The G7 Partnership on Global Infrastructure and Investment will help finance infrastructure projects in developing countries.
Leaders of the Group of Seven (G7) have pledged to raise $600 billion in private and public funds over five years to fund infrastructure in developing countries and China’s older multi-trillion-dollar project ” Belt and Road”.
US President Joe Biden and other G7 leaders on Sunday relaunched the newly renamed “Partnership for Global Infrastructure and Investments” at their annual meeting, to be held this year at Schloss Elmau in southern Germany.
“Developing countries often lack the necessary infrastructure to deal with global shocks like a pandemic, making them feel the impact more severely and making it harder for them to recover,” Biden said.
“This is not just a humanitarian concern, it is an economic and security concern for all of us.”
The United States would mobilize $200 billion in grants, federal funds and private investment over five years to support projects in low- and middle-income countries that fight climate change, improve global health, improve gender equality and contribute to the digital infrastructure.
“I want to be clear. This is not help or charity. It’s an investment that will pay off for everyone,” Biden said, adding that it would allow countries “to see the tangible benefits of partnering with democracies.”
Biden said hundreds of billions of additional dollars could come from multilateral development banks, development finance institutions, sovereign wealth funds and others.
Europe will mobilize 300 billion euros ($317 billion) for the initiative over the same period to build a sustainable alternative to China’s Belt and Road Initiative launched by Chinese President Xi Jinping in 2013, the president said the European Commission, Ursula von der Leyen, the Assembly .
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 taking part.
China’s investment plan includes development and programs in more than 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 brought little tangible benefit to many developing countries, trapping recipient countries in debt and with investments that benefit China more than their hosts.
Biden highlighted several flagship projects, including a $2 billion solar development project in Angola with support from the Department of Commerce, the US Export-Import Bank, US firm AfricaGlobal Schaffer and US project developer Sun Africa.
Washington, along with G7 members and the European Union, will also provide $3.3 million in technical assistance to Senegal’s Institut Pasteur de Dakar to develop an industrial-scale, flexible production facility for several vaccines in that country that will eventually overcome COVID-19. 19 can produce and other vaccines, a project in which the EU is also involved.
The United States Agency for International Development (USAID) will also commit up to $50 million over five years to the World Bank’s global Childcare Incentive Fund.
Friederike Roder, vice president of nonprofit group Global Citizen, said the investment pledges could be “a good start” for greater G7 engagement in developing countries and underpin stronger global growth for all.
The G7 countries, on average, allocate just 0.32 percent of their gross national income – less than half of the 0.7 percent promised – to aid, she said.
“But without developing countries, there will be no sustainable recovery in the global economy,” she said.