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G7 aims to raise $600bn to counter China’s Belt, Road

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By Flowerbud News

June 27, 2022

The Group of Seven leaders (G7) pledged to raise 600 billion dollars in private and public funds over a five-year period to finance needed infrastructure in developing countries.

U.S. President Joe Biden and other G7 leaders re-launched the newly renamed “Partnership for Global Infrastructure and Investment,’’ at their annual gathering held on Sunday at Schloss Elmau in southern Germany.

Biden said the United States would mobilise 200 billion dollars in grants, federal funds, and private investment over five years to support projects in low- and middle-income countries that help tackle climate change as well as improve global health, gender equity, and digital infrastructure.

“I want to be clear. This isn’t aid or charity.

“It’s an investment that will deliver returns for everyone.

“See the concrete benefits of partnering with democracies,’’ he said.

Biden said hundreds of billions of additional dollars could come from multilateral development banks, development finance institutions, sovereign wealth funds, and others.

European Commission President Ursula von der Leyen told the gathering that Europe would mobilise 300 billion euros ($317.28 billion) for the initiative over the same period to build up a sustainable alternative to China’s Belt and Road Initiative scheme.

The scheme was launched by the Chinese President Xi Jinping in 2013.

The leaders of Italy, Canada, and Japan also spoke about their plans, some of which have already been announced separately.

French President Emmanuel Macron and British Prime Minister Boris Johnson were not present, but their countries are also participating.

China’s investment scheme involves development and programmes in over 100 countries aimed at creating a modern version of the ancient Silk Road trade route from Asia to Europe.

White House officials said the plan has provided little tangible benefit for many developing countries.

Chinese foreign ministry spokesman Zhao Lijian defended the track record of BRI when asked for comment at a daily briefing in Beijing on Monday.

“China continues to welcome all initiatives to promote global infrastructure development.

“We believe that there is no question that various related initiatives will replace each other.

“We are opposed to pushing forward geopolitical calculations under the pretext of infrastructure construction or smearing the Belt and Road Initiative,” Zhao said of the G7’s 600-billion-dollar plan.

Biden highlighted several flagship projects, including a 2 billion dollars solar development project in Angola with support from the Commerce Department, the U.S. Export-Import Bank, U.S. firm AfricaGlobal Schaffer, and U.S. project developer Sun Africa.

Together with G7 members and the EU, Washington would also provide 3.3 million dollars in technical assistance to Institut Pasteur de Dakar in Senegal as it develops an industrial-scale flexible multi-vaccine manufacturing facility in that country.

The U.S. Agency for International Development (USAID) would also commit up to 50 million dollars over five years to the World Bank’s global Childcare Incentive Fund.

Friederike Roder, vice president of the non-profit group Global Citizen, said the pledges of investment could be “a good start” toward greater engagement by G7 countries in developing nations and could underpin stronger global growth for all.

G7 countries on average provide only 0.32 per cent of their gross national income, less than half of the 0.7 per cent promised, in development assistance, she said.

“But without developing countries, there will be no sustainable recovery of the world economy,’’ she said. ($1 = 0.9455 euros)

Reuters/NAN