tv Discussion on Global Infrastructure CSPAN July 31, 2021 5:28pm-6:30pm EDT
get from anyone else you worked on the campaign and in the administration himself. >> former clinton administration aide, and author of first friends, gary ginsberg, talks about political influence wielded by confidantes and friends of u.s. presidents, sunday night at 8:00 eastern on c-span q&a. you can also listen to una as a podcast wherever you get your podcasts. ♪ >> next, a discussion on infrastructure investment in the developing world. panelists talk about the challenges and opportunities of global infrastructure development projects. they will also discuss the g-7 global infrastructure initiative known as the build back better , world. the center for strategic and international studies (csis) hosts this one-hour event. >> good day, everyone. my name is matthew goodman.
i am senior vice president at csis, delighted to welcome you to the special event on build back better world, meeting the global infrastructure challenge. delighted to have you with us. on behalf of my colleague, john, who directs our reconnecting asia infrastructure project, and myself, who directs the economics program at csis, we are delighted to have you here with us. this will be a very special hour. i have been a csis 10 years and i cannot think of our high-powered panel we have had, or that i have had the chance to moderate. so i'm really looking for to this and think you will enjoy it as well. i am going to introduce the panel in a second. let me set the scene by saying, this is actually infrastructure week, at least at csis. obviously, we all know there has been some, hopefully, some progress on capitol hill on a
domestic infrastructure plan, $1 trillion of spending on infrastructure. infrastructure. we have been doing some work on trilateral cooperation among japan, australia, and the united states on trying to move forward and international infrastructure initiative of their own. the g7, the group of seven advanced market democracies, back in june, when they met in britain agreed on something called build back better world which was their name for a global infrastructure program which they are going to work on together. they described it, the white house fact sheet described it as "a values-driven, high standard, and transparent infrastructure partnership led by major
democracies to help narrow the $40 trillion plus infrastructure need in the developing world. they said they are going to focus on four areas -- climate, health, security, gender equity and equality. the initiative is not very well-defined, but we have enough information on what the motivating factors are and the broad elements are to try to do an initial assessment, which is what we are doing today. more broadly, we are looking at the u.s. competitive position in the world, commercially, economically, and from an international relations and foreign policy perspective. this is an important part of that story as well. we have an absolutely terrific group of more than experts. they are senior thought leaders on issues around this subject matter today.
i'm going to invite them to join us now and they are, in alphabetical order, ambassador charlene barshefsky, chair of parkside global advisors and former trade ambassador in the clinton administration. brendan beck tell, chairman and ceo of the bechtel group and member of the board. glad to have rendon with us as well. marcy frost, ceo of calpers, the california public employees retirement system, one of the biggest public pension investors in the united states -- i think it is the biggest, may be in the world. delighted to have her with us from sacramento. and finally and last but not least, steve hadley, the principal at rice, gates, and
manual and former national security advisor. steve and charlene cochaired a task force john and i led a couple of years ago on global infrastructure and designing a u.s. global infrastructure strategy and we are delighted to have them with us to talk about that and where we are today. we are going to do a sort of tagteam queue and day. i'm going to start with brendan. you are everywhere in the world. your company -- i'm interested in linking the domestic and international story. we are a think tank focused internationally, but that the mastic infrastructure story is important in and of itself. how does it link to the international story? why is it important than how do you think about it in the global context? brendan: yes.
first, let's remind ourselves why it matters if u.s. companies are competitive in this arena. it comes back to u.s. leadership. billions of people around the world, particularly in developing countries are lacking basic infrastructure from access to clean energy and water to digital connectivity. the real question is how and through whom are those needs going to be met. the answer has profound impacts on america. it will affect whether we can avoid the worst impacts of climate change, whether inequality gaps get smaller or bigger around the world and whether more countries become more free and open as a result of access to digital infrastructure. i would say think about when american companies are engaged abroad, they are a force for good and catalyst for positive change. that has been my experience working on the ground around the world. american companies do this kind
of work abroad, they promote transparency, responsible construction, environmental labor standards, we hire and train locally, build worker capacity and advance american values. as a result, you can imagine there are many governments eager to work with team usa, so we have to be competitive. there are options out there for these countries. we can get there by creating a large, vibrant infrastructure market in the united states which is hopefully happening on the hill. this will give u.s. companies a market and opportunities where we can improve and we are innovative and provide cutting-edge solutions and deliver infrastructure that is the envy of the rest of the world. all of this creates credibility and confidence in american companies. we can bring attentional customers here and show them what has actually been done and built. a counterexample is china.
