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G7 touts $600 billion global infrastructure plan to rival China

#touts #billion #global #infrastructure #plan #rival #China

The G7 group of rich democracies on Sunday announced an attempt to compete with China’s impressive Belt and Road Initiative by mobilizing about $600 billion for global infrastructure programs in poor countries.

Unveiled with fanfare by US President Joe Biden and G7 allies Canada, Germany, Italy, Japan and the European Union, the partnership on global infrastructure and investment aims to fill a huge void left as communist China uses its economic clout to extend diplomatic tentacles to the far corners of the world.

Biden said the goal is for the United States to bring $200 billion to the table by 2027, and the rest of the G7 another $400 billion.

Funding the kind of projects China currently dominates — everything from roads to ports in remote corners of the world — is not “aid or charity,” Biden said.

Biden highlighted the geostrategic thinking behind the plan, saying such projects “provide returns for everyone, including the American people and the people of all our nations.”

Around the world, the role played by China’s democratic rivals is “an opportunity for us to share our positive vision for the future” and for other countries to “see for themselves the tangible benefits of partnering with democracies,” he said.

European Commission chief Ursula von der Leyen echoed this, saying: “It’s up to us to give the world a positive, strong investment boost and show our partners in the developing world that they have a choice.”

Although China was not mentioned by name, the rivalry loomed at the leaders’ presentation, a rehash of a first attempt at a western infrastructure fund that Biden drafted during last year’s G7 summit in the UK.

Unlike China’s state-run BRI initiative, the proposed G7 funding would largely depend on private companies’ willingness to commit to massive investments and is therefore not guaranteed.

That’s a good thing, however, according to US officials.

In this capitalist vs. communist scenario, US officials say, recipient countries will be able to sidestep debt traps and other powerful weapons tactics allegedly employed by the Chinese.

– ‘Not too late’ –

By 2027, the US government and its allies will target the $600 billion figure “through grants, federal funding and leveraging private sector investment,” the White House said.

“This will only be the beginning: The United States and its G7 partners will also seek to mobilize hundreds of billions in additional capital from other like-minded partners, multilateral development banks, development finance institutions, sovereign wealth funds and more.”

As the investment target is largely ambitious, a senior US official conceded that the West currently ranks second behind China.

“There is no doubt that the Belt and Road Initiative has been in existence for several years and has made many cash disbursements and investments – and that we come to this after years of their investment,” the official said.

“But I would argue that it’s definitely not too late. And I’m not even sure if it’s too late.”

The official reporters, speaking on condition of anonymity, said “many countries” working with China suffered from buyer remorse, concluding that Beijing was more interested in gaining a foothold economically and geostrategically than the locals to use.

In contrast, “we come to you with an offer to make investments to actually improve your country, improve the economy and have a lasting impact on GDP and your people,” the official said.

“I think that’s the deal that’s being offered.”

While the US-led initiative’s obvious targets are in Africa, South America and much of Asia are also on the radar. The aftermath of Russia’s devastating invasion of Ukraine means “even places in Eastern Europe” could be taken in laps, the official said.

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