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G7 Plans To Raise $600bn to Counter China’s Belt And Road

G7 Plans To Raise $600bn to Counter China's Belt And Road
Photo Courtesy: Reuters

On June 26, 2022, the seven leaders committed to raise $600 billion in private and public funds over five years for financing needed infrastructure in developing countries and China’s older Project, multi trillion-dollar Belt and Road project. Following this, the US President Joe Biden and other G7 leaders re-introduced the newly named “Partnership for Global Infrastructure and Investment” at their event being held at Schloss Elmau in southern Germany. The article contains G7 Plans To Raise $600bn to Counter China’s Belt And Road.

Joe Biden said the US would mobilize $200 billion in grants, federal funds, and private investment over five years to be with the projects in low- and middle-income countries that assist tackle climate change and improving global health, gender equity, and digital equity infrastructure. He added, “I want to be clear that this isn’t aid or charity. It’s an investment which will deliver returns for everyone. It would allow nations to see the concrete advantages of partnering with democracies.” He further said hundreds billions of additional dollars could arise from different sector like, multilateral development banks, development finance institutions, sovereign wealth funds, and more.

Europe will mobilize 300 billion euros for the creativity to create a sustainable alternative to China’s Belt and Road Initiative scheme of Chinese President Xi Jinping launched in 2013, European Commission President Ursula von der Leyen stated. The leaders from Italy, Canada, and Japan also talked about their plans. French President Emmanuel Macron and British Prime Minister Boris Johnson did not attend, but their countries also participated.

China’s investment scheme involves development and programs in over 100 countries to create a standard version of the ancient Silk Road trade route from Asia to Europe. White House officials said the plan had provided little tangible benefit for many developing countries. Mr. Biden highlighted several flagship projects, like a $2 billion solar development project in Angola with the assistance from the Commerce Department, the US Export-Import Bank, US firm AfricaGlobal Schaffer, and US project developer Sun Africa.

However, the EU, Washington will provide $3.3 million in technical support to Institut Pasteur de Dakar in Senegal as it improves an industrial-scale flexible multi-vaccine manufacturing facility in that country that can eventually manufacture COVID-19 and other needed vaccines, a project that involves the EU. The US Agency for International Development (USAID) will commit up to $50 million to the World Bank’s global Child Care Incentive Fund as well.

Friederike Roder, Vice President of Global Citizen, said the investment pledges could be a good beginning toward greater engagement by G7 leaders in developing countries and could underpin more substantial global growth for all. G7 governments, on average, provide only 0.32% of their gross national income, less than half of the 0.7% promised, in development support. But without developing countries, she added that there will be no sustainable recovery of the world economy.

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