Agreements with Japan and Australia have already been put in place by the Overseas Private Investment Corporation
Robert Delaney, US bureau chiefUPDATED : Tuesday, 25 Sep 2018, 9:29AM
The US government’s international finance development agency is in talks with India to include the South Asian country in a partnership that Washington has formed with its allies in the region to counter China’s “Belt and Road Initiative”.
After signing agreements with the overseas finance development arms of Japan and Australia, the Overseas Private Investment Corporation (OPIC) is “in discussions with India right now” to reach a memorandum of understanding with India, OPIC President and CEO Ray Washburne told the South China Morning Post on Monday.
If concluded, the agreement “will reflect very much like the ones we have with Japan and Australia”, Washburne said.
Watch: What is the ‘Belt and Road Initiative’?
Those partnerships allow the three countries to streamline the process of joint investments in energy, transport, tourism and technology infrastructure. The investments are also meant to attract private capital to the projects – investments that are, in some cases, many times larger than those of the three governments.
OPIC’s influence in the Indo-Pacific region is set to grow after the passage of a bill that would give the agency authority to invest equity in development projects instead of just providing loans.
The “Better Utilisation of Investments Leading to Development Act of 2018” (Build Act), which was passed by the US House of Representatives in July, has been included in “must-pass” Federal Aviation Administration (FAA) legislation expected to be voted on by the Senate this week.
If the bill is passed and signed into law by US President Donald Trump, OPIC would be renamed the US International Development Finance Corporation (USIDFC) and amount of money the agency could put toward infrastructure projects would more than double, with a cap of US$60 billion.
The trilateral partnership OPIC has with Japan and Australia is part of what US Secretary of State Mike Pompeo recently called an “Indo-Pacific Economic Vision”, an open challenge to China’s growing influence in Asia.
The Build Act’s sponsor in the House of Representatives, Florida’s Ted Yoho, said legislation was needed to counter a “predatory” China. The FAA legislation must be passed by Sunday to ensure the continued operation of the US air travel system, making it unlikely that lawmakers will vote it down.
“We’re making sure shipping lanes stay open and making sure economies keep growing, and that there’s no hegemony by any certain country, ie. China, that ends up taking over and coordinating all of that,” said Yoho, a Republican who is chairman of the House Foreign Affairs Subcommittee on Asia and the Pacific.
Bringing India into the partnership is “a way to work together with like-minded people versus being offered what Xi Jinping wants to offer”, Yoho said, referring to the Chinese president.
China has “the predatory lending practices of the robber barons of the 1800s”, he added.
“If you go back to Xi Jinping and [the Chinese government’s 19th Party Congress in October 2017], when he said it was time for China to take the centre stage – they were very provocative and threatening remarks,” Yoho said. “He doesn’t want to share the stage; he wants to take it over.”
Five years ago, Xi unveiled the Belt and Road Initiative to build economic, political and cultural ties around Asia, and connect the region to Europe and Africa with infrastructure projects that include ports, roads, railways and pipelines. The initiative began with the Chinese central government’s US$40 billion Silk Road Fund.
Myanmar is one of the countries targeted by the competing economic development interests of the US and China.
China’s state-run Citic Group is spending about US$1.3 billion on the first phase of the Kyauk Pyu deep water port on the western tip of Myanmar’s Rakhine state, to accommodate bigger oil tankers.
Meanwhile, OPIC plans to provide US$250 million in financing to Apollo Towers Myanmar Limited for the development of telecommunications towers throughout the country, according to the agency’s website. Apollo has built 1,800 towers since the start of its operations in 2014 and plans to construct more than 2,000 others in the next phase of development.