US officials say they don't need to compete with China's Belt and Road

China held a summit recently to mark the 10th anniversary of the Belt and Road Initiative, its $1 trillion vision to leave a vast infrastructure footprint across the world. But United States officials say their government cannot compete with Beijing dollar for dollar — nor do they want to or need to. “When we look at the number that China is putting into Belt and Road, and then we look at the USAID budget, or we look at the State Department budget and say, ‘Well, you guys are not keeping up,’ I just think that's the wrong measurement,” said Richard Verma, deputy secretary for management and resources at the State Department. “Because when I look at what our private sector can deploy, what our NGOs deploy, what our universities, our know-how, and innovation bring to the table, it surpasses Belt and Road by a dramatic factor” — both in capabilities and money, he said. Verma spoke at the Meridian International Center’s Global Leadership Summit in Washington, D.C. last Friday. He was joined by Scott Nathan, CEO of the U.S. Development Finance Corporation, for a panel on “Advancing American Competitiveness While Strengthening Global Relationships.” Verma praised DFC for its ability to mobilize private sector capital, which he said “dwarfs” what Belt and Road, which is entirely state-funded, can do. “We found a role for the U.S. government that stimulates that kind of investment … but that doesn't try to go substitute dollar for dollar some massive state economy.” Scott echoed the point, saying “There's no way we can match dollar for dollar, but we don't even want to because the way that [China is] approaching this is not great for the recipients of that assistance.” He said DFC offers “an alternative to what our more authoritarian strategic competitors are offering.” “And what I find when I travel is leaders around the world are hungering for that kind of alternative. They of course aren’t going to say no to money that's being sort of helicoptered to them. But they also realize there are strings attached, that maybe the promises aren't always met, the quality doesn't match what they need, maybe even the whole project is not what they need.” Among the critiques lobbed at BRI is that the projects lack financial transparency, don’t adhere to environmental standards, bring in Chinese workers, thus not benefiting the local labor pool, and saddle countries with onerous debt. Scott cited the oft-used example of the BRI-financed Hambantota port in Sri Lanka as a cautionary tale about China’s debt trap diplomacy, although whether Beijing really “seized” the port after Sri Linka couldn’t pay its debt in 2017 is more nuanced than many U.S. policymakers make it out to be. Still, Scott said U.S. investment in Sri Lanka is a study in contrasts. “We're financing the development of a container terminal on the other side of that port, the western container terminal in Colombo, Sri Lanka, but we're funding an Indian company to do that. So it's an example of U.S. money along with colleagues in the India [Export-Import] bank funding an Indian company to do something that is strategically important for India, our partner, it's developmentally important for Sri Lanka, and it has global implications for free trade and lack of economic coercion,” Scott explained. But the fact that the U.S. is funding that terminal — and a boatload of other new infrastructure projects around the world — is at least a tacit acknowledgement that China’s early focus on infrastructure is precisely what low- and middle-income countries wanted and needed. “Despite BRI’s many flaws, it is important to note that it is addressing a real issue, namely the urgent and unmet need for infrastructure investment,” wrote David Sacks in a recent Council on Foreign Relations blog post. “The World Bank has identified an $18 trillion global infrastructure gap. As traditional lenders shifted their focus away from infrastructure, China was willing to step into this void, and as a result is now the world’s largest official creditor.” And the U.S. found itself playing catch-up with initiatives meant to counter BRI, such as the Partnership for Global Infrastructure and Investment, or PGII, which aims to raise $600 billion by 2027 among the Group of Seven top economies. “This isn't aid or charity," U.S. President Joe Biden stressed at the G7 summit in Germany in June last year. "It's an investment that will deliver returns for everyone, including the American people and the people of all our nations." And that’s part of the new diplomatic playbook — selling development as a win-win to the American public, which can also benefit from job creation, increased security, and the like. Verma, who previously served as the U.S. ambassador to India, recalled that “when I used to be invited to go to factory openings in India, whether it was for Ford, or GM, or GE, or Apple, the first question I would ask my team is, ‘Tell me the story as to why this is good in the United States.” “I think we have to be able to tell those stories, and that helps Americans have greater confidence in the jobs that we're doing around the world.”