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1. East Asian Cities: Past Development and Onrushing Challenges

Author:
Shahid Yusuf
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The East Asian export-led development model has served as a beacon for decades. For the many urbanized and rapidly urbanizing countries, the East Asian experience with and response to emerging challenges can be equally instructive. High-income East Asian economies are at or approaching peak urbanization. China is likely to catch up within the next three decades. Since the 1950s, urbanization was accelerated by industrialization, which provided a plenitude of jobs directly and indirectly. It generated the resources that helped build urban infrastructure and housing, financed essential services, and created modern, urban livability. However, East Asian cities, like cities in other high- and middle-income countries, face new challenges. Services are displacing manufacturing as growth drivers and providers of jobs; the absorption of digital technologies, urban greening, and control of pollution/carbon emissions is more urgent; climate change is necessitating the upgrading of services and infrastructure to enhance resilience; climate change will also compel a managed withdrawal from some urban locations; and both services and physical facilities must adapt to meet the needs of aging populations. Responding to these challenges calls for strategic long-range planning, technological advances, implementation capacity, and resource mobilization. By 2050, 70 percent of the global population will live in cities. Therefore, how East Asians tackle these challenges can inform and guide policymakers in developed and developing countries alike.
Topic:
Development, Infrastructure, Urbanization, and Urban
Political Geography:
East Asia and Asia

2. Stuck Near Ten Billion: Public-Private Infrastructure Finance in Sub-Saharan Africa

Author:
Nancy Lee and Mauricio Cardenas Gonzalez
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Many stress the critical role of the private sector in filling yawning sub-Saharan Africa (SSA) infrastructure finance gaps, only widened by the pandemic. Our paper looks in detail at financially closed (construction-ready) transactions with private participation in SSA from 2007-2020. Despite the “billions to trillions” vision, we find no sustained upward trends for such transactions in volumes of total finance, multilateral development bank (MDB) finance, private finance, the share or volume of local private finance, participation by international institutional investors, or finance from bilateral development finance institutions (DFIs). External finance sources were larger than local sources, with Chinese DFIs dominant and the US DFI a marginal actor. Among MDBs, the African Development Bank provided the most finance cumulatively. Investment in renewable energy outpaced investment in fossil fuel infrastructure, but MDBs continued to make significant fossil fuel investments. Investment in water and social infrastructure remains about 5 percent of the total. Policy implications include: the urgent need for greater MDB efforts to use their broad toolkits to catalyze more private infrastructure finance, including from local sources and in social sectors; the case for building on the African Development Bank’s advantages; the importance of growing the US Development Finance Corporation’s efforts; and the strong logic for more collaboration among infrastructure finance providers to SSA, including China, with MDBs providing not only finance but also fora for collaboration and support for the policy and institutional reforms that build sustainability and reduce risk for all actors.
Topic:
Infrastructure, Finance, Private Sector, and Public-Private Partnership
Political Geography:
Africa

3. Two Birds, One Budget: Using ODA for Influence and Development in the Indo-Pacific?

Author:
Rachael Calleja, Sam Hughes, and Beata Cichocka
Publication Date:
12-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper explores the UK’s proposed “Indo-Pacific tilt” from a development perspective. In light of recent cuts to the UK’s official development assistance (ODA), we ask how the UK can use scarce development resources in the Indo-Pacific more effectively to capitalise on opportunities to support strategic objectives while ensuring that ODA remains squarely focused on development priorities. Our analysis seeks to understand both how the UK is positioned within the Indo-Pacific, which is an already-crowded development landscape, as well as where the UK’s strategic and developmental priorities in the region might meaningfully overlap. We find that while there are some opportunities for the UK to support both development objectives and strategic interests concurrently in the Indo-Pacific—such as in the provision of regional and global public goods—the countries with the greatest strategic value to the UK are not those where additional ODA could contribute most clearly to poverty reduction. We conclude the paper with six policy recommendations. Among others, we propose that the UK should consider partnering with other like-minded providers to maximise its presence in the region.
Topic:
Development, International Cooperation, Infrastructure, and Influence
Political Geography:
United Kingdom, Europe, and Indo-Pacific

4. Convergence, Development, and Energy-Intensive Infrastructure: Getting Africa to High-Income Status

Author:
Vijaya Ramachandran
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The structural changes in an economy that accompany its growth to high-income status have been predictable in Europe, the United States, and Asia, characterized by declining employment in agriculture and rising levels of urbanization driven by jobs in the modern industrial sector. As agricultural productivity rises, the share of people employed in agriculture declines, and both urbanization and employment in manufacturing increase. Food prices fall relative to wages, causing the share of income spent on food to decline to very low levels. Asian countries have followed a similar path, although at a much faster pace. Africa, however, is different. Despite a high share of the population in urban areas, most African countries have yet to see significant increases in agricultural productivity that might drive industrial growth and jobs. In most African countries, the rising share of urban population has not been matched by increases in agricultural productivity, falling food prices, or the emergence of a viable industrial sector. Available evidence shows that agricultural yields in Africa are low and food is costly, while the share of employment in agriculture remains high. For the process of structural transformation to get underway, African countries must manufacture of fertilizer, develop better methods of water control, improve transportation, and invest in cold storage. Each of these interventions requires significant amounts of energy, including energy from fossil fuels. And they are not replaceable—countries have managed structural transformation in different ways but, to date, none have leapfrogged the process.
Topic:
Agriculture, Development, Energy Policy, and Infrastructure
Political Geography:
Africa

