3 | In-Country Observations Our site visit observations challenged many of our initial assumptions about the BRI. The diversity of BRI projects and country experiences also highlighted the need for responses to many of the project’s individual aspects and impacts, rather than a single overarching U.S. strategy to counter the BRI, as discussed in the following section. This section discusses our findings in more detail, beginning with findings that applied broadly to BRI projects and then delving into economic and financial, political and social, and regulatory and governance findings.
Overarching Findings 1. The BRI manifests differently in each country. The BRI’s impact and the form its projects take depended on the country’s stage of development, domestic politics, security situation, and geographical proximity to China. These differences present distinct policy challenges to address. For example, in Ethiopia, local government officials told us numerous times that a lack of foreign exchange is one of the biggest obstacles to growth. This shortage of reserves both complicates BRI project repayment, as contract terms were mostly negotiated in dollars, and hinders the intended trade-focused spillovers from the BRI, as Ethiopian firms are unable to import the machinery needed to establish an export sector able to capitalize on better trade access. In contrast, Malaysia has a healthy pool of reserves and does not face this constraint. The way projects were negotiated also differed across contexts. The Ethiopian Ministry of Finance’s Ethio-Chinese Development Office explained that the Ethiopian government that first devises a national development plan, determines what infrastructure projects are necessary to meet the country’s development goals, and then seeks financing for those projects from external entities, most of which end up being Chinese. Ethiopia’s lack of historical development projects means that productive, “first choice” projects are needed and available.
Addis Ababa, Ethiopia. October 2019. Photo by Rebecca Lim. 19
