Blue Dot Network

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Introduction

The world has been transforming into a global village. Globalisation has unimaginably transformed lifestyles and expanded opportunities. With exchange of ideas and innovations, development is constantly happening. Infrastructural development has been crucial for economic growth. Infrastructure facilitates trade, creates of network between different segments of the society, help in distribution of resources, enables efficient transportation and allows free flow of communication. Throughout the world, countries form alliances with each in contributing all kind of resources – finance, labour, machinery, land, etc. to grow and help grow economies. One such project is the Blue dot network.

Blue Dot Network and its Objectives

It is a multi-stakeholder initiative aimed at building high standard and sustainable global infrastructure development by way of bringing together governments, private sector and civil societies. This network was initially launched by United States in association with Japan and Australia during the 35th ASEAN Summit at Bangkok in November 2019. It was initially viewed as an implement to assess and monitor projects run in the Indo-Pacific region. However, on 25th February 2020, India has expressed its interest in the project after invitation from the U.S. to join and create a quadrilateral arrangement to build and develop quality infrastructure projects. Currently, the project is led by the U.S. International Development Finance Corporation, along with the Japan Bank for International Cooperation (government-owned) and Department of Foreign Affairs of Australia.

A common observation and opinion is that this network is similar to the China’s Belt and Road Initiative (BRI) in which China seeks to finance developing Asian countries who are suffering a high debt situation. Projects undertaken under the Blue Dot Network (BDN) are aimed at incorporating global principles and maintaining high level standards. BDN precisely aims at infrastructural development that is transparent and accountable, sustainable, and socially and environmentally responsible, enabling economic empowerment. It was also formed to respect the sovereignty of property and resources, labour and human rights, allegiance towards principles of rule of law, sound and equitable practices of government in procurement of resources and financing projects, in order to earn public confidence and foster investment. It further aims at promoting quality infrastructure investment obligated by G20 countries.

Features

Some of the essential features of the network are:

  • The approved projects will be certified by way of marking with a blue dot, symbolising a standard of excellence after being evaluated on parameters such as level of public consultation, extent of transparent funding, debt traps and environmental norms.
  • There will be access to private and public finance institutions that will help mitigate financing risks, enabling smooth undertaking of development projects, both domestically as well as across international borders, by developing countries such as India.
  • Projects are aimed at achieving sustainability and transparency.
  • Participation of private sector is highly encouraged, recognising the instrumental role private sector plays in an economy.

Significance of Public International Law

The infrastructure projects are mandated to align with the G-20 principles for Quality Infrastructure Investment, aimed at sustainable lending and borrowing, the G7 Charlevoix Commitment on Innovative Financing for Development, and the Equator Principles, which require financial institutions to assess and manage  the environmental and social risks in a given project. However, there are no strict international principles that these projects are required to be adhered to.

Relevance for India

Modernisation of infrastructure is crucial to address issues of regional inequality and create new growth opportunities. The BDN would also help New Delhi advance its own “Act East policy” strategy. To briefly summarise, India is expected to benefit in the following manner:

  • Greater transparency and financial accountability
  • Equitable and sustainable investment in infrastructure
  • Increased potential foreign investment for the Indian economy.
  • Boosts economic health of India by better quality infrastructural projects.
  • The network will act as a globally recognized seal of approval for major infrastructure projects, which will drive home the message that these projects are not exploitative but sustainable.

Critical analysis       

The initiative is in its infant stage. The United States, Japan and Australia have not decided and agreed upon the model that has to be adopted. It is a common opinion that the primary aim of the BDN is to counter the BRI, and therefore their modus operandi of deciding seems delayed when compared with that of the BRI. This lack of visibility and vision can potentially discourage investors and project developers from being interested in BDN.

One of the weaknesses of the BDN lies in the very subjectivity of the criteria used. The projects will not be evaluated according to strictly laid down international standards, but in accordance to the American, Japanese and Australian agencies, which may lead to situations of conflict of interest. Will this autonomy vested in those three agencies alone encourage the involvement of all companies other than American, Japanese, and Australian companies? Preliminary information reveals that projects under BDN would be evaluated in the aspects such as human rights, environmental protection, labour rights, transparency and sustainability. This objective sounds great, but the expectation is that these evaluations should be conducted by autonomous bodies, free from the bias of any country. Greater coordination between BRI and the BDN needs to be achieved to ensure the development of Asian countries. Competitiveness has the potential to threaten the development projects in Asia.

Conclusion    

Infrastructure projects are always welcomed, given their potential to address economic downfalls. With the world advancing in its technology and tools, it has become very essential to carry out human functions without depleting the resources in an unsustainable manner and degrading the home for a million creatures. With much focus in sustainability, the goals of the BDN seems to be very attractive. However, the challenges pose problems and hence the success of the project will depend upon the efficient carrying out of project, fulfilling the very purpose of the network, and functioning in harmony.

Author: S. Dhivya from Symbiosis Law School, Pune.

Editor: Silky Mittal, Junior Editor, Lexlife India.

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