the chinese have used their home market effectively to expand rapidly and build up their skills and infrastructure and then went out and tried to dominate the world market. think about the fact that act was regularly one of the top 10 global contractors measured by revenue up until recent years. today, there are no u.s. companies in the top 10 contractors globally and seven of the top 10 firms are chinese, state-run enterprises. the world sees the u.s. falling further behind when it comes to infrastructure. if we cannot do large-scale infrastructure at home, how can we expect other countries to do it there with them? consider china is currently building 17 nuclear power plants. we are building just one in the united states. yes, a strong bipartisan infrastructure plan will provide a boost to help u.s. companies regain a global footing and
compete more effectively abroad. matthew: there is a lot in there that we want to come back to, including the china dimension. this was out trying to offer an alternative to the belton road initiative china has offered. the audience is welcome to submit questions. there should be a link low your screen. you are welcome to submit questions and we will try to take some at the end of the discussion. jonathan: i know we will hopefully return to this question as to what the competition is like for u.s. companies on the ground and the problem the chinese model presents, the lack of transparency and lack of risk mitigation is all character areas asians of a different way of delivering infrastructure. i do want to turn to ambassador barshefsky.
you cochaired this task force on global infrastructure we convened about two years ago. one of the major recommendations , the very first recommendation at the top of the list was the u.s. needed to articulate its own positive economic decision. there was a time when this sort of u.s. plumas he was spent criticizing what others are doing and maybe not enough providing positive alternatives. are we starting to see that vision take shape, particularly with this announcement of the build back better world partnership? amb. barshefsky: it's a pleasure to be here and to put a plug-in for jonathan's new book, it is terrific. the topics we will be discussing during this hour, congratulations on that. let me say as a scene setter,
the u.s. has long supported international development, including the development of infrastructure, starting with the marshall plan, with which you are all familiar. it's a lot of money, but a tiny percentage of our budget, which is unfortunate. what we see generally is in specific projects like power africa and so on, when u.s. money goes in, it is a force multiplier. private capital will often follow. as will capital from other countries. i think the u.s. population generally continues to support infrastructure assistance and humanitarian bases. there are five things that have
happened that have challenged what have traditionally been leadership in this area, certainly leadership in the west. first is the global need for infrastructure is astonishingly high. it is estimated in the next 15 years, as much infrastructure will be built as in the world today. that is by no means the finish to the infrastructure need. second is china's belton road initiative, which mr. hadley has often said is the grandest of grand strategies on the part of china. it meshes a global need, which is extraordinary, with china's status as an exporter of capital. the u.s. and western europe --
our importers and china is an exporter. and china's ambitions. these factors are meshed together in what on the part of china is an extremely astute program. keeping us out of the projects makes sense. we see this happening with countries vying for infrastructure attention from china and those new linkages mean new relations and potentially upending of existing relationships or at least having 254 relationships we once thought were pretty secure. the result is u.s. interests are impacted from national security, economic security to more granular things like the development of standards in the technology space and so on.
