The leaders of the G7 nations have revealed plans to arrange $600bn in funding for the developing world. This is a move seen as a counter to China’s Belt and Road plan which has left many countries with heavy debt towards China.
The Partnership for Global Infrastructure and Investment (PGII) relaunched a scheme which was unveiled at last year’s G7 leaders’ talks in Britain. According to the BBC, US President Joe Biden said the plan would deliver returns for everyone. “I want to be clear. This isn’t aid or charity,” Biden said of the G7’s PGII scheme. “It’s an investment that will deliver returns for everyone.”
The scheme would allow countries to “see the concrete benefits of partnering with democracies,” the US president added. The plan aims to have G7 leader invest $600bn over five years to fund infrastructure projects in middle and low-income countries.
The BBC says that the US has promised to raise $200 billion of the total through grants, federal funds and private investment, while the EU has announced a further 300 billion euros (£257bn).
Fighting climate change, bettering global health, achieving gender equity and building digital infrastructure are a few things this initiative is aimed at. Some of the highlighted initiatives according to BBC include, a solar-powered project in Angola, a vaccine manufacturing facility in Senegal, and a 1,609 km submarine telecommunications cable connecting Singapore to France via Egypt and the Horn of Africa.
China’s debt trap
The plan is an initiative to counter China’s Belt and Road Initiative which was launched by President Xi Jinping in 2013 and funds infrastructure projects in emerging countries. China is accused of providing “predatory loans”, forcing debt-saddled nations to cede key assets if they fail to repay their debt on time.
The G7’s infrastructure plan was first revealed at the 2021 G7 summit in England. At that time, it was called the Build Back Better World initiative but faltered due to a lack of progress before being renamed to PGII and reintroduced in 2022 G7 summit.
