G7 unveils partnership for global infrastructure and investment : NPR

G7 unveils partnership for global infrastructure and investment : NPR

President Biden appears with other G7 leaders on Sunday as a summit at Elmau Castle in the German Alps begins. Biden announced a US$200 billion investment in a global infrastructure project by major democracies to counter Chinese investment in developing countries.

JONATHAN ERNST/POOL/AFP via Getty Images


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JONATHAN ERNST/POOL/AFP via Getty Images


President Biden appears with other G7 leaders on Sunday as a summit at Elmau Castle in the German Alps begins. Biden announced a US$200 billion investment in a global infrastructure project by major democracies to counter Chinese investment in developing countries.

JONATHAN ERNST/POOL/AFP via Getty Images

President Biden announced on Sunday that the United States will mobilize $200 billion in investment in global infrastructure projects over the next five years, part of an effort by the world’s major democratic economies to counter the China’s Belt and Road Initiative. Overall investment, including G7 partners and private capital, aims to reach $600 billion over the next five years.

“It’s not aid or charity,” Biden said, flanked by other G7 leaders on the sidelines of the summit in Germany. “It’s an investment that will benefit everyone, including the American people and the people of all our nations.”

The announcement is an official launch and rebranding of what was rolled out last year at the G7 in the UK as ‘Build Back Better World’, a play on Biden’s national proposal which would have reshaped the American economy but foundered in Congress. The effort is now called the Partnership for Global Infrastructure and Investment, or PGII.

For nearly a decade, China has focused on bridges, roads, mines and other hard infrastructure projects in the developing world, the total expenditure of which has been estimated at $1 trillion. , although the actual amount may be higher. The G7 initiative funds projects in four broad categories: clean energy, health systems, gender equality, and information and communications technology.

Investments include the following:

  • $2 billion for a solar project in Angola, including solar mini-grids, home power kits and solar telecommunications to power
  • $600 million to a US company to build an undersea telecommunications cable that will link Singapore to France via Egypt and the Horn of Africa, providing high-speed internet access
  • Up to US$50 million to the World Bank’s Childcare Incentive Fund, which also receives support from Canada, Australia and numerous foundations
  • $3.3 million in technical assistance from the United States to the Pasteur Institute in Dakar for the development of an industrial-scale multi-vaccine manufacturing plant in Senegal that could produce COVID-19 and other vaccines , in partnership with other G7 countries and the EU

“We collectively have dozens of projects already underway around the world,” Biden said, saying this effort will prove that democracies can deliver on their promises, and with fewer strings attached than China-funded infrastructure. “This is a chance for us to share our positive vision for the future. And to let communities around the world see each other, see for themselves the concrete benefits of partnering with democracies.”

The idea is to combine public funding with private capital from pension funds, private equity funds and insurance funds, among others.

“The public sector alone will not be able to bridge the huge gap we face in many parts of the world,” German Chancellor Olaf Scholz said during his address at the launch event.

The idea of ​​harnessing private investment to supplement public funding for needed projects in the developing world is not new. Nor are the major democracies worried about China’s growing influence in Africa, Asia and Latin America. But so far, the results have been mixed at best, says Gyude Moore, Liberia’s former public works minister.

“For nearly a decade, the West has struggled to meet China’s demands [Belt and Road Initiative]. Their scathing criticism of Chinese lending and lending practices was not accompanied by a credible alternative,” Moore said.

He said many developing countries ignored criticism and turned to China. And before the announcement, he was skeptical that the G7 would be able to offer a serious alternative. After the announcement, however, Moore was pleasantly surprised by the extent of the engagement.

“This Global Infrastructure and Investment Partnership is the start of the missing alternative. It is an adequate response both in size and scope. The next challenge will be the details of implementation. “That’s for another day. Today, we congratulate the G7 and applaud American leadership,” said Moore, who now works at the Center for Global Development.

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