Biden, G7 leaders announce $600bn investment in global infrastructure to counter China

US President Joe Biden and Group of Seven (G7) leaders leading democratic economies on Sunday formally launched their global infrastructure partnership, aiming to counter China's influence in the developing world. According to the statement released by the White House, leaders of the G7 will invest $600 billion in order to boost the infrastructure. It said that G7 leaders will formally launch the Partnership for Global Infrastructure (PGII) to mobilise hundreds of billions of dollars and deliver quality, sustainable infrastructure that makes a difference in people's lives around the world. Notably,  the G7 comprises Germany, France, Britain, Italy, Japan, the United States and Canada. 

The leaders said that the hefty amount will help in accomplishing strengthening and diversifying supply chains across the globe besides creating new opportunities for workers and businesses. "Together with G7 partners, we aim to mobilise $600 billion by 2027 in global infrastructure investments. And this will only be the beginning. The United States and its G7 partners will seek to mobilise additional capital from other like-minded partners, multilateral development banks, development finance institutions, sovereign wealth funds, and more," according to the statement. 

Notably, the fund will counter China’s so-called Belt and Road Initiative, which Western officials have long argued traps receiving countries in debt and with investments that benefit China more than their hosts. While elaborating on the source of funding, the statement said it will come from the private sector, sovereign wealth and global development funds, rather than direct taxes collected from the citizens. As per the plan, among the first initiatives are a $2 billion solar farm investment in Angola in Southwest Africa, $320 million for hospital construction on Ivory Coast, in West Africa, and $40 million to promote regional energy trade in Southeast Asia.

Several key projects announced at G7

The project will include solar mini-grids, solar cabins with telecommunications capabilities, and home power kits. In addition to supporting up to $1.3 million in US exports, the project will help Angola meet their climate commitments, including generating 70% carbon-free power by 2025. Besides, the statement also revealed that the United States Agency for International Development will invest $40 million in Southeast Asia’s Smart Power Program with an aim to decarbonise and strengthen the region’s power system by increasing regional energy trade, accelerating the deployment of clean energy technologies, and actively engaging private sector leaders and key development partners in shared priorities. 

"In addition to U.S. support, like-minded partners are investing including $35 million from the German Development Finance Institution, $30 million from the European Investment Bank, and $15 million from British International Investment, among others. Through this investment, DFC expects to mobilize $78 million in private capital," according to the White House statement. It is worth mentioning the leaders of G7 countries, including US President Joe Biden, UK PM Boris Johnson and five others landed in Germany and have been holding a meeting at Schloss Elmau, a castle resort in the Bavarian Alps in southern Germany. Notably,  the G7 comprises Germany, France, Britain, Italy, Japan, the United States and Canada. 

Image: AP