,” recalls Mukherjee. And at the very least, says Tilak, state institutions should pick up the stricter governance and quality norms that have made their central counterparts tick.

India owes that to its citizens.

 

March 11, 2019

Pregnant Women & Vaccines Against Emerging Epidemic Threats (Johns Hopkins University Berman Institute of Bioethics)

Ethics Guidance for Preparedness, Research, and Response

Presenter: Dr. Carleigh Krubiner, Policy Fellow, Center for Global Development & Associate Faculty, Johns Hopkins Berman Institute of Bioethics

Moderator: Joseph Ali - Johns Hopkins Berman Institute of Bioethics and Johns Hopkins Bloomberg School of Public Health

Summary: The Johns Hopkins Fogarty African Bioethics Training Program, the Addis Ababa University, and the University of Zambia invite you to join a one-hour research ethics webinar. Dr. Carleigh Krubiner will present on the ethics of including pregnant women's health needs in the research agenda for Zika and other public health emergencies. Dr. Krubiner will also discuss her work on the ethical guidance to ensure that the development and deployment of vaccines against emerging pathogens fairly include the interests of pregnant women and their offspring.

Click here to watch the webinar!

March 11, 2019

Blame game over aid leaves Syrian refugees stranded in desert ‘death’ camp (Public Radio International)

From the article:

Stranded in the remote deserts of Syria near the Jordanian border lies Rukban Camp — an unofficial tent city of over 40,000 displaced people who fled from war in Syria. What began as an informal settlement in 2014 evolved over time into a complex camp with no running water, regular food supplies or access to medical care. 

“I can't explain to you how bad the situation is,” Rukban resident Muhammad A’kil, 27, told The World over a smuggled satellite phone that connects to the internet for about one hour every few days. A’kil, originally from Homs, Syria, has been in limbo at the camp for four years.  

“Don’t call it Rukban Camp; it's a death camp,” A’kil said. 

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Rukban stands out as another bitter example of how delivering humanitarian aid can often get hampered by politics. 

“When aid becomes a proxy for a political struggle, it's just much, much harder to get it to the communities who need it, because one side or the other will see it as a threat,” said Jeremy Konyndyk, former director of foreign disaster assistance programs for USAID in Syria during the Obama administration.

 

March 11, 2019

Budget calls for deep cuts to foreign aid, especially for refugees and in humanitarian crises (Washington Post)

From the article:

The Trump administration is proposing slashing the budget for the State Department and the United States Agency for International Development (USAID) by almost 24 percent, with particularly steep cuts to humanitarian aid, refugee assistance and global health programs.

The proposed 2020 budget would take three funds that collectively are funded by more than $9 billion and consolidate them into an International Humanitarian Assistance fund that would be allotted about $6 billion, a one-third drop. In addition, the administration proposes cutting global health programs from $8.7 billion this year to $6.3 billion next year, a cut of almost 28 percent.

The White House budget request reflects the priorities of the administration, which has not been successful at getting its proposals past a Congress in which foreign spending enjoys wide bipartisan support. The administration submitted even deeper drops in foreign spending during each of the previous two years, and Congress largely restored them.

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Development aid groups have long recommended consolidating accounts to streamline responses to humanitarian disasters. Keeping them separate and narrowly focused can hold up assistance.

“Putting three accounts into a single account would be a good idea, if it’s not used to cover cuts in collective resources by a third,” said Jeremy Konyndyk, a policy fellow at the Center for Global Development.

 

March 7, 2019

USAID tried — and failed — to convince Saudi Arabia not to strike civilian targets in Yemen (Devex)

From the article:

WASHINGTON — At the start of the conflict in Yemen, which has now devolved into the world’s worst humanitarian crisis, U.S. officials worked behind closed doors to convince Saudi Arabia’s leaders not to target humanitarian and civilian sites for airstrikes.

Those efforts largely failed due to a lack of high-level political will within the Saudi government, according to two former U.S. officials who testified on Capitol Hill Wednesday.

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The U.S. Agency for International Development was also involved in the process — particularly in terms of identifying areas and sites that the Saudis should not target with their airstrikes.

USAID put together a list of humanitarian sites such as NGO offices and warehouses — “things that, if you looked at them from the air, you might not be aware it’s a humanitarian facility. Whereas we assume you would know what a school looks like, what a hospital looks like, and so on, and not hit those things,” said Jeremy Konyndyk, a senior policy fellow at the Center for Global Development who directed USAID’s office of foreign disaster assistance during the Obama administration.

