The G7 partnership for global infrastructure and investment will help fund infrastructure projects in developing countries.
The leaders of the group of seven (G7) nations have promised to raise $ 600 billion in private and public funds over five years to fund infrastructure in developing countries and counter China’s older belt and road projects worth many billions of dollars.
US President Joe Biden and other G7 leaders relaunched the newly renamed “Partnership for Global Infrastructure and Investment” on Sunday at their annual gathering held this year at Schloss Elmau in southern Germany.
“Developing countries often lack the essential infrastructure to help navigate global shocks, such as a pandemic, so they feel the consequences more acutely and have a harder time recovering,” Biden said.
“It’s not just a humanitarian concern, it’s an economic and security concern for all of us.”
The United States, he said, will mobilize $ 200 billion in grants, federal funds and private investment over five years to support projects in low- and middle-income countries that help tackle climate change and improve global health, gender equality and digital infrastructure. .
“I want to be clear. This is not aid or charity. It is an investment that will provide a return for everyone, “said Biden, adding that it would allow countries to” see the concrete benefits of working with democracies. “
Biden said that hundreds of billions of extra 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 same period initiative to build a sustainable alternative to China’s belt and road initiative scheme, launched by Chinese President Xi Jinping in 2013, said European Commission President Ursula von der Leyen on the collection.
The leaders of Italy, Canada and Japan also talked 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 country is also participating.
China’s investment scheme involves development and programs in more than 100 countries aimed at creating a modern version of the old Silk Road trade route from Asia to Europe.
White House officials said the plan has provided little tangible benefit to many developing countries, and that it captures recipient countries in debt and with investments that benefit China more than their hosts.
Biden highlighted several flagship projects, including a $ 2 billion solar energy development project in Angola with support from the Department of Commerce, the US Export-Import Bank, the US firm AfricaGlobal Schaffer and the US project developer Sun Africa.
Together with G7 members and the EU, Washington will also provide $ 3.3 million in technical assistance to the Institut Pasteur de Dakar in Senegal as it develops an industrial-scale, flexible, multi-vaccine production facility in the country that can eventually produce COVID-19 and other vaccines. , a project that also involves the EU.
The US International Development Agency (USAID) will also commit up to $ 50 million over five years to the World Bank’s Global Child Care Incentive Fund.
Friederike Roder, vice president of the non-profit group Global Citizen, said that the promises of investment could be a “good start” towards greater engagement from G7 countries in developing countries and could underpin stronger global growth for all.
G7 countries provide on average only 0.32 percent of gross national income – less than half of the 0.7 percent promised – in aid, she said.
“Without developing countries, there will be no sustainable recovery of the world economy,” she said.