The paper is devoted to study the contemporary role of investments to economic development in t...
One Belt One Road
Silk Road Economic Belt and the 21st Maritime Silk Road (One Belt, One Road, “OBOR”) was initiated by China to create investment and trade opportunities between China and countries in Central Asia, West and East Asia, the Middle East and Europe. Chinese President Xi Jinping first introduced the Silk Road Economic Belt initiative in Kazakhstan (September 7, 2013).
OBOR, or The New Silk Road, covers over 68 countries, 65% of global population, one-third of global GDP, a quarter of world’s trade. China will ultimately lend as much as $8 trillion for infrastructure in 68 countries.
OBOR is to benefit primarily Uzbekistan and other Central Asian that have been central routes of the old Silk Road. Chinese Businesses signed $304.9bn worth projects in Belt and Road countries in 2014-2016, said Chinese authorities.
China initiated a $900bn Silk Road initiative to create “a new era of globalization”, as President Xi Jinping told 29 head of states who gathered in Beijing for “Belt and Road Infrastructure Summit” on 14 May, 2017. “The Belt and Road initiative is rooted in the ancient Silk Road ... but it is also open to all other countries,” the Chinese leader said, promising to pump $125bn into the scheme.
Asian Infrastructure Investment Bank
Asian Infrastructure Investment Bank (AIIB) a new multilateral development bank founded to bring countries together to address the daunting infrastructure needs across Asia and beyond. Headquartered in Beijing, AIIB’s mission is to improve economic and social development in Asia by investing in high quality, financially viable and environmentally friendly infrastructure projects.
To finance Silk Road initiatives, China established the AIIB with $100bn capital with 77 countries joined as members, including major developed western economies such as Germany, France, Italy and the UK. Members include countries from five continents – from regional members Australia and Singapore in Asia to Ethiopia in Africa to Argentine and Chile in South America.
AIIB already approved 28 projects, financed 13 projects worth $2.2bn, since the Bank was established in January 2016, incl. in Central Asian countries such as Uzbekistan and Tajikistan. These projects are being co-financed by multilateral and international financial institutions such as the World Bank, ADB and the EBRD. AIIB plans to invest around $10bn in 2018, said AIIB President.
Silk Road Fund
Silk Road Fund with $40bn capital was established by China in December 2014 with $10bn funding from China itself including State Administration of Foreign Exchange ($6.5bn), sovereign wealth fund China Investment Corporation ($1.5bn), and state-banks China Development Bank ($0.5bn) and Export-Import Bank of China ($1.5bn). It mainly “provides investment and financing support for trade and economic cooperation and connectivity” under OBOR, including Uzbekistan and other Central Asian countries.
President Xi pledged a major funding boost to the new Silk Road in May 2017, including an extra CNY100bn ($14.50bn) into the existing Silk Road Fund, CNY380bn in loans from two policy banks and CNY60bn in aid to developing countries and international bodies in countries along the new trade routes.
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