5. Examining World Bank Lending to China: Graduation or Modulation?

Author:
Scott Morris and Gailyn Portelance
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Under the World Bank’s 2018 capital agreement, borrowing countries are expected to gradually reduce their portfolios once a base income threshold—the Graduation Discussion Income (GDI)—is reached. However, the agreement also affirms the case for ongoing lending to these countries. One justification is tied to external value beyond the borrowing country’s borders (global public goods, or GPGs). Another is tied to building capacity within the borrowing country, which can mean a focus on sub-regions where poverty remains high and capacity weak. In this paper, we examine World Bank graduation policies and lending through the lens of China, which maintains a large portfolio of World Bank projects. China currently exceeds the GDI thresholds for IBRD borrowing at the national level, while income inequality within the country leaves many noncoastal provinces below the GDI per capita threshold. Aggregate and provincial-level analysis of World Bank lending in China shows that less than half of China’s portfolio comprises activities clearly linked to GPGs, while a slight majority of projects are based in provinces with per capita income below the GDI threshold. A substantial number of World Bank projects in China focus on climate change mitigation and transportation infrastructure construction, while a smaller number relate to capacity building. Overall, we find evidence that China’s borrowing is broadly consistent with the 2018 principles of institutional capacity strengthening and GPG-related engagement, although significant areas of bank engagement do not appear to fall within the parameters of these principles.
Topic:
Poverty, Infrastructure, World Bank, and Inequality
Political Geography:
China and Asia

6. The Kunming-Vientiane Railway: The Economic, Procurement, Labor, and Safeguards Dimensions of a Chinese Belt and Road Project

Author:
Scott Morris
Publication Date:
05-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The Kunming-Vientiane (K-V) railway, part of the Kunming-Singapore multi-country rail network (or “Pan-Asia Railway”), is an anchor investment of the Chinese government’s Belt and Road initiative (BRI). This case study will assess the rail project along four dimensions: economic implications; procurement arrangements; labor; and environmental and social safeguards. In each of these areas, evidence from the railway project suggests that Chinese policy and practice could be better aligned with the practices of other sources of multilateral and bilateral development finance. Where the project’s standards are broadly aligned, at least in principle, there is nonetheless reason to believe that China’s approach carries heightened risks given the overall scale of financing. These risks hold for China’s global program of official finance, which has made the country the largest source of official credit in the world. In this regard, BRI policymakers should consider a more rigorous set of “best practices” that align Chinese official finance with leading multilateral standards, even if these practices don’t currently characterize many other bilateral lenders. Such an approach would be consistent with the multilateral vision for BRI espoused by Chinese officials and reflected in the framework of the annual Belt and Road Forum for International Cooperation. This study considers what a stronger set of standards would look like in the context of the four areas of focus.
Topic:
Infrastructure, Belt and Road Initiative (BRI), Transportation, and Railways
Political Geography:
China and Asia

7. Chinese Leadership and the Future of BRI: What Key Decisions Lie Ahead?

Author:
Brad Parks
Publication Date:
07-2019
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
It’s 2028. The Belt and Road Initiative (BRI) has been underway for 15 years, but the initial enthusiasm and momentum behind BRI has vanished. Many of the governments that initially joined the initiative have publicly withdrawn or quietly wound down their participation. China’s staunchest allies remain engaged but even they have reservations about the wisdom of the initiative. They are saddled with unproductive public investment projects and struggling to service their debts. Domestic public sentiment towards China has soured, and they have come to view their participation in BRI as more of a political liability than an asset. But they worry about the consequences of alienating their most important patron and creditor. China has also assumed a defensive posture. Lacking the goodwill that it possessed at the beginning of BRI, it is now using inducements and threats to prevent its remaining clients from abandoning the initiative. Western donors and lenders watch from the sidelines with a sense of bemusement. They encouraged China to “multilateralize” BRI by establishing a common set of project appraisal standards, procurement guidelines, fiduciary controls, and social and environmental safeguards that other aid agencies and development banks could support. But Beijing chose to go it alone. It opted not to embrace the use of economic rate-of-return analysis to vet project proposals; resisted efforts to harmonize its environmental, social, and fiduciary safeguards with those used by aid agencies and development banks outside of China; and pushed back on the “Western” suggestion that it modernize its monitoring and evaluation practices. China bet that its fast and flexible approach to infrastructure finance would prove to be so compelling that traditional donors and lenders would eventually jump on the bandwagon and co-finance BRI projects. But it miscalculated. Its model was insufficiently attractive on its merits to enlist the participation and support of the other major players in the bilateral and multilateral development finance market. Nor was it sufficiently appealing to sustain elite and public support in partner countries.
Topic:
Development, International Trade and Finance, Infrastructure, Leadership, and Belt and Road Initiative (BRI)
Political Geography:
China and Asia