The Brink: On balance, has the Belt and Road Initiative been a good thing?

Gallagher: Yes, it has largely been a good thing, but that doesn’t mean it’s not without risks that need to be addressed in the next 10 years. The Belt and Road Initiative is China’s Marshall Plan—it’s an effort to finance infrastructure, interconnectivity, and economic integration around the world. For the past 30 years or so, developing countries have been asking the West to increase its level of that kind of finance, and we have not been forthcoming. From the perspective of the finance minister in Kenya or the person selling tortillas on the streets of Guatemala City, new additional finance for things like infrastructure and energy access is what they’ve been asking for—and for a long time. The Chinese have come and financed that, and there’s real evidence that it’s impacted economic growth, which is important for developing countries. They need to grow and their incomes need to rise.

The Brink: What are those risks you mention and who, or what, have been some of the initiative’s losers?

Gallagher: China finances in the form of loans; it’s not like they’re giving you a grant to open up a hospital. But that financing hasn’t been available, or has been too expensive in private capital markets, so it’s great that they’re doing it. But it’s accentuated—not caused, though some in the West blur the two—a looming debt crisis. It’s also accentuated the climate crisis. At least until recently, many of the energy loans were for coal plants and for hydroelectric power plants in places like the Amazon jungle in Ecuador. Even though hydroelectric power is a renewable source, when you have to cut down parts of the thick rainforest, the emissions and impacts on indigenous lands and so forth can be significant. A lot of Chinese finance in these big, huge infrastructure projects is geographically located in very biodiverse areas.

The Brink: But China has said it’s going to shift course and switch investments into renewable energy.

Gallagher: China started to pivot in the middle of the COVID era—and for the better. They’re constantly evaluating this. A couple of years ago, they said they will not fund any more overseas coal plants and instead will focus on clean energy. That’s terrific. On biodiversity and land use, they haven’t made such a bold change yet. But that’s one of our recommendations coming out of the report—that you can have safeguards and risk management tools to make sure that you still provide that infrastructure, but in a way that at least does no harm. That doesn’t mean don’t do the infrastructure—this infrastructure is needed now more than ever—but let’s make it higher quality. On the debt crisis, this is a global policy challenge and China needs to take more leadership.

The Brink: Is the Chinese government receptive to your ideas and solutions?

Gallagher: We started the center about seven years ago, and we’ve been working on China ever since. Before COVID, we were there all the time. And China appreciates evidence-based analysis, even if it’s critical. I think we’ve built a track record, so that even though a study might find that the emissions from plants are significant, they know we also found that [Belt and Road financing] unlocks infrastructure bottlenecks and contributes to energy access in developing countries. We’re taking an evidence-based approach, and they do want to improve—they don’t want to have a bad reputation.

In this space of increased geopolitical tensions, we think it’s even more of a responsibility for academics now to do peer-reviewed, theoretically driven, and evidence-based work. And in a world of polarization and fake news, it’s really important to do the kind of engagement we’re doing. I’ve been asked to come and speak in Beijing—that shows that Boston University is seen as neutral and objective. One of the great things about the GDP Center is that we’re policy-oriented. You can’t expect Joe Biden or Xi Jinping to be reading the Quarterly Journal of Economics or Nature or Science before they go to bed every night; you’ve really got to figure out ways to strategically communicate, whether by going there in person or by making your work accessible to policy audiences. The GDP Center has a Chinese language version of its website.

The Brink: There’s speculation Xi Jinping, perhaps even Vladimir Putin, will attend the summit. Are you worried their appearances, along with what’s happening on the global stage, would suck a lot of the oxygen out of the room and overshadow the policy conversations?

Gallagher: Well, there’s many rooms at these big summits, so lots of discussion will go on. If there’s a lot of global geopolitical grandstanding, then, unfortunately for China, that’s what the world’s going to talk about. This is supposed to celebrate a 10-year global effort that deserves some celebration and some rethinking. It’s been very welcome in the Global South and it’s brought some real benefits. It’s also undeniable that it’s brought some real risks that need to be tackled by China, the host countries, and the global system. Our message for China is about how it can maximize those benefits and minimize those risks. That may not make the front page of the Global Times or the New York Times, but if we want to have an empirical-based conversation about it, that really should be the conclusion.

The Brink: What does the next decade hold? Do you think China will scale the initiative down now or revamp it?

Gallagher: Yes, I think it’s going to be scaled down. China has started shifting financing to a “small is beautiful” approach that prioritizes smaller, more targeted—and potentially greener—projects. Think hospitals, clean energy plants, low carbon manufacturing, not big, monstrous $3 billion, 10-year infrastructure projects. They can’t afford it, and the host countries can’t afford it either. They don’t want to have that kind of exposure, especially while things on the home front are more fragile.

The Brink: Did the West drop the ball when it came to supporting developing countries?

Gallagher: It’s not that the West hasn’t been doing anything—the West has created the World Bank and a family of what we call multilateral development banks, whose purpose was to try to provide low-cost financing to advance development. But the size of these institutions has not kept up with the size of growing needs: rising inequality, climate change, pandemics, major infrastructure gaps. And the financing has shifted due to fads and interests in the Global North. Most of what the West finances are things like education, health, environment—super important things. But if you’re investing in a small rural community in Tanzania so that they can have their maize or agricultural products be more productive, if there’s a bumpy dirt road that washes away whenever there’s a flood, they can’t get those things to market. Countries need to be making simultaneous investments across health, education, environment, and infrastructure. But, for a variety of reasons, Western institutions had basically abandoned infrastructure financing. Although another positive [thing] about the Belt and Road is that it’s triggered the West to invest more in infrastructure recently.

A lot of the narrative out there in the media is that there’s a competition between the West and China. I hope it doesn’t become a zero-sum game—there’s so much that needs to be financed. Developing countries need education and health, but they also need infrastructure and energy, so they can turn the lights on.