last, this goes out, this happens whether we are there or not. for the u.s., it is necessary to maintain leadership, to maintain our position in the world, and if we are to maintain a world for u.s. interest, it is critical that the u.s. be a player in this, a sensible player. we cannot replicate what china does and we shouldn't, but we need to be a player in this. the question is how do we play and with whom. it is a positive initiative. there's no question about that. and it will focus on climate health and gender equity, which
i hope means education because the u.s. has a competitive advantage in education and we ought to be deploying that effectively. like universal literacy. but the how we do this is, to my mind, a big question. good to see the g7 working constructively together. there's very little detail here. it's unclear if there is much new money that has been allocated to this venture. the catalyzing of private capital with which other speakers are more expert than i requires a lot of work and will require multilateral, bilateral inventive mechanisms to change
the reward structure because infrastructure investment is often risky even in the best of circumstances. but many countries do not present that circumstance. the question is what return do you expect given the degree of risk? the question would be insurance or other mechanisms to rebalance that risk-reward structure. i don't know whether this initiative will ultimately come together to be an effective response to the infrastructure need. put aside response to china. the focus to the west ought to be the response to infrastructure need in areas in which the west is uniquely situated to provide a response. the areas in the build back
better initiative are areas where the u.s. is able to provide assistance most especially on technology, most especially on health care and education. these are areas of great western strength. but, i will say for my money, i would love to have seen the rollout of a vastly accelerated vaccine distribution system and process than anything else because if one is looking at soft power, if one is looking at leadership, if one is looking at genuine confidence holding measures, particularly confidence in the west, there's no better advertisement than vaccines and their efficacy. it would have been dazzling to see an initiative beyond the
billion doses committed. i will leave it at that. i think it's a good start, but there will have to be a lot of flesh on the bones. matthew: let's to follow up there. let me bring stephen to the conversation. one of the other recommendations we made was the united states work with its allies and partners in this area of infrastructure investment. that has been a major theme of the biden administration in its first six months in office, that we will work with allies and partners on a variety of issues. do that cooperation as important , gaining momentum and what challenges do you see? thank you for that and i'm grateful to be able to join such a distinguished panel and talk about such an important subject. basically, there has been real
progress in terms of cooperation between the united states, its friends and allies. the first aspect which is important, and one of the things we talked about in our report is to get a consensus around high standards for quality infrastructure. it needs to be transparent, it needs to not feed corruption, it needs to be sustainable fiscally, socially, environmentally, it needs to produce resilient infrastructure that benefits the people in the country in which the infrastructure is built. there has been a real progress in getting a consensus among the united states'friends and allies. we sought at the g20 meeting where the meeting of 20 nations agreed on a set of principles for quality infrastructure and interestingly enough, that included china, which is a good
start. efforts that have linked together the eu and japan on common standards. something that csis and jonathan, you and matthew have been supportive of is this blue. -- blue dot network to establish criteria and be able to certify projects as meeting the high standards of quality infrastructure. this is a good step, progress toward common standards. the second thing we saw coming out of the g7 which is let's have common standards but let's put our back into it and resources in it and start the link projects in the developing
world that meets the standards. a lot of good rhetoric, a lot of good framing and reaffirmation of principles coming out of the g7 statement and this great build back better world phrase. but that turns out to will depend and one of the things that was important as they emphasized the importance of mobilizing private capital for success. let me give this example ended comes out of materials csis put together. the need is great, as charlene mentioned, and the need is basically $28 trillion of infrastructure funding through 2030 in asia alone. $26 trillion. the chinese belton road initiative promised less than one trillion. so you see a huge funding gap and it's not going to be built by governments. between 2015 and 2019, g7
countries provided $113 billion in additional assistance for foreign infrastructure progress. government funding, great to have it, nothing near what is required. what's required is the private sector. the same g7 countries have $110 trillion in private assets. pension funds and mutual funds, sovereign wealth funds, the trick is going to be can we get that money off the sidelines into infrastructure projects? in that same time, only $22 billion of that went into infrastructure projects. you can see the and norma's potential. the projects need to be structured in such a way that they are attractive to the private sector. a lot of people think the key thing will be for the government to cover first a small amount of
money in the project, not fund the whole thing, put a small amount of upfront money, guarantee against first loss and provide initial expenses and bring those private sector funds off the sidelines into the infrastructure efforts in developing world. if the g7 initiative can accomplish a common u.s. and ally strategy to do that, we will have made a real difference for building infrastructure in the developing world. matthew: i think steve did my job there for me to underscore the importance of mobilizing private finance. i want to turn to marcie, who has more expertise than all of us combined and leading one of the largest pension funds. sometimes when we are talking
about investing in global infrastructure, some people say we have this infrastructure at home, what is in it for us to invest overseas? can you explain the mission of calpers and how investing in global infrastructure fits into that mission? marcie: thank you. great question and a pleasure to be part of the panel today. calpers, as indicated earlier, we are the largest u.s. public pension plan. we rank number 10 globally. we run an asset portfolio of about $470 billion. that's the current valuation on that portfolio as of the end of june. calpers has a dual mission. we are responsible for delivering pension benefits to about 2 million california public sector workers. we are the second largest health care purchaser beyond the
