Inclusion and prosperity along the Belt and Road

THE Belt and Road Initiative (BRI) has made significant progress, evolving into the world's largest platform of international cooperation and a widely-embraced endeavour globally.

It has played a crucial role in facilitating inclusive growth and catalysing the transformation of the global governance framework.

Alongside physical infrastructure, the recent strategies on which it has focussed are digital transformation, knowledge exchange and green finance.

BRI aims to improve information technology networks and communication systems in order to increase digital connections, giving more people access to financial services such as mobile banking and digital payments.

This is especially beneficial to people living in distant or underserved areas.

Digital financial services give consumers the ability to make convenient and safe online payments, which is essential for ecommerce. When shopping online, customers from anywhere in the world can access ecommerce platforms and utilise digital payment methods such as mobile banking apps to pay for their purchases.

This greatly facilitates international trade.

For instance, Alibaba's expanding influence in ecommerce markets and Huawei's continuous spread of its "backbone enterprise" 5G network protocol for smart cities are substantial.

Their expansion enables clients from other countries to make payments and use ecommerce services, contributing to the standard of urbanisation and electronic trade on a global level.

In 2021, Malaysia formed Digital Nasional Berhad (DNB) under the Finance Ministry to oversee nationwide deployment of 5G infrastructure and networks.

DNB entered a 10-year partnership with the Swedish company Ericsson to deliver a single wholesale 5G network following a public tender. A vital core infrastructure, 5G can rapidly enable the digital ecosystem and expedite the nation's digital transformation agenda.

This advancement will create better-paying jobs and opportunities, particularly for young people, as well as reduce brain drain and attract talent from overseas.

More opportunities will arise as 5G becomes more widely available and cost per gigabyte (GB) of data falls.

Under the Malaysia Digital Economy Blueprint, as published by the Economic Planning Unit, there are five strategic digital connection initiatives: establishment of a data-rich society; implementation of a digital literacy framework; digitalisation of small and medium-sized enterprises (SMEs); enhancement of connectivity through the deployment of 5G technology; and fostering public-private partnerships.

To achieve the greatest impact, the establishment of a data-rich society takes precedence, primarily through the adoption of a Digital First and Cloud First strategy.

Additionally, efforts to enhance education and learning through the implementation of a digital literacy and digital skills framework were prioritised.

The digitalisation of SMEs was another crucial focus, involving bringing such enterprises on board with the programme and establishing digital hubs.

In parallel, enhancing connectivity through the deployment of 5G technology, infrastructure sharing, the introduction of a national digital identification system, and ensuring affordable costs were deemed essential.

Finally, fostering public-private partnerships was emphasised, with the government serving as a catalyst and facilitator in providing policy clarity and consistency; while the private sector was encouraged to invest in and execute these initiatives.

In terms of knowledge exchange, Malaysian financial institutions can engage in knowledge sharing and capacity-building programmes with their Chinese counterparts.

This exchange can lead to the adoption of innovative financial technologies and practices that improve access to financial services for previously underserved populations.

For instance, 20 countries, including China and Malaysia, participated in the Integrated National Financing Framework (INFF) Asia Pacific Knowledge Exchange in June, exchanging ideas as well as promoting blended finance and solutions in digital finance.

It emphasised the need for a whole-of-society approach in achieving the Sustainable Development Goals 2030 agenda in all countries.

There is a need for change management to be applied across government, as well as to leverage the input of the private sector, in order to move the country forward as a team.

To meet the Paris Agreement's emission reduction targets (to limit global warming to well below 2℃ above pre-industrial levels), the world community must raise new green investments.

The BRI is also aligned with green finance principles, promoting environmentally friendly projects.

Green financing is taking root in many countries along the Belt and Road, which is critical to fostering green and sustainable economic development.

To encourage the relevant financial institutions and enterprises to engage in green investment and demonstrate the internal demands of BRI construction for green and sustainable development, the Green Finance Committee of the China Society for Finance and Banking and the City of London Green Finance Initiative collaborated to develop and release the Green Investment Principles (GIP) in November 2018.

The GIP is organised into three levels – strategy, operations, and innovation – and includes seven principles such as corporate governance, strategy formulation, project management, external communication, and green financial instruments, among others.

It serves as a set of voluntary standards that global financial institutions and firms participating in BRI investment can accept and put into practice.

As reported in the BRI Investment Report 2022, published by the Green Finance and Development Centre, green energy involvement (solar, wind and hydro power) grew by 50% that year.

Investments stood at US$2.7bil (RM12.85bil), up from US$100mil (RM476mil) the year before; while construction projects increased by US$1.9bil (RM9bil) to US$5.3bil (RM25.22bil)/

In summary, China stands as a leader in technology and innovation, whereas Malaysia has a developing tech-savvy workforce.

Both countries can work together on cooperative R&D projects to create cutting-edge technologies such as 5G, artificial intelligence and renewable energy.

They may accelerate digital innovation and generate new chances for sustainable development by pooling expertise and resources.

As we navigate a future reliant on global cooperation, BRI shows the potential for inclusive growth, digital innovation and sustainability.

Through collaboration and green principles, BRI offers a path to a more prosperous and equitable world.

Dr Lee Hui Shan is an Associate Professor at Universiti Tunku Abdul Rahman. The views expressed here are entirely the writer’s own.

The SEARCH Scholar Series is a social responsibility programme jointly organised by the South-East Asia Research Centre for Humanities (SEARCH) and Tunku Abdul Rahman University of Management and Technology (TAR UMT), in conjunction with the 10-year anniversary of the Belt and Road Initiative.