BEIJING • China's massive Belt and Road Initiative (BRI) should go only where it is needed and where the debt it generates can be sustained, International Monetary Fund managing director Christine Lagarde said yesterday.
In brief remarks to nearly 40 world leaders and other high-ranking officials at China's second Belt and Road summit in Beijing, Ms Lagarde said the programme to build ports, railroads and other trade-enhancing infrastructure was having a positive impact on growth in certain countries, but needed to be managed carefully.
She called for a revamped "Belt and Road 2.0" to include increased transparency, an open procurement process with competitive bidding and better risk assessment in project selection.
"History has taught us that, if not managed carefully, infrastructure investments can lead to a problematic increase in debt," Ms Lagarde said in remarks prepared for delivery at the conference.
"I have said before that, to be fully successful, the Belt and Road should go only where it is needed.
"I would add today that it should only go where it is sustainable, in all aspects."
Ms Lagarde said that the Chinese authorities were taking positive steps with a new debt sustainability framework that will be utilised to evaluate projects. The sustainability initiative was announced on Thursday as China seeks to allay concerns that the Belt and Road plan was saddling poor countries with debts they cannot repay.
She also applauded the launch of a green investment principle for Belt and Road projects at the Beijing conference.
While nearly 40 world leaders and scores of finance officials are gathered in Beijing for the second Belt and Road infrastructure summit, the World Bank's new president is not among them.
Mr David Malpass, fresh from a senior Trump administration post at the United States Treasury Department, is instead making his first foreign trip as the World Bank's leader to sub-Saharan Africa to highlight his vision for the bank's poverty reduction and development agenda.
A World Bank spokesman said Mr Malpass will be travelling this weekend to Madagascar, Ethiopia and Mozambique before flying to Egypt and a debt conference in Paris.
His absence coincides with a significant downgrade of the Belt and Road summit by the US as the Trump administration tries to negotiate a deal to resolve trade and intellectual property disputes with China - talks in which Mr Malpass frequently participated.
World Bank chief executive officer Kristalina Georgieva is representing the institution at the summit and had accepted China's invitation before Mr Malpass started at the bank on April 9.