Daily Times

United States passed “Better Utilization Investments Leading to Development (BUILD)” Act 2018. The Act was designed to achieve three important objectives: a) promote private sector to invest in low developed countries, b) provide an alternative to China’s BRI initiative, c) complement USA’s foreign policy, security and national interests. United States International Development Finance Cooperation (USIDFC) was created to materialize the perceived objectives. It is basically merger of existing institutes, organizations or cooperation. Overseas Private Investment Cooperation (OPIC) will be merged into DFC. It will also borrow some staff from USAID. DFC will also have power to bring different programs under its umbrella.

USA is in process to operationalize USIDFC as soon as possible. The salient features of USIDFC are; it will be joint venture of different government agencies and program. Total worth of the initiative would be US$ 60 billion. Private investors and business community will be leading actors. It is exclusive in nature and has been designed to exclude certain countries. It will be accountable to public of USA. The accountability mechanisms will be implemented by independent organizations. Independent accountability of government agency is a new concept in USA.

USIDFC under BUILD Act is an effort by USA strengthening its alliances and trying to reinvigorate its investments. The efforts are more specifically targeted to counter the Belt & Route Initiative’s (BRI). From the very concept, the Act has been designed to compete China at global stage. Therefore, it becomes necessary to compare it with BRI and draw conclusions for Pakistan.

BRI’s vision is categorized in four categories, a) Enhancing policy coordination, b) Trade liberalization, c) Financial integration d) Connectivity including people to people connectivity. These are basic ingredients of existing global order. President Xi explained that vision’s pillars are essential to maintain global order and achieve sustainable development. Further, program has been propagated by China with two very important objective; a) shared prosperity and b) shared future.

BRI is operational for last six years. China has invested US$ 90 billion till to date and trillions of dollars are in plan. Investments are being made in transport and energy infrastructure, which will facilitate private investment. Trade is another beneficiary of BRI. It has increased many folds with the BRI countries and total trade worth for last six years is US$ 6 trillion. It helped to create 244000 jobs among local communities of different partners. China also has created railways linkages with 15 European countries and 50 cities. Further, 126 countries and 29 international organizations have signed agreements under the auspices of BRI.

Good news for Pakistan is that both programs, BRI and USIDFC have been offered to Pakistan. Pakistan had joined BRI and it is one of early members. Pakistan is home to flagship project CPEC. The total committed amount of CPEC is around US$ 61 billion, which is more than total available sources of USIDFC. CPEC has helped Pakistan to overcome some chronic problems like energy and transport infrastructure. Now CPEC is helping to tackle issues of poverty, education and health along with industrialization of country.

Despite such massive engagement China is not asking Pakistan to not look for new partnerships. China is encouraging Pakistan to engage in new partnerships with diversify partners and countries. Many countries and investors are already showing interest to invest in Pakistan. Saudi Arabia, UAE, Qatar, Oman and many others countries are in negotiations with Pakistan. Companies like Microsoft, Volkswagen, Pepsi Co and Coca-Coal are showing interest to invest or to further enhance their investment in Pakistan.

Therefore, there is no doubt that Pakistan will also like to accept the investment from USIDFC. Moreover, Pakistan will take it as complementing investments along with CPEC. However, it will depend on how USA offer it or what would be conditions attached to new investments under BUILD. Present situation and trade war between USA and China will make decision difficult for Pakistan. Further USA policy of containment of China will aggravate situation.

Despite such massive engagement China is not asking Pakistan to not look for new partnerships. China is encouraging Pakistan to engage in new partnerships with diversify partners and countries

However, the current situation also presents an opportunity for Pakistan to play a positive and leading in engaging China and USA like early 1970s. This is a humongous task, it would be really a challenging and ambitious activity. The involvement of two big powers will make it extremely difficult for Pakistan to manage it. But there is no alternative to this, as world is facing numerous challenges. World economic growth is shrinking, and major factor is US-China trade war. In-equality is on rise. Food insecurity started to rise again. Poverty is still here. Demand for energy is increasing. On top of all that Climate Change is threatening the very existence of planet earth. Climate change is not respecting boundaries and no country alone will be able to tackle it.

The only wise strategy would be cooperation among countries and especially between two leading economies of the world. China is already extending hand of friendship and USA also want to cooperate by attaching some strings. That’s give hope and world should try to turn it into opportunity. The first and foremost task would be to remove stumbling blocks and divert attention to building blocks. USA, being present big player should take lead to smoothen the way for cooperation. It can take lead from the wise words of George Washington, “avoid entangling in alliances” and “Why forego the advantages of so peculiar a situation. USA should concentrate on the new opportunities emerging from the BRI and CPEC. The world has moved to global village and partnerships and cooperation are only tools to survive with dignity and honor.

The situation urges Pakistan, to take lead for creating synergies between China and USA. It may seem odd to some people but only Pakistan qualify for this job, as Pakistan has past experience to break a deal between two countries. Therefore, Pakistan should immediately launch backdoor diplomacy. The starting point can be establishment of two working groups. One group should be comprised of investors and business community from China and USA. Group should be tasked to devise a guideline for joint ventures in Pakistan. USA companies should be invited to benefit from the emerging opportunities after the successful implementation of CPEC. The strategy later, can be replicated in other BRI’s partner countries.

Second group should be comprised of diplomates and security personals. This group should be tasked to develop a vision for future engagement to avoid any mishap. It should also have mandate to devise a strategy for mutual respect and sustainability of global order. The composition and work of the group should be kept away from limelight. Pakistan should play role of facilitator like 1970s and should avoid to create any hype.

It would be in the interest of Pakistan, region and global community to break a deal between two big power, USA and China. For Pakistan, the cooperation between China and USA will bring an opportunity to solve its bilateral issues and concentrate on its economic affairs. For region it will pave a way for sustainable development and will help to tackle issues of poverty, food insecurity and climate change. For global community it will help to achieve global agenda “No One Lift Behind” through implementing SDGs with its true spirit.

Lastly, we have to keep in mind that the instinct to create influence for its objectives is disastrous for everyone, as it is rightly said by Henry Morgenthau, Jr , Economic Aggression can have no other offspring than “WAR”. It does not matter who win today, tomorrow’s winner would be different.

The writer is COO Zalmi Foundation