TAIPEI (Taiwan News) – As per reports from The Economic Times, the United Nations, close on the heels of the OBOR Summit between May 14-16, has warned of economic, financial, social and environmental risks of China's Belt & Road Initiative (BRI) across a number of countries that are part of the mega connectivity project.
A recently concluded UN Economic and Social Commission for Asia and the Pacific Study (UNESCAP) has warned of financial risks in countries in south and central Asia where China announced investment.
The investments valued are relatively high compared to the size of economy of the recipient country.
The $15 Billion China-Uzbekistan deal signed in late 2013 is estimated to be equivalent to the GDP of Uzbekistan. Similarly China’s deals with Kazakhstan and Pakistan each represent one fifth of the recipient country’s GDP.
The recent China-Bangladesh accord signed in October 2016 also almost represents 20% of Bangladesh’s economy.
"Relatively easy access to large foreign loans for infrastructure projects, even if most of them tend to be on a concessional basis, can lead to risks through a slight deterioration in trade balance, undermining macroeconomic and balance of payments stability in small economies with underdeveloped financial markets and less effective debt management," the study said regarding the nature of the Chinese loans as cited by the paper.