federal government with about 1.6 million covered there. our investment office, managing that folio has to do that efficiently in a very risk-aware manner to generate those returns that sustainably pay benefits over decades. we are an evergreen fund and have to think about risk and return, not just in one, 3, 5 years but over several public-sector lifetimes. our ability to deliver on that is defined by numerous factors. one is delivering on the expected rate of return. that rate of return went from seven to 6.8. a 6.8% return over that lifetime or decades is a difficult challenge for any public engine fund and i think most funds are somewhere within that 6.52 7.5
expected rate of return. even more importantly, 60% of every pension dollar paid is coming from investment earnings, not contributions. we think about the affordability of the system and to the extent we can have investment earnings makeup a larger portion of that pension dollars being paid, that is certainly part of our strategy and the goal at calpers. we think if infrastructure aligns really well with our long-term liability because infrastructure, being long-term in nature, we believe there is a good alignment of interest there. we have income-oriented returns and predictable cash yields are important as well. we believe it is an ideal asset class for pension funds. i like calpers for any other
pension fund in the u.s. or outside. the outside opportunity is larger internationally and domestically. some of the good news coming off of capitol hill will give us another opportunity to look domestically. the underwriting and due diligence are more globally. our current investments are done in developed countries. on the public equity side, we have exposure across nearly all the markets. we are a universal owner and have moved up the capital structure most recently, but we see benefits in investing in global infrastructure not only on its own merit but as a long-term investor, we have a vested interest in the acceleration of global growth and trade. by investing in global infrastructure, we see the ability to win in the near term and also building a more substantial foundation to drive long-term returns in our
portfolio. businesses across the world benefit from infrastructure benefits. we really want to be an asset owner that is in their financing. that 6.8 return expectation does provide a challenge. charlene mentioned the risk-rewards, balancing that foreign investor like calpers, we are extremely aware of the environment of doing this, in particular in developed economies. i could talk in the second question about how we would look at developing countries differently than we would look at fully developed countries and putting that capital into play today. matthew: i do want to follow up in the second round, but let's do one more round in a slightly different order and we remind the audience we have good
questions coming in. we do want to take a few of those after we've had a chance to question the panelists. let me go back to charlene. you are proving your versatility by illuminating remarks on infrastructure. but you are really a trade negotiator, that is how i think of you. i want to make a connection here because you have cochaired a couple of different efforts. one worked on how the u.s. can engage in the indo pacific region, a critical region of the world where half the world's population gdp trade for plus or minus happens. it is china's back yard and where a lot of these infant -- this infrastructure story is playing out. but famously, the united states pulled out of the transpacific partnership. the main tip of this peer of our engagement in that region economically -- it does not look
like we are going back. the biden administration seems lukewarm, that's probably eight generous term. they are not interested in looking at it right now. is this infrastructure story a good alternative or partial substitute? is it something that's going to help us in that region? amb. barshefsky: that's wonderful question. the answer is no. i'm being a little glib. the infrastructure initiatives were not a substitute for a broad-based, executable accelerated, as it should be, trade program. if you think of the infrastructure we are talking about and other reports on
felton road, infrastructure projects are complicated. they are geographic in nature, often country-specific and customizable. they have a political risk to operational risks that are subject to financial risk. subject to contract disputes, to labor that needs to be up skilled or replaced, which is what china tends to do. there is a shortage of bankable projects at this point, frankly. so this is not a deployable resource the way you might export widgets, for example. in addition, you look at the
build back better initiatives that are out there, these are consortium projects. when you think of the trade agenda, we have trade arrangements, we have free trade agreements and so on, it would be attractive to g7 or g20 countries. >> it can lament an activist agenda. think for a minute about ict. what runs to every single one of these infrastructure projects? build back better, the trade and take counsel, all of the various
initiatives, different combinations. if you look at ict alone, you could imagine a robust ict infrastructure plan would enhance trade in heartland, software, in a variety of services apart from software. as well as construction, many aspects. it is complicated to do. it is hundreds of billions of dollars in upgrades. hardware, software, base stations, networks, phones, computers. the upgrade alone is of norma's proportions, let alone --
enormous proportions, let alone the wiring. that can supplement a trade agenda. it can build partnerships and alliances the way a trade agenda might. it is business that is repeatable. the many aspects of ict that are recurring revenue. the important exports represent recurring revenues to companies. there are supplemental he -- small mental benefits one could get on the -- supplemental benefits one could get on the trade side on infrastructure initiatives. it is logical. it is now substitute -- no substitute. for the u.s. has to play in asia, the u.s. has to have a trade strategy with asia. if the asian countries, there is
no substitute for it. the u.s. having put together ppp and walked away from ppp has left what would have been an ideal device for the u.s. to have robust, sustainable, recurring and growth oriented investments. in asia that does not -- in a way that does not exceed the territory to china, since they are already department entree for china -- dependent on china for trade and finance. why do you rob banks? because that is where the money is. the global growth we expect in the next decade will be from. asia -- from asia.
