Group of Seven leaders on Sunday promised to secure $600 billion in private and public funds over five years to fund essential infrastructure in developing countries and counter China’s older, multitrillion-dollar Belt and Road project.
U.S. President Joe Biden and other G7 leaders reinitiated the recently renamed “Partnership for Global Infrastructure and Investment,” at their annual meeting being conducted this year at Schloss Elmau in southern Germany.
Biden said the United States would organize $200 billion in federal funds, grants, and private investment over five years to finance projects in low- and middle-income countries that help address climate change along with boosting digital infrastructure, gender equity, and global health.
“I want to be clear. This isn’t aid or charity. It’s an investment that will deliver returns for everyone,” Biden said, adding that it would enable countries to “see the concrete benefits of partnering with democracies.”
Biden said hundreds of billions of extra dollars could come from sovereign wealth funds, development finance institutions, multilateral development banks, and others.
Europe will organize 300 billion euros for the initiative over the same period to develop a fitting alternative to China’s Belt and Road Initiative scheme, which Chinese President Xi Jinping initiated in 2013, European Commission President Ursula von der Leyen told the meeting.
The leaders of Japan, Canada, and Italy also mentioned their plans, some of which have already been disclosed separately. British Prime Minister Boris Johnson and French President Emmanuel Macron did not attend the meeting, but their countries are also taking part.
China’s investment scheme comprises development and programs in more than 100 countries working towards creating a present-day version of the ancient Silk Road trade route from Asia to Europe. White House officials said the plan has brought small tangible benefits for most developing countries.
Biden called attention to various flagship projects, including a $2 billion solar development project in Angola with support from the Commerce Department, U.S. firm AfricaGlobal Schaffer, the U.S. Export-Import Bank, and U.S. project developer Sun Africa.
Together with the EU and G7 members, Washington will also give $3.3 million in technical assistance to Institut Pasteur de Dakar in Senegal as it establishes an industrial-scale flexible multi-vaccine manufacturing facility in that country that can someday provide COVID-19 and other vaccines, a project that also includes the EU.
The U.S. Agency for International Development (USAID) will also give up to $50 million over five years to the World Bank’s global Childcare Incentive Fund.
Vice president of the non-profit group Global Citizen, Friederike Roder said the pledges of investment could be “a good start” toward larger engagement by G7 countries in developing nations and could support rapid global growth for all.
G7 countries on average contribute only 0.32% of their gross national income, less than half of the 0.7% pledged, in development assistance, she said.
“But without developing countries, there will be no sustainable recovery of the world economy.”
