Developing economies, especially emerging market economies (EMEs), face complex challenges in investing for growth, including building infrastructure. Many developing economies are trying to sustain the growth catch-up process, and manage disruptions related to transition to the “new economy”, as well as headwinds from protectionist tendencies in trade and technology. Investing for the long term — including in infrastructure — has therefore become a critical issue. In this context, the Belt and Road Initiative (BRI) has captured the imagination of the world. An ambitious initiative involving more than 70 countries collaborating through investments in infrastructure, it seeks to improve connectivity for cross-border trade and investment, and generate economic benefits for the countries involved. It seeks to address large infrastructure gaps and build capacities for growth. And it helps countries unable to get affordable financing for plugging savings-investment shortfalls. However, the BRI has drawn criticisms over China’s underlying geopolitical motives, and BRI partner countries have been warned of the risk of becoming heavily indebted or getting locked into business platforms created by China. This paper aims to contribute to the policy debate over the BRI from an ASEAN perspective. It analyzes the reasons for the persistent infrastructure investment gaps in EMEs from an ASEAN perspective; assesses whether BRI is more of a development opportunity or a debt trap; outlines a framework to address the risks and concerns in order to unlock the potential benefits; and uses case studies both outside of and within the ASEAN region to distil key themes needing policy attention.
