U.S. and India, are expected to have discussed the Blue Dot Network, a proposal that will certify infrastructure and development projects, during Trump’s maiden visit to India.
Observers have referred to the proposal as a means of countering China’s Belt and Road Initiative (BRI)
What is the Blue Dot Network ?
- Led by the US’s International Development Finance Corporation (DFC)
- The Blue Dot network was jointly launched by the US, Japan (Japanese Bank for International Cooperation) and Australia (Department of Foreign Affairs and Trade)
- The BDN was formally announced on 4th November, 2019 at the Indo-Pacific Business Forum in Bangkok, Thailand on sidelines of the 35th ASEAN Summit.
- It is meant to be a multi-stakeholder initiative that aims to bring governments, the private sector and civil societytogether to promote “high quality, trusted standards for global infrastructure development”.
- infrastructure projects will be vetted and approved by the network depending on standards, as per which, the projects should meet certain global infrastructure principles.The projects that are approved will get a “Blue Dot”, thereby setting universal standards of excellence, which will attract private capital to projects in developing and emerging economies
- he Blue Dot network is like a “Michelin Guide”, which rates restaurants around the world with stars for excellence, for infrastructure projects.
- From the US’s point of view, the Indo-Pacific region, which stretches from India’s west coast to the west coast of the US, is the most economically dynamic and populous part of the world.
Is it a counter to China’s BRI?
- While Blue Dot may be seen as a counter to BRI, it will need a lot of work for two reasons.
- First, there is a fundamental difference between BRI and Blue Dot — while the former involves direct financing, giving countries in need immediate short-term relief, the latter is not a direct financing initiative and therefore may not be what some developing countries need.
- Blue Dot will require coordination among multiple stakeholders when it comes to grading projects. Given the past experience of Quad, the countries involved in it are still struggling to put a viable bloc. Therefore, it remains to be seen how Blue Dot fares in the long run.(Quad is an informal strategic dialogue between the US, Japan, Australia and India)
- Under BRI, China’s government and state-owned enterprises finance international projects by providing logistical support — from concrete and steel to workers and cash. This approach, however, has been labelled by some experts as “debt-trap diplomacy”.
How can India benefit from the Blue Dot Network ?
- India itself has been struggling to complete its own bits of the Asian highway programme that would link its Northeast with Myanmar and Thailand, even as it finds it tough to compete with China in Africa with smaller road, port and railway projects.
- India’s problem is not just a funds crunch that the Americans and Japanese could help solve, but also a capacity issue where its builders and railwaymen have as yet just not been able to compete with China’s efficiency and huge construction capacity. The authorities should take steps to address these issues.