“What we found was that the Saudis tended to treat anything not on the no-strike list as fair game. So then we expanded the list, and we began naming specific categories of sites, including specific road routes that were critical to the humanitarian effort,” Konyndyk said.

In 2018, Saudi airstrikes targeted and destroyed bridges along the main road from the port of Hodeida to Yemen’s capital city, Sanaa. That road served as the principal transport route for humanitarian and commercial food shipments into the country.

“They struck that despite us having specifically told them through that process not to,” Konyndyk said.

Radhya Al-Mutawakel, a Yemeni human rights activist who leads the organization Mwatana for Human Rights, pointed out that when Saudi attacks produce mass civilian casualties, there is often not even a military target nearby that might explain the collateral damage.

“People themselves were asking why we were targeted,” Al-Mutawakel said. “That’s why it’s not a matter of training, it’s a matter of accountability. They don’t care. If they care, they can just make it much better,” she said.

The United States, as a key ally of Saudi Arabia and major arms supplier to the country, has both culpability and leverage in a conflict that has left 80 percent of Yemen’s population in need of humanitarian assistance, Konyndyk told lawmakers.

Applying that leverage will require more concerted effort at the highest levels of government.

“When the Saudis are doing something we don’t want them to do … asking them nicely while continuing to sell them arms has not yielded much progress,” Konyndyk said. “The only times we have seen progress has been when, at a very high level up to and including, at times, the president himself, when they put that request forward and make clear that it will have consequences for the U.S. bilateral relationship if it is ignored, then we see movement.”

 

March 7, 2019

El Salvador Kills Women as the U.S. Shrugs (Foreign Policy)

From the article:

SAN SALVADOR, El Salvador—When police finally found Joselyn Milena Abarca, her body had been cut up into seven pieces and dumped across San Salvador. The 26-year-old had been a psychology major in college and a rising star in her job. She recently bought a house and a car.

But her boyfriend, Rónald Urbina, treated her like a possession. She had to ask for permission to cut her hair; he had previously tried to suffocate her to death. Rónald was subsequently arrested and charged with murdering Joselyn. (He denies all charges.)

His increasingly violent and controlling behavior, however, was allowed to fester for the 10 years they were together without any legal repercussions. That’s sadly common in a country that often dismisses crimes against women. Homicides of women in El Salvador have more than doubled since 2013 to 468 in 2017, according to the Institute of Forensic Medicine. The violence is destabilizing the country and is considered a major push factor in driving up migration to the United States. Women currently make up 27 percent of all migrants apprehended at the U.S.-Mexico border, according to U.S. Customs and Border Protection statistics.

But while Salvadoran women’s rights advocates are trying to curb the violence and tackle the misogyny, the United States is undercutting those very efforts. The Trump administration is pulling funding from programs that support women in El Salvador and focusing funding and energy on a border wall to keep them and others out. Women seeking asylum based on domestic violence claims are now being rejected. In 2018, the United States committed only $600,000 to anti-violence programs, which was 1 percent of its aid budget to El Salvador.

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Activists say one thing is clear: Slashing foreign assistance is detrimental to the work being done. “The U.S. should increase aid to the region for community-based programs that have a track record of successfully reducing crime and violence,” said Cindy Huang, the co-director of the Center for Global Development’s program on migration, displacement, and humanitarian policy. “Unlike billions for a wall, aid is a smart and cost-effective investment that will improve the security of Central Americans and the broader region.”

Some nonprofits use U.S. funding to do work specifically intended to keep people from migrating. Glasswing International’s Club for Returnees, funded through private donations and USAID, works with young women who have returned from Mexico or the United States. The organization provides trauma support, financial assistance, and referral care support. “We’ve seen real transformations take place,” de Sola said. “These women and girls are already resilient. They’re surviving every day—we just develop their skills. The more you provide them with opportunity to thrive in this context, the better they do.” Glasswing also runs clubs to equip young girls with the skills they need to navigate the daily risks they face. After one year of involvement in these clubs, nine in 10 girls could recognize signs of gender-based violence, including behaviors previously normalized, like pushing and yelling, and knew how to report it.

