G7 leaders unveil $600 billion plan to rival China’s infrastructure initiative in developing countries

G7 leaders unveil $600 billion plan to rival China’s infrastructure initiative in developing countries

Leaders of the G7 have unveiled plans to mobilise $600bn in funding for African countries and other developing economies of the world as part of efforts to counter China’s Belt and Road initiative.

President Joe Biden of the United States said the plan would “deliver returns for everyone” and allow countries to “see the concrete benefits of partnering with democracies.”

Mr Biden spoke at the G7 annual gathering held this year at Schloss Elmau in southern Germany.

Some of the highlighted initiatives include a solar-powered project in Angola, a vaccine manufacturing facility in Senegal, and a 1,609 km submarine telecommunications cable connecting Singapore to France via Egypt and the Horn of Africa.

It remains unclear Monday afternoon whether there are specific intervention projects targeted at Nigeria, Africa’s biggest economy and the continent’s most populous nation, in the G7 plan. The West African nation has in recent times relied on Chinese interventions to build key rail infrastructure.

There have been debates on sustainability issues surrounding Chinese funding of projects across Africa. China’s multi-trillion-dollar infrastructure initiative is often criticised for hitting nations with too much debt.

The new plan calls on G7 leaders to raise $600bn over five years to fund the launch of infrastructure projects in middle and low-income countries.

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The BBC reports that the US has promised to raise $200bn (£162bn) of the total through grants, federal funds and private investment, while the EU has announced a further 300bn euros (£257bn). But the US president cautioned that the intervention was not a charity.

“I want to be clear. This isn’t aid or charity,” Mr Biden said of the G7’s Partnership for Global Infrastructure and Investment (PGII scheme). “It’s an investment that will deliver returns for everyone.”

A White House Factsheet says the Partnership for Global Infrastructure and Investment will deliver game-changing projects to close the infrastructure gap in developing countries, strengthen the global economy and supply chains, and advance U.S. national security.

It added that Mr Biden will announce new flagship projects and lay out the Administration’s comprehensive effort to execute the Partnership for Global Infrastructure and Investment, all as part of moves by the G7 to counter Chinese interventions.

The G7 is an informal forum of leading industrialised nations, which include Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. Representatives of the European Union are always present at the annual meeting of the heads of state and government of the G7.

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Meanwhile, the new initiative will be geared towards tackling climate change, improving global health, achieving gender equity and building digital infrastructure.

The plan has been seen as a way to counter China’s ambitious Belt and Road Initiative (BRI). Launched by Chinese president Xi Jinping in 2013, the BRI provides financing for emerging countries to build infrastructure like ports, roads and bridges. Although it has helped nations like Nigeria develop infrastructure, it has also been criticised heavily as a means of forcing debt-burdened countries to cede important assets if they fail to meet their debt repayments.

In recent times, Chinese interventions in African countries have stalled, leading some countries to abandon major projects, including railways, due to paucity of funds.

A former Nigerian Minister for Transportation, Rotimi Amaechi, earlier in the year hinted that the Chinese stopped funding Nigerian government projects, leading the country to shop for loans in Europe to complete existing jobs.

“We are stuck with lots of our projects because we cannot get money,” he said.

“The Chinese are no longer funding. So, we are now pursuing money in Europe. And when I look at the money they are borrowing in other countries and I compare with the one we have borrowed, the kind of comments by Nigerians will put you off.”

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European Commission President Ursula von der Leyen said the aim of the latest G7 project was to present a “positive powerful investment impulse to the world to show our partners in the developing world that they have a choice”.

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