**3. Review on Regional Initiatives for Infrastructure Development**

#### *3.1. Initiatives for Quality Infrastructure*

The region is arguably very fortunate to have different stakeholders supporting infrastructure improvement in a manner that bridges the missing links in the wider ASEAN region. However, quality is far more critical than quantity if the region is to develop sustainably. The region and particularly ASEAN, therefore, should focus on key development partners that promote long-term development sustainability, especially those that promote quality infrastructure, build responsible human resources, and bring new knowledge and innovation to the region. Some of the key players driving quality infrastructure in Southeast Asia are briefly discussed below.

## 3.1.1. G20 Principles for Quality Infrastructure Investment

Japan has been pioneering and promoting quality infrastructure for many years to empower Asia as a growth center to drive the global economy. Most importantly, at the G20 in Osaka in June 2019, Japan successfully launched an initiative, known as the G20 Principles for Quality Infrastructure Investment, as a key to promoting investment for sustainable development. According to the Ministry of Finance, Japan [6], the principles took into account many aspects of sustainability to ensure that quality infrastructure is in harmony with local environments, communities, and people's livelihoods through generating local employment and facilitating technology transfer. So far, Japan has committed USD 110 billion for quality infrastructure in Asia from 2015 to 2020 [7]. Such a commitment will accelerate financial resource mobilization into the region from private companies around the globe. This is in line with Japan's global commitment to promote high-quality infrastructure investment to address sustainable economic growth and reduce poverty and disparity.

Japan's promotion of quality infrastructure in Southeast Asia can be seen in the country's efforts to enhance ASEAN's connectivity through core land and maritime corridors and soft infrastructure development. The land corridors are high-quality hard infrastructure developments. They connect the South China Sea and the Indian Ocean; develop

the Southern Economic Corridor that connects Ho Chi Minh City, Phnom Penh, Bangkok, and Dawei; and establish the East–West Economic Corridor (EWEC) that extends from Da Nang to Mawlamyaing in Myanmar as a trading center and seaport, connecting Southeast Asia to India and beyond. Another hard infrastructure development is the Maritime Economic Corridor, which consolidates connectivity through the development of port and port-associated industries as well as energy and information and communication technology networks, in major cities. This allows the Mekong Subregion to connect to Brunei Darussalam, Indonesia, Malaysia, the Philippines, and Singapore, thus enhancing connectivity across ASEAN.

## 3.1.2. Belt and Road Initiative

In recent years, China has also invested enormously in Asian infrastructure through its Belt and Road Initiative (BRI). The BRI is a major Chinese strategy aiming to push China's economic links to Southeast Asia, South Asia, Central Asia, Pacific Oceania, Africa, and the Baltic region (Central and Eastern Europe) through various infrastructure and development projects [8]. The BRI has been officially renamed several times since 2013 when Chinese President Xi Jinping announced the policy. It was previously called One Belt, One Road; the Silk Road Economic Belt; and the 21st-Century Maritime Silk Road. The policy was more fully articulated in 2015 as a vision statement, and numerous supporting policy documents have since been produced to support the implementation of the vision statement.

The BRI is expected to involve over USD 1 trillion in investments, largely in infrastructure development, for ports, roads, railways, and airports, as well as power plants and telecommunications networks [9]. Financing sources will include those typical of Chinese overseas investments, such as Chinese banks (commercial and policy), bonds, state-owned enterprises, private Chinese equity, private/public partnerships, the Asian Infrastructure Investment Bank, and others. However, it is expected that Chinese banks will continue to be the main source of financing for Chinese overseas projects, including those along BRI routes. Numerous projects have been proposed or are already in development. According to data from the Ministry of Commerce, China [10], from January to August 2016, Chinese companies signed almost 4000 project contracts in 61 countries. The value of these projects amounted close to USD 70 billion (Data on BRI investments are known to vary, particularly since it is unclear if existing projects are retroactively categorized by the Chinese government as BRI investments. This figure from the Ministry of Commerce is considered official).

There are growing concerns from recent experiences of BRI megaprojects that have come under a host of criticism. There is fear that the BRI could be a *debt trap* due to the high interest rates associated with some of the BRI's projects, as in the notorious case of Sri Lanka's Hambantota Port [11–13]. There are concerns that projects under the BRI are not transparent and that the BRI itself will be damaging to the environment [14] because it does not offer explicit guidelines on how Chinese investors should regard environmental protection or civil society [15]. There is also fear that the BRI is modern *Chinese colonialism*, often taking as an example the Chinese presence in Africa, and connecting to the longstanding *yellow peril* phobia (see, for example, [16,17]). There is another fear that, despite its effectiveness in relation to construction speed [13], the projects under the BRI are not sustainable but are the cause of environmental and social issues [9]. China's official responses have been mostly on the defensive, trying to delink the BRI from geopolitical or hegemonic ambitions, arguing that BRI projects 'benefit the local population' and are opportunities for 'shared development' (see, for example, [18]).

The BRI is considered as a second wave of Chinese overseas investment and should be seen as a renewed version of the Chinese policy, also known as China's 'Go Global' strategy [15]. This policy was the first to call on Chinese enterprises and industries to 'go out' and invest abroad. It is also seen as the key driver to advance China's interests overseas, and demonstrates its growing influence as a rule-shaper in the economic governance of the region and beyond [8], something that countries in the Mekong Subregion need to deal with

carefully. However, if the BRI is to be successful, the Principles for Quality Infrastructure Investment initiative will need to be considered in all infrastructure investments, and local communities developing BRI projects will have to play an active role. In addition, host-country stakeholders will need to improve the quality of their governance systems.
