Risk or opportunity? The Belt and Road Initiative and the role of debt in the China-Central Asia-West Asia Economic Corridor

Nienke van Twillert*, Solmaria Halleck Vega

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

1 Citation (Scopus)

Abstract

This Research Note provides an empirical contribution to the discussion on the debt implications vis-à-vis the unfolding of the Belt and Road Initiative (BRI). For this purpose, we analyze the impact of external debt and other relevant factors on the economies of the China-Central Asia-West Asia Economic Corridor using panel data over the period 1996–2018. The reasons we focus on this geographic area are threefold: first, these countries form a key part of the BRI with historical connections to the Silk Road; second, it provides a unique combination of economies in transition such as the former Soviet Union countries and larger economies such as Iran and Turkey; and last but not least, this corridor has received relatively less attention in the related literature. Among the main findings is that debt service on external debt has a positive effect on GNI per capita, both with and without China in the empirical analysis. As another key component of this major development strategy, infrastructure is also found to have a positive impact. The results thus foreshadow growing opportunities as the BRI unfolds, albeit with foreseen issues related to debt sustainability, ecological and wellbeing considerations.

Original languageEnglish
Pages (from-to)365-377
JournalEurasian Geography and Economics
Volume64
Issue number3
Early online date9 Dec 2021
DOIs
Publication statusPublished - 3 Apr 2023

Keywords

  • Belt and Road Initiative
  • China-Central Asia-West Asia Economic Corridor
  • debt
  • panel data models

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