The West has been skeptical of the Belt and Road Initiative (BRI), since it was launched in 2013 by China, as it was considered to be part of China’s larger strategy to increase geopolitical influence in Asia and other developing countries.
The U.S., along with G7 partners the U.K., Japan, France, Canada, Germany, Italy, and the European Union (EU), had in 2021 announced the launch of the Build Back Better World (B3W) with the aim of narrowing the $40 trillion infrastructure gap in the developing world. Partnership for Global Infrastructure and Investment (PGII) is therefore, a relaunch of USA’s B3W plan.
USA along with his G7 allies unveiled the ambitious PGII, announcing the collective mobilisation of $600 billion by 2027 to deliver game-changing and transparent infrastructure projects to developing and middle-income countries.
The PGII is being seen as the G7’s counter to China’s multi-trillion-dollar Belt and Road Initiative (BRI) to build connectivity, infrastructure, and trade projects in Asia, Europe, Africa, and Latin America.
PGII is a values-driven, high-impact, and transparent infrastructure partnership to meet the enormous infrastructure needs of low and middle-income countries and support the United States’ and its allies’ economic and national security interests.
Four priority pillars for All PGII projects:
- Tackling the climate crisis and ensuring global energy security: G7 grouping aims to tackle the climate crisis and ensure global energy security through clean energy supply chains.
- Bolstering digital information and ICT networks: the projects will focus on bolstering digital information and communications technology (ICT) networks facilitating technologies such as 5G and 6G internet connectivity and cybersecurity.
- Promoting gender equality and equity: the projects aim to advance gender equality and equity
- To build and upgrade the global health infrastructure: The U.S International Development Finance Corporation (DFC), along with the G7 nations and the EU are disbursing a $3.3 million technical assistance grant to build a vaccine facility in Senegal, having a potential yearly capacity of manufacturing millions of doses of COVID-19 and other vaccines. The European Commission’s Global Gateway initiative is also undertaking projects supporting the PGII such as mRNA vaccine plants in Latin America and a fibre-optic cable linking Europe to Latin America among others.
PGII’s counter plan for BRI:
||It was started to revive connectivity, trade, and infrastructure along what was China’s ancient Silk Road. China had announced a two-pronged approach of building a Silk Road Economic Belt on Land and a maritime 21st century Silk Road. The project initially aimed to strengthen connectivity with Southeast Asia but later expanded to South and Central Asia, Africa, Europe, and Latin America, to break the bottleneck in Asian connectivity.
||It has specifically touted the PGII as a values-based plan to help underfunded low and middle-income countries meet their infrastructure needs.
||China has built large coal-fired plants under BRI along with solar, hydro, and wind energy projects.
||PGII has laid focus on climate action and clean energy.
||China’s BRI is majorly state-funded.
||Under the PGII, large private capital will be mobilised.
||The BRI has faced criticism for making countries sign confidential tenders for extending massive loans, leaving countries indebted to China. For instance, after the BRI’s flagship $62 billion China-Pakistan Economic Corridor, Pakistan owes Beijing a large proportion of its foreign debt.
||G7 leaders emphasised ‘transparency’ as the cornerstone of PGII projects.
|Loan vs Grants
||China builds BRI’s projects by extending large, low-interest loans to countries that have to usually be paid over 10 years. There have been cases of debt-saddled countries failing to repay on time. Sri Lanka, for instance, had to cede its key Hambantota Port on a 99-year lease to China.
||PGII aims to build projects through grants and investments.
|Role of India
||India had opted out of China’s BRI, being wary of Beijing’s aim to increase its influence in the Indian Ocean Region by roping in Pakistan as a major BRI recipient.
||In India, the U.S. DFC will invest up to $30 million in Omnivore Agritech and Climate Sustainability Fund 3, an impact venture capital fund that invests in entrepreneurs building the future of agriculture, food systems, climate, and rural economy in India.
By these critical parameters, PGII is seen as the G7’s counter to China’s multi-trillion-dollar Belt and Road Initiative (BRI) to build connectivity, infrastructure, and trade projects in Asia, Europe, Africa, and Latin America.
Infrastructure is critical to driving a society’s productivity and prosperity. When done well, infrastructure connects workers to good jobs; allows businesses to grow and thrive; facilitates the delivery of vital services; creates opportunities for all segments of society, including underserved communities; moves goods to markets; enables rapid information-sharing and communication; protects societies from the effects of climate change and public health crises or other emergencies; and supports global connection among nations.
Initiatives like PGII provide a choice to developing countries to meet infrastructural gaps and can help the Nation to recover from the coronavirus disease 2019 (COVID-19) pandemic.