The second Belt and Road Forum for International Cooperation in Beijing on April 25-27 will be China’s most important diplomatic event of the year hosted on home soil. Over the last six years, 123 countries and 29 international groups have signed cooperation documents on jointly building the Belt and Road Initiative (BRI). But what has the BRI brought to other countries? China Focus has launched a series of in-depth dialogue column “BRI Ambassador Interview” jointly with DRTT Group and China Development Observation, to show you the real thoughts of the ambassadors of Belt and Road countries and leaders of some international organizations or their representatives in China. Today we have an exclusive interview with Mattia Romani, Managing Director of Economics, Policy and Governance of the European Bank for Reconstruction and Development(EBRD).

The EBRD was founded in 1991 with headquarters in London, UK. It is one of the most important regional development financial institutions in the world. Since China joined the EBRD in 2016, the country has focused on connectivity for the B&R Initiative and international capacity cooperation. China conducts third party market cooperation and provides support for China-Europe mutually beneficial cooperation.

The Belt and Road Initiative is Globalization 2.0

Sun Chao：Actually the Secretary General of EBRD was here at the Belt and Road Forum for International Cooperation in Beijing. He emphasized “inclusiveness” and “globalization”. What’s your opinion on globalization and the BRI?    

Mattia Romani: The Belt and Road Forum and the Belt and Road Initiative is globalization 2.0. It’s a new try at globalization. Because the values and the principles of the B&R Initiative are really values and principles integrating economies, integrating people, and integrating countries. It’s really the basis of globalization.

So I think globalization in the past has primarily been a force for good. It has created wealth, opportunities, and diversities in our countries. And many have all benefited tremendously from globalization but at the same time, some people are being left behind in this growth. Some people have been excluded from the benefits of globalization. Some people have lost their jobs. Some cities have to be basically shut down because of this.

So that’s why going back to the Belt and Road Forum, the EBRD believes globalization is to go together with inclusiveness. It’s possible to create markets and economic opportunities where everybody benefits. It’s possible to support companies that operate justly in the market. It’s possible to create markets that behave according to principles that are included.

Sun Chao: How do you evaluate the Belt and Road Initiative?

Mattia Romani: The EBRD is a partner and supporter of the B&R Initiative. We think that the initiative raised by President Xi Jinping is really important. And we think that many countries can benefit from it. What I like in particular is that President Xi Jinping said the B&R Initiative belongs to everyone and that it needs to really be a win-win opportunity for everyone.

This leads back to what we were saying earlier about globalization. Previous economic opportunities were not always win-win. Not everybody benefited from it. So keeping an eye, paying attention to the fact that everyone can benefit is important. And this means yes, inclusion, as I was saying earlier, of people that may otherwise be left behind by the market.

Let me give you an example. There was a big article in the media because the first train from Yiwu to London arrived, and they called it the “Brexit Express”, which was a real flagship event. In fact, we know this train goes between Yiwu and Europe. But for every four full trains of merchandise that travel from Yiwu to Europe, only one train goes back full from Europe to China. The other three go back empty. Why? Because trade must be moved from China to Europe. The opportunities for European companies to export to China are still limited. If you want a really win-win B&R Initiative, then we need to balance this imbalance in trade. Because economically, it gives opportunities to European companies to feel that the markets in China are open for them to do business as much as the European markets are open for Chinese companies to do business. But also politically, because European people are concerned about their jobs, their well-beings, and competition from China. It’s only about the well-being. They want to make sure that the competition from China doesn’t cut the amount of jobs. So politically, it is very important that we balance the relationship, economic relationship, between Europe and China. So the EBRD will bring big support to the B&R Initiative.

China Becomes the 67^th Shareholder of the EBRD

Sun Chao: How do you think the EBRD can cooperate with the B&R Initiative to achieve better economic outcomes?

Mattia Romani: The EBRD is a public bank, very much like the World Bank or the Asian Development Bank, but it’s dedicated to building markets particularly through the private sector. So our focus is private sector development and creating markets. Last year, 25 years after the creation of the EBRD, we decided that we would take a look at what it means to build markets with the experience of the EBRD. What we found out is pretty much in line with the B&R initiative principles: competitive but also resilient, inclusive markets, markets which are well governed, green, and sustainable. So these are some of the qualities that we are looking to pursue at the EBRD.

We’ve signed a Memorandum of Understanding (MOU), together with other international financial institutions, with the Ministry of Finance around the B&R Initiative. We also signed an MOU with the Silk Road Fund as well as an MOU with the Asian Infrastructure Investment Bank (AIIB). And we started doing some projects under the B&R Initiative. We financed the construction of the road in Tajikistan that will connect the capital of Tajikistan with the Uzbek border together with the AIIB.

So in general, there are three ways in which we intend to support the B&R Initiative.

The first is through what we do best, which is financing projects. We have offices across the countries which are at the very heart of the B&R Initiative. And we know these countries very well. We’ve worked with them for 20 plus years. So we are very well placed to source good projects. And we intend to continue to finance them in the context of the Belt and Road Initiative.

Two, we believe very strongly that the obstacles that the initiative needs to overcome are not only the obstacle of hard infrastructure, building roads, railways, ports, airports and so on, but are also soft, about regulations, policies, customs and borders, regulation obstacles. Moving goods and services across countries along the B&R Initiative is very difficult. We have done some research, and what we see is that the central Asian countries, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and Turkmenistan, are some of the countries where it’s most difficult and expensive to move goods across borders, so we believe that there are many soft obstacles that need to be resolved. How do we intend to do that? Reform in the policy, engagements on policy, standardization of regulation across borders, exchange of best practice. These are the activities that we are very familiar with at the EBRD.

Now the third area is related to what happened last year at the EBRD, because last year China became the 67^th shareholder of our bank. And what we want to do, and that’s the third thing, is work much more closely with the Chinese national institutions and companies to see how we can cooperate on the B&R Initiative. That’s why we signed an MOU with the Silk Road Fund. And that’s why we are here more often. We are talking to both companies and financial institutions about how we can best cooperate on the B&R Initiative.

Sun Chao: What actions and plans does the EBRD have to better engage in the Belt and Road Initiative?

Mattia Romani: Countries are very different from one another and they face very different challenges. They also have different economic and political systems. So this is again why we are such a big fan of the B&R Initiative. It’s that we are very aware of the fact that these countries have their own political, economic dynamics. And you have to be respectful of the dynamics. You cannot just expect that they are going to change the way they do everything. You have to be respectful and we modestly advise them what they can change to improve other policy context. The reason why I think this is in line with the B&R Initiative is literally lifted from President Xi Jinping’s remarks at the Belt and Road Forum. He was very clear that the B&R Initiative is not about exporting an economic model or exporting a political model. It needs to behave in the political and economic context of the countries.

The author is the editorial board member of China Development Observation, Vice President of DRTT Group, and author of New Order: Ambassadors’Views on the Belt and Road Initiative.