Alliance against China G7 countries decide on global infrastructure plan
Status: 13.06.2021 6:38 p.m.
At the initiative of US President Joe Biden, the G7 countries agreed on a billion-dollar infrastructure initiative for the emerging countries. It should be an alternative to China’s “New Silk Road”. From Notker Blechner, tagesschau.de It sounds like a kind of “Marshall Plan” for the poorer countries of the world: At the G7 summit in Carbis Bay, the leading western industrialized countries have an infrastructure project entitled “Build Back Better World” (in German: a better world rebuild) decided. Hundreds of billions of dollars are to be invested by the G7 countries in cooperation with the private sector.
The US is the driving force behind the initiative
The project was promoted by US President Joe Biden. It is reminiscent of the billion dollar infrastructure plan adopted in the USA, which Biden promoted under the slogan “Build Back Better”. The aim is to offer poorer countries “transparent high-quality partnerships”, announced Biden at the end of the summit. The global infrastructure project of the G7 states is supposed to be an alternative to the “New Silk Road” with which China is promoting infrastructure projects from Asia to Europe. The People’s Republic has agreed “Belt and Road” projects with around 100 countries, including the construction of new train routes, ports and roads. According to the business information service Refinitiv, around 2,600 projects with a volume of 3.7 trillion dollars have already been launched. Critics accuse Beijing of driving poor countries into a debt trap and into political dependency. With the “Silk Road”, China is pursuing the goal of expanding its geopolitical influence worldwide. A US official called the new G7 alliance against China’s Silk Road a positive alternative vision that “shows our values, our standards and our way of doing business”. It is not about “the countries have to choose between us and China”.
Transparent alternative to the “New Silk Road”?
Chancellor Angela Merkel gave a less ideological justification for the infrastructure plan of the G7 countries. “We have to deal with the fact that China is running quite successfully infrastructure projects,” she admitted. “We can’t just stand by and watch.” The G7 group must show “that we are an important and successful factor in development work in the world”. She emphasized that the project was “not against something, but for something”, namely the expansion of the infrastructure, especially in Africa. The German economy has been demanding for some time that Europe react to China’s “New Silk Road” with its own infrastructure strategy. “If we want to regain spheres of influence in developing countries, it is not enough to criticize China. We have to make better deals,” said Friedolin Strack, head of the International Markets department in the Federation of German Industries (BDI), to the “Handelsblatt”. German companies usually go away empty-handed when it comes to the Silk Road projects.
Trillions of dollars are needed
According to Biden, there is a global need of 40 trillion dollars for the expansion and modernization of the infrastructure. He didn’t give any details. In a preparatory paper for the G7 summit it was said that 1.5 to 2.7 trillion dollars of additional money would be necessary every year for the developing and emerging countries to achieve the sustainable development goals of the United Nations. In fact, many countries in Africa, Asia and Latin America lack modern roads, train lines, bridges and ports, as well as facilities for water supply, sewage and waste treatment. In the opinion of the G7 group, the World Bank and other international financial institutions have proven to be too clumsy when it comes to infrastructure projects. This is why national development banks in particular, such as the German Reconstruction Loan Corporation (KfW) or the US International Development Finance Corporation, are now to develop and implement projects.
Concrete projects only in 2022
It will take a few more months for the G7 countries’ global infrastructure plan to take shape. The first concrete projects are not expected to appear until next year. The new G7 task force for infrastructure projects in developing countries is to make specific proposals in 2022. “I hope that we can present such projects at the next G7 summit,” said Chancellor Merkel. Germany will take over the G7 presidency in 2022.