Context

India and the United States may not have signed the elusive limited trade deal during the visit of US President Donald Trump, but Washington was able to ask New Delhi to participate in the Blue Dot Network (BDN), an initiative under the quadrilateral mechanism that seeks to build and finance quality infrastructure projects. 

About

• The concept of the Blue Dot Network was officially launched on 4 November 2019 at the Indo-Pacific Business Forum in Bangkok, Thailand.
• It will be led by the US (International Development Finance Corporation (DFC)), along with Japan (Japanese Bank for International Cooperation) and Australia (Department of Foreign Affairs and Trade)- the three countries, along with India, form the Quadrilateral grouping.
• Multi-stakeholder initiative: It is meant to be a multi-stakeholder initiative that aims to bring governments, the private sector and civil society together to promote “high quality, trusted standards for global infrastructure development”.
• This means that as part of this initiative, infrastructure projects will be vetted and approved by the network depending on standards, as per which, the projects should meet certain global infrastructure principles.
• The projects that are approved will get a “Blue Dot”, thereby setting universal standards of excellence, which will attract private capital to projects in developing and emerging economies.

Countering China’s Belt and Road Initiative?

• The proposal for the Blue Dot network is part of the US’s Indo-Pacific strategy, which is aimed at countering Chinese ambitious BRI.
• Blue Dot may be seen as a counter to BRI, it will need a lot of work for two reasons.
  • First, there is a fundamental difference between BRI and Blue Dot — while the former involves direct financing, giving countries in need immediate short-term relief, the latter is not a direct financing initiative and therefore may not be what some developing countries need.
  • Secondly, Blue Dot will require coordination among multiple stakeholders when it comes to grading projects. “Given the past experience of Quad, the countries involved in it are still struggling to put a viable bloc. Therefore, it remains to be seen how Blue Dot fares in the long run.” (Quad is an informal strategic dialogue between the US, Japan, Australia and India)

US foreign policy towards China

• Before 2001, US foreign policy was focussed towards integrating China into its plan, but this changed after China’s emergence as a global superpower.
• Under Barack Obama, US foreign policy started shifting focus to Asia, where the US wanted to counter China’s growing influence.
• The Indo-Pacific region, which stretches from India’s west coast to the west coast of the US, is the most economically dynamic and populous part of the world.
• Further, the US sees China’s infrastructure investments and trade strategies as reinforcing its geopolitical aspirations, including efforts to build and militarise outposts in the South China Sea, which as per the US, restricts the free movement of trade and undermines regional stability.

Significance of the network:

• Boost to infrastructure: A country that joins the Blue Dot Network as a partner will boost its project capability efforts. Further, if the infrastructure development projects of that particular country obtain a Blue Dot certification, they will be seen as adhering to the highest level of global standards.
• Access to financing institutions: Access to private and public financing institutions will help mitigate financing risks, acting as an impetus for developing countries like India to smoothly undertake development projects domestically as well as internationally.
• Clear project standards: The Blue Dot Network will provide countries with clear project standards. Projects, companies, and governments that meet or uphold the standards can build public confidence in their commitment to good practices.