it is where we should be playing on the infrastructure side. one is not a substitute for the other. >> let us dig into this competition on the infrastructure side. i want to turn to brendan, your company is competing in markets around the world. there was a take three or so years ago among foreign policy people regarding what we should be doing. they said we are not in the infrastructure game, we do not do that anymore. that is not true. give us a little bit of caller for what that competition -- color for what that looks like on the ground. brendan: thank you. the punchline is going around the world and trying to pitch a team usa solution of which sometimes it is part of that.
go around the world and try to pitch an american value proposition around the world, particularly the developing world. it is not a level playing field. those who have the highest probability and -- at succeeding are the companies that are state backed. they could be aggressively state sponsored and supported. every other country that we are competing with, they view infrastructure as a strategic instrument of stock power and predicting value abroad. they support that with aggressive policies. some are more over, some are more subtle. the most clever ones you there export credit agencies, the development finance equivalents, the dramatic services in a way that there is ethical, government approach of promoting
their national options. our competitors are able to offer financing more quickly and with more flexible terms which are more convenient for other national governments than we are. that is despite a great effort from our colleagues at the dsc. those institutions are hamstrung. we need people who are nominated to run them which would be a first start. the second thing would be to give them enough flex ability they could operate the way other leading institutions like from the u.k. and europe operate. the team usa solution should be such a slam dunk. we are getting a smoke right now. we have access to the deepest capital markets in the world. we do not need national
champions, we have such great companies that do what we do. the state department, they do not have to pick winners and losers. they does have to great a level playing field so american companies can compete. when we compete in places like kenya, we are able to offer infrastructure at a much lower cost than other countries can. we cannot compete with them when it comes to the whole government support and export, import credit. i am with charlene, as part of build back better, we are never going to outspend china. that is not a sustainable solution. i would not advocate for that. in the private sector, particularly private capital market and firms that have a
tempo -- different profit proposition. american values of free and open access to market, engaging local people with their own resources, providing training to local people, building local capacities so that when you are gone he could build not just a project but a legacy. that is what team usa is all about. >> charlene mentioned that brendan said there was a council of four relations, brendan was on that commission. i commend that to everybody. thank you for that brendan, we are getting questions related to all of this. there is a theme emerging which we will come to in a second. marcy -- marcie, now that we
have the plan build back better, they're going to mobilize revit capital and include you -- mobilize private capital and include you. we want you to go out there and start investing in some of this infrastructure, to show it is happening and working. what are you going to say back to them for what you need from them to mitigate the risk reward benefits you were talking about earlier? marcie: the areas of consideration are if we are talking about investing and developing infrastructure projects. political stability, anticorruption processes that would be an area that we would have to be mitigating a policy against or investment from our own government to assist private capital investors. second would be transparency of laws, regulations.
