The G7 has a new plan to counter Beijing’s influence. Does it stand up?


Predictably, the announcement drew heavy criticism from official Chinese sources. Zhao Lijian, spokesperson for the Ministry of Foreign Affairs said:[W]We oppose the promotion of geopolitical calculations under the banner of infrastructure building and words and deeds that attempt to smear and smear the Belt and Road Initiative.

However, beyond geopolitics, the PGII raises at least four important questions that will need to be answered quickly if this initiative hopes to avoid the same fate as its failed predecessor.

Is the PGII designed to fight against the BRI of 2022? Oh 2018?

The BRI has seen significant changes since its pre-pandemic peak, when multi-billion dollar funding commitments were the norm. Since then, China’s political banks have sharply cut funding for hard infrastructure. As part of this trend, the BRI itself has been redefined away from physical connectivity, to boost digital, health, spatial and interpersonal connectivity.

The PGII also focuses on “climate and energy security, digital connectivity, health and safety, and gender equality and equity”.

Yet its primary focus is physical infrastructure. With this concentration comes the difficulty of getting the money to pay for all this construction. Without the equivalent of state-owned banks, and in a much tighter economy, raising capital to counter the BRI at anything close to its level will be a daunting challenge.

How will everyone work together?

The PGII is a revamp of the Biden administration’s Build Back Better World (B3W) initiative, which emerged alongside the EU’s Global Gateway Initiative and the UK’s Clean Green Initiative.

Now that PGII has been relaunched as a G7 project, how it will interact with the former B3W siblings remains unclear: “We still don’t know if [Biden] integrated the infrastructure investment plans of several countries, or they are just under the same name and make separate independent investments,” commented Guo Hai, a researcher at the Institute of Public Policy of the University of Technology of South China to Guangzhou.

Additional uncertainty arises from the interactions between the various G7 governments and their respective private and public financing institutions.

For example, the EU is officially supposed to provide 300 billion euros (about 318 billion dollars), of which only 18 billion euros (19 billion dollars) will come from the EU budget.

As Benjamin Fox, editor for the Euractiv news site, commented: “In other words, the Commission hopes that the European Investment Bank and the development finance institutions will generate the bulk of lending on the basis of of a small start-up capital.

Will the PGII get entangled in the US government?

The official announcement of PGII by President Joe Biden revealed that the initiative is pre-packaged with a mind-boggling level of governmental complexity. A sample:

“The Secretary of State, Secretary of the Treasury, Secretary of the Interior, Secretary of Commerce, Secretary of Labor, Secretary of Health and Human Services, Secretary of Transportation, Secretary of Energy , the Administrator of the United States Agency for International Development (USAID) and heads of other relevant agencies should prioritize programming consistent with the policy […] The Chief Executive Officer (CEO) of MCC, the CEO of DFC, the Chairman of EXIM, the Director of the Trade and Development Agency (TDA) and heads of other relevant independent agencies are encouraged to toe the same line of effort, as appropriate and in accordance with their respective authorities.

At best, the US government offers an unprecedented set of tools to get things done. However, its many agencies and departments do not necessarily always pull in the same direction. If the announcement is this complex and filled with acronyms, what will the implementation look like?

How to Avoid Mission Creep (and Morality Creep)

Like B3W, Global Gateway and many others, PGII is nothing if not full of good intentions. Biden’s announcement is full of inspiring goals. Simply providing infrastructure, even if that infrastructure is economically and environmentally sustainable, is not enough:

It must also “boost America’s competitiveness by supporting businesses, including small and medium-sized enterprises, in developing infrastructure and technology overseas, thereby creating jobs and economic growth here at home.”

As well as: “maintaining high standards in infrastructure investment and procurement, which protect against bribery and other forms of corruption, better address climate risks and the risks of environmental degradation environment, promote skills transfer, generate good jobs, mitigate risks for vulnerable populations and promote long-term economic and social benefits for economies and communities.

Oh, and also: “aligning the G7 and other like-minded partners to coordinate our respective approaches, investment criteria, infrastructure expertise and resources to advance a common vision and better meet the needs of low- and middle-income countries and regions. ”

These are all certainly laudable goals, but how many projects will emerge intact from this glove of standards? This raises one of the oldest reasons given by African policymakers for working with the Chinese: fewer hoops to jump.

If countering the BRI is the main objective of the PGII, it will have to face the fact that the strict and time-consuming feasibility procedures involved here pose a significant burden for countries in the South, especially the democracies that the Biden administration wants to foster. Projects must be green and sustainable, but policymakers in the South also want them delivered before their next election. Will the PGII be able to free itself sufficiently from all its standards to bring these projects to the field? We will see. Until then, there is always Chinese infrastructure.

Published in partnership with The China Global South project


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