Group of Seven leaders on Sunday pledged to raise $ 600 billion in private and public funds over five years to fund the necessary infrastructure in developing countries and counter China’s older, multi-trillion-dollar Belt and Road project.
US President Joe Biden and other G-7 leaders unveiled the newly renamed “Partnership for Global Infrastructure and Investment” at their annual meeting held this year at Schloss Elmau in southern Germany.
Biden said the United States 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 as well as improve global health, gender equality and digital infrastructure.
“I want to be clear. It’s not aid or charity. It’s an investment that will pay off for everyone,” Biden said, adding that it would allow countries to “see the concrete benefits of partnering with democracies.”
Biden said hundreds of billions of additional dollars could come from multilateral development banks, development finance institutions, sovereign wealth funds and others.
Europe will mobilize 300 billion euros for the initiative over the same period to build a sustainable alternative to China’s Belt and Road Initiative scheme, launched by Chinese President Xi Jinping in 2013, European Commission President Ursula von der Leyen, told the meeting.
The leaders of Italy, Canada and Japan also spoke 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 countries are also participating.
China’s investment scheme involves development and programs in more than 100 countries aimed at creating a modern version of the ancient Silk Road trade route from Asia to Europe.
White House officials said the plan had little tangible benefit for many developing countries.
Biden highlighted several flagship projects, including a $ 2 billion solar power development project in Angola with the support of the Department of Commerce, the US Export-Import Bank, the US firm AfricaGlobal Schaffer and the US project developer Sun Africa.
Together with G-7 members and the EU, Washington will also provide $ 3.3 million in technical assistance to the Pasteur de Dakar Institute in Senegal, as it develops an industrial-scale flexible multi-vaccine manufacturing facility in that country that will eventually COVID-19 can produce and other vaccines, a project that also involves the EU.
The US Agency for International Development (USAID) will also commit up to $ 50 million over five years to the World Bank’s Global Child Care Encouragement Fund.
Friederike Roder, vice president of the non-profit organization Global Citizen, said the promises of investment could be a “good start” to greater G-7 involvement in developing countries and could support stronger global growth for all.
G-7 countries average just 0.32% of their gross national income, less than half of the 0.7% promised in development aid, she said.
“Without developing countries, there will be no sustainable recovery of the world economy,” she said.