During their annual summit in Schloss Elmau, Germany, the G7 announced $600 billion in public and private investments till 2027 to meet the “enormous needs” of developing countries and thereby counter China’s 2013 Belt and Road Initiative (BRI).
Under the newly-launched Partnership for Global Infrastructure and Investment (PGII), United States (US) President Joe Biden has vowed to raise $200 billion to invest in critical areas, such as health and health security, digital connectivity, gender equality and equity, climate and energy security.
Tune in as I deliver remarks with other G7 Leaders to formally launch our Partnership for Global Infrastructure and Investment – an effort that is critical to our economic and national security. https://t.co/I5YzaCRJbU
— President Biden (@POTUS) June 26, 2022
“This isn’t aid or charity; it’s an investment that will deliver returns for everyone,” Biden remarked, adding, “It’s a chance for us to share our positive vision for the future and let communities around the world see for themselves the concrete benefits of partnering with democracies.”
During last year’s meeting in Cornwall, the G7, comprising the US, the United Kingdom (UK), Germany, France, Canada, Italy, and Japan, decided to step up efforts to create a values-driven, transparent and sustainable scheme to “build back better” and had termed China as “a partner, a competitor and a potential systemic rival.” In this respect, European Council President Charles Michel had stressed on striking “the right balance” between engaging with Beijing on global challenges and economic relations, while also defending themselves from potential security risks. He had also particularly emphasised mobilising funds “to secure a win-win strategy for Africa and Europe.”
At #EUAU summit in February, we announced an Africa-Europe Investment Package of 150 bln euros.
— Charles Michel (@CharlesMichel) June 26, 2022
We are investing in many concrete projects. In Africa and with Africa.
The submarine EurAfrica Gateway Cable and the local pharmaceuticals cooperation are good examples. #G7 pic.twitter.com/fojp4Rm70T
Keeping this in mind, Michel welcomed the G7’s announcement of the PGII this weekend, saying, “Our G7 Partnership wants to drive forward infrastructure that is sustainable, inclusive, resilient and high quality, in emerging markets and in developing countries.”
Similarly, German Chancellor Olaf Scholz noted, “The G7 is a good community in which to develop joint solutions in response to the challenges of our time. Here it is crucial for us to take action that is both decisive and united – the two go together.” Germany currently holds the G7 presidency, and has outlined a goal of “progress towards an equitable world.” To this end, Scholz invited five partner countries to attend the summit—Argentina, India, Indonesia, Senegal, and South Africa.
The G7 wants to make the world a better offer on infrastructure investment. Today, we are re-launching our joint work as “Partnership for Global Infrastructure and Investment" - @Bundeskanzler at a side event of the G7 Summit. #G7GER pic.twitter.com/PqTEOdsRfI
— G7 GER (@G7) June 26, 2022
The US has already begun working on several projects in conjunction with private companies, with a special emphasis on Africa. Some of these include a contract to develop a $2 billion solar power project in four provinces of Southern Angola, a $14 million grant to establish a flexible multi-vaccine facility in Senegal, a $600 million submarine telecommunication cable agreement to connect Singapore to France through Egypt and the Horn of Africa. The US International Development Finance Corporation (DFC) will invest up to $25 million in small and medium-sized enterprises, including women-led businesses, in west African countries like Nigeria, Ghana and Côte d'Ivoire. In addition, an American company has pledged to renovate or construct over 100 hospitals and clinics across Côte d’Ivoire as part of a $320 million project.
Furthermore, the Digital Invest programme will raise up to $335 million for internet service providers and financial technology companies in Africa, Asia, and Latin America that use secure network equipment. The US Agency for International Development (USAID) will also commit up to $50 million over five years to the World Bank’s new $200 million global Childcare Incentive Fund, and $40 million to Southeast Asia’s Smart Power programme to decarbonise and strengthen its power system by increasing regional energy trade and accelerating the deployment of clean energy technologies with the help of private sector leaders.
The @G7 stand united as democracies to tackle the world's biggest challenges.
— Boris Johnson (@BorisJohnson) June 26, 2022
🇬🇧🇨🇦🇫🇷🇩🇪🇮🇹🇯🇵🇺🇸🇪🇺 pic.twitter.com/DWEOlZGAO4
The DFC will also provide $30 million “to companies that increase food security and promote both climate resilience and climate adaptation in India, as well as improve the profitability and agricultural productivity of smallholder farms.” Moreover, in an effort to showcase the US’ expertise in the advanced nuclear sector, Washington will give $14 million to Romania to deploy a first-of-its-kind small modular reactor plant.
Additionally, European Commission President Ursula von der Leyen set aside $317 billion under the bloc’s Global Gateway initiative to deliver “sustainable quality infrastructure and health infrastructure.” “Global Gateway is fully at work and we are listening closely to the recipient countries so that we can better understand their needs and deliver the biggest impact,” she noted.
Last year we committed to stepping up investments in sustainable infrastructure.
— Ursula von der Leyen (@vonderleyen) June 26, 2022
Today these investments are more needed than ever.
Europe’s answer is #GlobalGateway.
€300 billion of public and private funds, invested in full transparency and partnership. pic.twitter.com/SORRsFVfMh
Italian Prime Minister (PM) Mario Draghi also highlighted that the World Bank, along with other Multilateral Development Banks (MDBs), aims to secure funds in the energy and health sectors, noting that “Africa is exceptionally suited for investments in renewables” and to build a system that allows vaccines to be produced “in their own land so that the vaccines could be readily available to their people.”
Today, @G7 leaders re-launched our infrastructure partnership. Through this initiative, we’re working together to invest in projects around the world that will promote sustainable development, create economic opportunities, and benefit people everywhere. #G7GER https://t.co/GrRmPZBdzB
— Justin Trudeau (@JustinTrudeau) June 26, 2022
Before leaving for the summit in Germany, Japanese PM Fumio Kishida had underscored that the world was at a “historic crossroads” and that he wanted to engage in “frank discussions” on the Russian invasion of Ukraine, ways to tackle rising commodity prices, climate change, and regional issues, such as the Indo-Pacific, in order to “demonstrate G7 unity to the world.”
The announcement of the PGII comes just a few weeks after Biden launched the Indo-Pacific Economic Framework. Chinese President Xi Jinping responded to such projects this week by warning that protectionist and isolationist moves to create exclusive blocs will have a boomerang effect on Western powers.