third, the effectiveness of the judicial system to enforce them. we have currency risk concerns. we have relit tory settings impact -- regulatory settings impact investors. i mentioned management of the currency risk, credibility, we have counterparty risks there. human capital risks, we are not worried about human capital issues particularly related to modern slavery, physical safety of employees. we have had an infrastructure -- where people on that project have been kidnapped. we would be worried about the reputational risk. we worry about -- to be successful here, stakeholder communication would need to
happen. it would need to be significant, stakeholder activism on this, more that those are in our elected officials on capitol hill, how they promote these policies and get them past --passed. how you make credit -- private capital sustainable in the case of our pension fund? it cannot be freight. we expect a 6.8% return on our money. on the deployment, support from g-7 environments and governments is helpful to provide adequate structure for private financing. the first position that stephen mentioned will be something we are looking for as well. also the clearing house, who is going to clear these projects? fitting those opportunities --
vetting those opportunities. some of this has been tried throughout history. we have an opportunity here, we want more investment. we are looking at moving some of our capital away from domestic over to international. that is something we reported out to our board. it is a sub asset class, the infrastructure is our highest performing sub asset class. the 1, 3-year three year, and five year. we are interested in financing products but that risk-return balance has to be in the right shape for us. matthew: thinking about how we make the most of this opportunity, this is related to something brendan was just talking about. a whole government approach.
steve, you are a former national security adviser, you know intimately how the interagency process works. if you are to make a list of all of the u.s. agencies with capabilities related to infrastructure, it is quite long. we have mentioned xm, commerce, u.s. tda, dod has important equities in this as well. the transportation department has expertise. do you think we are organized from a u.s. government perspective to do this work effectively? stephen: not at all. i think it was important what brandon said -- brendan said. the chinese have a strategy for global infrastructure. they have an initiative.
it is the whole of government and society approach. we do not. it should not be because we need one because china has one. we have historically led in the developing world and helping the developing world move towards a more prosperous future. that is our brand. we are not leading in it. the first thing that needs to be done is to develop a strategy. we talked about it in the report . this team we had on. when you step back and do an inventory of the infrastructure projects in the developing world and decide which are important to us. because of geography or what the project is about, things like energy, water, infrastructure communication technology -- information medication technology. there are some areas that we have real expertise.
let us prioritize, let us identify for our contractors and private financers. what are the kind of artist that are important to the country from a national security perspective? let us sit down and figure out, define what is is we need to do -- what it is we need to do and incentivize and enable the private sector to take money and put it into the infrastructure projects. let us fix these problems that have been identified. we are not doing that. then, the third step, we need to look at our institutional structure. every time we have had a major crisis terrorism, pandemic, we have done reorganization of the government. we put in assets and developed a
real adequately resourced strategy for dealing with the problem. that is what we need here and we have not done it. if i was the national security advisor, you need somebody put in power by the president to undertake that effort. to develop a strategy, recommend how the government can reorganize itself, and limit the strategy, how to bring in the private sector. we talked about in our report, a presidentially appointed and assisted to the president and deputy director of the economic counsel for global infrastructure. give that person the duty of solving the problem and organizing the government and department to go after it. that is what is required. we are not anywhere close to that today. matthew: this is an
organizational challenge, one that the u.s. is not suited to. i have worked in the white house a couple of times, i cannot answer that. we need better ordination. let us go to -- ordination. -- coordination. let us go to questions. another scene that is emerging that i want everyone to comment on, a lot of people are asking what is in it for the people up in country? we offer things that are more expensive, take more time, and assessment of standards and so forth. the setting of high standards. what is the incentive for the recipients over to bilby goodreads take up -- of developing countries to take up? that is a question i would like everybody's thoughts on. there is a specific question and
hear about do you expect or depend on the u.s. government to pull in private financers for products or do you look for private financing yourself? if you could talk about the financial side of this story. brendan: first part of the question, i respectfully reject the premise of the question. that a team usa solution cost more, takes longer, i do not accept the premise of that. we have proven with -- on a net value basis, when you talk about the life value of an asset, we have high quality infrastructure and at a lower cost. with the local people who should be part of developing their own infrastructure. when we are done, we have left behind a local contracting community and engineers, project managers of the future who
oftentimes come back and become the ministers in those countries. that is part of what we wake up in the morning wanting to do. that is the place we start from. that is the value proposition. it is a different value proposition from our international competitors. i would say on the financing side of this, it is a mix of both. in some cases, you need, you have a host government that is competing different government agreements and solutions. they want wrapped in the flag of different nations with government to government agreements. we need some level of government support and a seal of good housekeeping. some demonstration of u.s. government equity or financing of -- as proof of that good housekeeping.
