Competing with Belt and Road 2.0 Written Testimony by Dr. Brad Parks

The weighted average interest rate on China’s lending to the developing world is 4%.14 By comparison, the weighted average interest rate on lending from other bilateral and multilateral creditors to the developing world is only 2%.15 • Beijing has taken extraordinary measures to shield itself from the risk of not being repaid.16 The overall percentage of its lending to the developing world that is. [...] China itself has proven that it is capable of making course corrections to address the grievances of BRI participants and the reservations of potential BRI participants.65 As such, the USG needs to constitute a rapid response capability if it wants to ensure that it can identify and respond to address the unmet needs of partner countries with alacrity. [...] and its G7 partners ought to defend the right to self-determination by making it easy and cheap for finance ministries in low- and middle-income countries to hire world-class transaction lawyers and sovereign debt economists—through the African Legal Support Facility, the State Department’s Transaction Advisory Fund, Treasury’s Office of Technical Assistance, and similar mechanisms—as advisers. [...] 43 Michael Findley, a professor of government at the University of Texas, and his coauthors completed a field experiment in Uganda in which they randomly assigned descriptions of development projects financed by different donors, including China, the United States, the World Bank, and the African Development Bank. [...] An investigation of the underlying reasons that account for this difference in attitudes suggests that the public trusts and favors donors and lenders who make it easy to monitor their projects, and that the opposite is true of nontransparent suppliers of development finance.