Blue Dot Network
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Economics

Blue Dot Network (BDN)

Why in the news?

The Blue Dot Network was a proposal that was on the table when US President Donald Trump made his maiden visit to India and there is a possibility that India may join it.

What is the Blue Dot network?

The BDN was formally announced on 4th November 2019 at the Indo-Pacific Business Forum in Bangkok, Thailand. It will be led by the US along with Japan and Australia.

It is a multi-stakeholder initiative to bring together governments, the private sector, and civil society to promote high-quality, trusted standards for global infrastructure development.

It will certify the infrastructure and development projects.

It was jointly launched by the US (Development Finance Corporation),  Japan (Japanese Bank for International Cooperation), and Australia (Department of Foreign Affairs and Trade).

It is a multi-stakeholder initiative that was launched in November 2019 on the sidelines of the 35th ASEAN Summit (Thailand).

What does the initiative aim to do?

It aims to promote high quality and trusted standards for global infrastructure development by bringing together the governments, the private sector, and civil society.

The infrastructure projects will be vetted and approved by the network depending on standards, as per which, the projects should meet certain global infrastructure principles.

The projects that are approved will get a “Blue Dot”, thereby setting universal standards of excellence.

This will attract private capital to projects in developing and emerging economies.

It seems to be planned as a direct counter to China’s Belt and Road Initiative (BRI). 

However, unlike the BRI, the BDN would not offer public funds or loans for the project. BDN will serve as a globally recognized seal of approval for major infrastructure projects, letting people know that projects are sustainable and not exploitative.

India has not joined China’s BRI yet.

It is expected to serve as a globally recognized evaluation and certification system for roads, ports, and bridges with a focus on the Indo-Pacific region.

Infrastructure projects would be graded on debt, environmental standards, labor standards, etc.

This system would apply to projects in any citizen-centric country where citizens would like to evaluate such projects.

Belt and Road initiative:

BRI is a program that wants to connect Asia with Africa and Europe.

It wants to connect them via land and maritime networks along six corridors to improve regional integration, increasing trade, and stimulating economic growth.

The name was coined in 2013 by China’s President Xi Jinping.

It consists of a belt of rail routes, highways, oil and gas pipelines, and other infrastructure projects extending from Xian in Central China through Central Asia, Russia, West Asia, and Europe.

There is also a branch extending from Kashgar in Xinjiang to Gwadar in Balochistan via Pakistan occupied Kashmir (PoK).

The project covers two parts.

Silk Road Economic Belt: It is land-based and is expected to connect China with Central Asia, Eastern Europe, and Western Europe.

21st Century Maritime Silk Road: It is sea-based and is expected to connect China’s southern coast to the Mediterranean, Africa, South-East Asia, and Central Asia.

What are the areas in which Blue Dot needs a lot of work?

Financing - The BRI involves direct financing that will give countries in need of immediate short-term relief.

But, the Blue Dot Network is not a direct financing initiative and therefore may not be what some developing countries need.

The question is whether the Blue Dot network is offering first-world solutions to third-world countries.

Coordination - The Blue Dot will require coordination among multiple stakeholders when it comes to grading projects.

Conclusion

Till 2019, China’s investment in BRI projects in various countries exceeds US$90 billion. The US through Blue Dot Network is arguing that the quality of investments in infrastructure is just as important as the quantity. The new Blue Dot Network, therefore, is best seen as part of the U.S.A.'s strategy of trying to persuade developing countries in Asia-Pacific not to rely on Chinese funds for infrastructure.