i think with any great american company, we are not asking for special treatment, let us compete. we will win. there are other parts of the world where if you are able to attract private capital you may not need the u.s. government financing. it is still helpful to have the local u.s. ambassador saying this is a trustworthy company, i am here if you have an issue with the relationship. it helps, it is not a requirement to have the u.s. government financing. jonathan: let us turn to charlene. about setting priorities. encouraging actually, we had a discussion with usg and allied
officials. they are thinking about this. how do we get more specific priorities geographically, tutorial it, something i continue -- did poorly -- dictatoriall something i continue to think we were well ahead of. i wanted to ask, how is the pandemic affected your assessment of that, where do you see this fitting among u.s. priorities? amb. charlene: do think after a year and a half you would remember. the ict in particular digital sector, is critical. it is the backbone. it is the backbone of industry,
services, it is what creates data flows. those data flows are the backbone of artificial intelligence. these systems are crucial. you do not have a future economy if you do not have sophisticated infrastructure with respect to the digital economy. the u.s. obviously has a competitive advantage with respect to it. we do not offer a full fleet of services. we did not offer a full fleet of hardware, software, and so those issues which i do think are important to the build back better and other programs need to be resolved. i would have loved to received vaccines, more robustly coming out of the center.
i also would have loved to have seen the announcement of a business consortium between u.s., japanese, and european companies who had vies -- divide -- devised a turnkey on digital infrastructure. guess who is going to build it? no government is building this stuff. that would have been a spectacular. and highly competitive and highly can siebel -- desirable in many countries. covid underscores the importance of digital priorities in two respects. connectivity is everything. it is your work, it is your entertainment, it is your friends, it is your tormentor. we all know. it is the acceleration of all of the underlying technologies
leading to this explosion in connectivity. that is so dramatic and so important. one lesson out of covid is that trends you thought would take five or 10 years are here now. if you are not ahead of the game, your behind the game. -- you are behind the game. also china's bri initiative. you have extraordinary wealth lost in the developing field, high debt level, inability to service debt across the board, and debt and credit workouts that have to be done for so many of these countries including many of the countries there which dina has invested.
-- china has invested. that will happen over time. china will pull back on some of the more capital-intensive projects for a time. what that means, given that bri is in the constitution and is xi jinping's key initiative. china will double down on the digital economy. it is a more cost-effective way to proceed, the returns are great. you do not need as many chinese on the ground which has become controversial in many countries who feel their top opportunities have been taken. it is a different profile altogether. in the face again of extraordinary need, we see that china may be explicitly positioned to pivot even more toward the digital economy.
one of many areas it offers a turnkey solution. and may not be the best solution, it -- it may not be the best solution. the only other thing i would add if i might, you have a lot of silent initiatives going on in the united states and other countries. we have build back better in the united states, our own infrastructure initiatives and a whole re-think of the supply chain. you have the same thing going on in europe and japan. if you think about supply chains, they create infrastructure. they create their own ecosystems. their own transport networks.
there ought to be some thinking about taking disparate initiatives, squeeze the water out, and see what you really have left. that is something flexible enough to cover a variety of needs in the west, supply chain reorientation and sustained developing countries and working with friends and partners. putting that all together in a more readily executable way. that is something to think about. it also impacts the digital supply chain. matthew: just to jon, he is doing a book. we have reached the end of the hour. for these conversations, we
never have enough time. i want to be respectful of our panelists and are honest -- audience -- and our audience. thank you for your contribution to this subject. we appreciate you joining us. to everyone listening on a hot friday afternoon, we hope you enjoyed this. we will be putting the video up on our website soon and you will be able to rewatch it. i'm going to rewatch it so i can make try understood every point that was being made. we are to continue doing work in our infrastructure project here. stay tuned for more from csa on this important matter. please come back and join us again. ♪ >> c-span washington journal, we
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