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COVID-19 won''t have long-term impact on BRI

2020-03-26 09:44:57 China Daily Global

The big cause of any setbacks in BRI projects are travel restrictions and border control.

The Belt and Road Initiative may experience short-term delays from the COVID-19 pandemic, but its long-term momentum will be sustained and even strengthened with multibillion-dollar projects from Latin America to South Asia underway.

The impact of COVID-19 in countries around the world is very visible at the moment. Similarly, projects along the BRI have been slowed by lockdowns and travel restrictions. However, these short-term setbacks are unlikely to derail projects with horizons spanning years.

"We expect infrastructure projects to be delayed due to weaker financial sentiment and supply chain disruptions, but strong demand and a pipeline of projects continue to point to a post-crisis rebound," Jangping Thia, manager of the economics unit at the Asian Infrastructure Investment Bank, said.

The big cause of any setbacks in BRI projects are travel restrictions and border control.

For example, work on Sri Lanka's Port City Colombo project has been slowed by travel restrictions as Chinese workers have not been able to return to work.

Workers on the Jakarta-Bandung High-Speed Railway project are also unable to return to Indonesia after the Lunar New Year holiday.

As much as 14 percent of workers on the project are Chinese nationals, according to PT Kereta Cepat Indonesia China, the railway consortium that will operate high-speed rail systems in Indonesia.

"The progress of a handful of infrastructure projects undertaken by Chinese contractors outside of China will face continued delays due to the ongoing COVID-19 outbreak. Some of these projects are part of China-led BRI," Jason Yek, Asia country risk analyst for Fitch Solutions, said.

Out of all the projects currently under construction, the value of all projects involving Chinese contractors is estimated to be in excess of $300 billion, said Yek.

"Most projects involving Chinese contractors are located in Asian markets such as Indonesia, Pakistan and Laos, and projects that utilize a higher proportion of Chinese labor face elevated risks of delays."