China’s second Belt and Road Forum in late April brought with it a few innovations. Apparently keen to regain some goodwill, China announced modifications to the multibillion-dollar infrastructure initiative. This includes a closer collaboration with multilateral financial institutions, giving potential projects a more stringent approval procedure.

In addition, China has agreed to set up a mediation panel in cooperation with Singapore, presumably to move away from China-centric dispute settlement mechanisms.

This is clearly a reaction to recent backlashes against the Belt and Road Initiative (BRI), many of which occurred in Southeast Asian countries. Both Thailand and Indonesia have noticeably limited Chinese involvement in their national railway infrastructure over the past five years. In the past year, Malaysia has successfully countered the perceived Chinese “debt-trap diplomacy” by renegotiating the East Coast Rail Link project, and recently agreed to the project at two-thirds of the original price.

It is notable that ASEAN has begun to assert control over its own infrastructural destiny. In fact, the organization has had a connectivity agenda in place for the last decade, publishing its first ASEAN Master Plan for Connectivity in 2010, followed in 2016 by the ASEAN Connectivity Master Plan 2025.

Two and a half years after the launch of the newest connectivity strategy, it i s now time to take stock of Southeast Asia’s progress in the infrastructure game. Short of buying into its own agenda, ASEAN has not backed its connectivity blueprint with a significant funding mechanism.

Founded in 2011, the Asia Development Bank-managed US$300 million ASEAN Infrastructure Fund was never going to serve the region’s annual investment need of an estimated $184 billion for energy, highways, ports and railways. Meanwhile, external partners have been vying for investment opportunities in Southeast Asia and are contributing significantly to national infrastructure development.

And it’s not just China. Under everyone’s noses, Japan has actually been outspending its competitor on Southeast Asian connectivity. Various newcomers are entering an increasingly crowded field, with India, the European Union, South Korea and the United States eager to compete for slices of the pie.

To manage these external connectivity providers, ASEAN is working through a variety of mechanisms. Regionally, the organization has sought to balance commitments by China, Japan and other partners through a series of ASEAN+1 meetings on connectivity. ASEAN also convenes an annual connectivity symposium, although it mainly acts as a venue for sharing information rather than negotiating commitments.

These efforts fall short of a true regional forum that aims for coordination on connectivity in the region. Unlike security or trade, in which ASEAN leads regional institutions, connectivity remains an open field with each agent pursuing its own agenda.

In this environment, the ASEAN member states have tried, to the best of their abilities, to balance external pressures. Cambodia, Thailand, Myanmar and Indonesia have attempted to bind both Japan and China in order to avoid overreliance on a single partner. But it is difficult for individual states to strike the right balance, and less developed ASEAN member states may struggle to implement their national infrastructure objectives when faced with powerful external interests.

This is where the ASEAN Connectivity Master Plan 2025 can make a difference. Its key deliverable is the “rolling priority project pipeline”, which should support member states in planning and seeking funding for high-quality, low-risk infrastructure projects.

The pipeline consists of a mechanism to assess the reduced costs of trade and the transnational benefits of potential infrastructure projects. Following approval, the mechanism is supposed to provide ASEAN states with a pathway to mobilize resources from partners, including the private sector and multilateral financial institutions.

What remains to be seen is whether the mechanism will actually work as expected. ASEAN member states have submitted around 40 potential infrastructure projects that are currently under review. It is still unclear whether these will gain approval from the World Bank, which conducts the economic assessment. It also remains to be seen what resources can be mobilized, and from which sources.

The project pipeline is an experiment in many ways. ASEAN does not have much experience with regional-level funding mechanisms, usually leaving project implementation up to its member states. Whether the regional agenda can truly influence its members’ national efforts remains unclear.

Even if the project pipeline manages to mobilize significant funds, many ASEAN states do not have a strong track record in private-sector infrastructure investment and some companies may be loath to invest in parts of the region.

Questions remain over whether China, Japan, the EU or the US will be willing to commit to projects on ASEAN’s terms, as these countries have their own mechanisms for project planning and appraisal. Taken together, the challenge will be whether the regional mechanism can add value to the member states’ connectivity efforts

Still, it is clear that the way for ASEAN to become master of its domain is to establish strong regional management mechanisms. As its regional security and trade mechanisms have shown, the region works best when ASEAN takes the institutional lead. From this perspective, it should be a priority to set up a regional ASEAN+ forum to negotiate and deconflict the various connectivity visions.

In the meantime, the rolling priority project pipeline is a promising move away from unilateralism, giving ASEAN states a regional outlet to mobilize resources in a transparent and competitive way. If ASEAN manages to retain a coherent position on connectivity and avoid individual defection, its Connectivity Master Plan may become a blueprint for other regions.

Many countries have concerns over the impact of large infrastructure investments. Examples abound of investments resulting in economically questionable white elephants, damage to the local environment, capture of national public finances and other geopolitical consequences. A well-executed regional connectivity strategy by ASEAN could be a model for many other world regions facing BRI-induced crises in their own backyards.

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The writer is a visiting fellow at The Habibie Center. The views expressed are his own.

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