While there is no quick answer to El Salvador’s problem with violence against women, the United States can make a big difference by supporting anti-violence programs, Huang said, both through development assistance and diplomatic outreach. “So many threats today are transnational, from gangs to human trafficking,” she said. “They require collaboration and joint investment with other government, civil society, and private sector partners. Unfortunately, the Trump administration and other governments are dismissing lessons from the past.”

Efforts to improve violence in El Salvador won’t just help victims, but survivors, too. Joselyn’s mother, Yesenia Juárez, is still grieving her daughter’s death, but she is also spending her time creating a foundation. Set up in memory of Joselyn, the aim is to help prevent further female homicides. From schools to public institutions, she wants to ensure help is available and accessible to any Salvadoran women who need it. “I need to talk about this pain,” she said. “I have to make sure this doesn’t happen again.”

 

March 6, 2019

Demystifying Debt Along China’s New Silk Road (The Diplomat)

From the article:

China has one of the biggest global development footprints in the world. The only country with bigger official international finance flows is the United States.

Still, Washington spent over four times more than Beijing on Official Development Assistance. The lion’s share of China’s official money flows falls under Other Official Finance and is mostly spent on loans for projects in infrastructure, energy, and communications.

These projects are part of the Belt and Road Initiative (BRI), China’s main vehicle for spurring development both at home and abroad. Through infrastructure investments, Beijing aims to better connect China to other parts in the world and to increase trade along the road. Five years after President Xi Jinping announced his plans for the BRI, China has spent about $25 billion on related infrastructure projects.

But to what extent do recipient countries profit from these Chinese investments? At least eight countries are at particular risk of debt distress because of project lending associated with China’s BRI, the Center for Global Development (CGD) reported in March 2018. Critics fear that China is using the loans to create dependency and gain political influence.

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The China Model of Lending

Chinese money fills a gap in international infrastructure funding. So why is it causing debt and debate? For one thing, most BRI funding is based on state-to-state structures. This can create challenges for sovereign debt, with possible implications for bilateral ties.

Usually, loans are guided by standards determined by multilateral institutions like the World Bank, the International Monetary Fund, or multilateral mechanisms like the Paris Club. But China is not a member of the Paris Club, so it doesn’t need to inform members on its credit activities and it doesn’t have to follow any standards.

“Without a guiding multilateral or other framework to define China’s approach to debt sustainability problems, we only have anecdotal evidence of ad hoc actions taken by China as the basis for characterizing the country’s policy approach,” the CDG report concludes.

Instead of universal standards, “China generally follows local laws when it lends for development projects,” Scott Morris explains. Morris is one of the authors of the CDG report on debt among BRI countries. “This can mean high standards when local laws are strong and very low standards when laws are weak.”

The difference with loans from institutions like the World Bank, is that these institutions assess local laws and will impose their own protections if local laws are too weak. China leaves this responsibility with partner-governments and “follows whatever local laws say,” Morris says.

“China is also not as sensitive to debt sustainability issues, such as that lending terms are not strictly aligned with the country’s debt risks,” he adds. To what extend recipient countries benefit from Beijing’s loans therefore strongly depends on their own standards.

Price for Beijing

The debt problems among the BRI countries also come at a price for China. Between 2000 and 2014, Beijing spent $13 billion on actions relating to debt. With debt rescheduling it mitigates risks by extending the terms on loans.

China also carries significant risk itself when lenders default on their loans, according to Morris. Although “debt is essential for infrastructure investment,” Morris says, “large amounts of debt carry significant risks and need to be carefully managed by lenders and borrowers.”

Most importantly, the international critique is also creating a “huge problem in China,” Rudyak says. “The Chinese general public is highly critical of Chinese aid and Chinese loans.” China is not getting its money back and the country is being criticized by the international community. So why, an increasing number of Chinese ask, doesn’t Beijing spend this money on the poor at home?

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Intentions and Politics

The Bretton Woods institutions “are a mirror of post-1945 and the world has changed,” Rudyak says. “But now of course the problem with the reform is that many of the countries that want to have a bigger say are not liberal democracies.”

Morris and his co-authors argue that Beijing should multilateralize the BRI in order to streamline China’s increasing efforts in international development funding and minimize debt problems. “China has valued its engagement with the multilateral institutions and as a result it’s an influential relationship. I think these institutions stand the greatest chance of convincing and helping China to improve its project and lending standards,” according to Morris.

China’s recent step to open a joint Capacity Development Center with the IMF, to train experts on policy and economics so countries can better decide whether to take up loans, is therefore an encouraging move.

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