New Delhi: A key US official on Tuesday briefed officials in India’s finance and external affairs ministries on key provisions of the newly passed American Build Act which seeks to make available more resources to the US government to counter China’s ambitious Belt and Road Initiative (BRI).
David Bohigian, executive vice president of the Overseas Private Investment Corporation (OPIC) concluded his five-day visit to India on Tuesday with meetings at India’s finance and foreign ministries outlining significant features of the new Act signed into law by US President Donald Trump on Friday.
“One message that we have is that the US development finance institution now has expanded capital” totalling $60 billion, up from the earlier $23 billion available to it, Bohigian told reporters in New Delhi. “We will also be able to invest in equity for the first time,” he said.
At a conference on the US Indo-Pacific strategy in Washington in July, US Secretary of State Mike Pompeo announced $113 million in new technology, energy and infrastructure initiatives in emerging Asia—a sum analysts had then described as “underwhelming” given that China had announced plans to invest $126 billion in a bid to build a network of land and sea links with South-East Asia, Central Asia, the Middle East, Europe and Africa. Defending the US move, American officials had then said that the US strategy does not aim to compete directly with China’s BRI, but rather to offer a more sustainable alternative by encouraging private-sector investment.
This is against the backdrop of the Chinese mega infrastructure venture stoking apprehensions across the world—either because of the perceived inability of countries to handle outsized debts to China, or because some Beijing-funded infrastructure projects do not appear likely to justify their price tag.
India too has concerns over BRI primarily because a strand of it—the China-Pakistan Economic Corridor passes—through the section of Kashmir that is under Pakistani administration.
Last week, after the passage of the Build Act, Ray W. Washburne, president and chief executive officer of the OPIC, had in a statement said that the Act “recognizes that private sector-led investment is essential to economic growth and development and offers a financially-sound alternative to the state-directed initiatives pursued by China that have left many developing countries deep in debt.”
On Tuesday, Bohigian said OPIC was a “key component” of the US Indo-Pacific strategy, adding that his current visit to India and previous trips to Europe and Asia were to reinforce the Indo-Pacific strategy.
“I do think its important to draw a contrast and make sure that policymakers do have alternatives,” he said referring to China’s financing methods for infrastructure. “It’s important to have competition and when that competition has a level playing field, we win,” he added.
US businesses had invested almost $ 1 trillion dollars in the Indo-Pacific region last year alone, Bohigian said adding “I think that is important to think about not just state-directed investment but channelized from private sector, from what the OPIC does.”