INSUBCONTINENT EXCLUSIVE:
The Belt Road initiative seeks to build a modern-day Silk Road connecting China by land and sea to Southeast Asia, Central Asia, the
Middle East and Europe"Fortunately, we know that China's leadership is aware of these potential risks - as well as the proven strategies
that can help address the challenges," Lagarde said.President Xi Jinping's Belt and Road Initiative, unveiled in 2013, aims at building a
modern-day Silk Road connecting China by land and sea to Southeast Asia, Central Asia, the Middle East, Europe and Africa
China has pledged $126 billion for the ambitious plan.In his opening speech to the annual Boao Forum on Tuesday - Asia's equivalent of Davos
- Xi said Belt and Road pacts had been made over the last five years with more than 80 countries and international bodies.Lagarde said the
initiative can provide much needed infrastructure financing to partner countries, but should not be considered "a free lunch" by those
nations.Belt and Road ventures can lead to a "problematic" increase in debt, potentially restricting other spending as debt service
obligations rise, which could create balance of payment challenges.In countries where public debt is already high, careful management of
financing terms is critical, in order to protect China and partner governments from entering into pacts that will cause financial
difficulties in the future, Lagarde warned.
