August 19, 2022

The G7 aims to raise $ 600 billion against China’s Belt and Road

On June 26, 2022, US President Joe Biden attends a luncheon with other G7 leaders to discuss shaping the global economy at the Yoga Pavilion in Schlos Elmaw, Guren, Germany. Kenny Holston / Pool via REUTERS

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SCHLOSS ELMAU, Germany, June 26 (Reuters) – A group of seven leaders on Sunday pledged to raise $ 600 billion in private and public funds over five years to finance infrastructure in developing countries and counter China’s multi-trillion-dollar belt and road project.

The newly renamed “Global Infrastructure and Investment Partnership” was re-launched by US President Joe Biden and other G7 leaders at their annual meeting this year in Schloss Elmau, southern Germany.

Biden said the United States will raise $ 200 billion in grants, federal funds and private investment over five years to support projects in low- and middle-income countries that will help tackle climate change and improve global health, gender equality and digital infrastructure.

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“I want to be clear. This is not aid or charity. It’s an investment that will bring income to all,” Biden said.

Biden said hundreds of billions of dollars could come from multilateral development banks, development finance companies, sovereign property funds and more.

European Commission President Ursula van der Leyen told the gathering that Europe would mobilize 300 300 billion for the initiative over the same period to create a sustainable alternative to China’s Belt and Road initiative, introduced by Chinese President Xi Jinping in 2013.

The leaders of Italy, Canada and Japan also talked about their plans, some of which have already been announced separately. French President Emmanuel Macron and British Prime Minister Boris Johnson did not attend, but their countries do.

China’s investment plan includes development and projects in more than 100 countries aimed at developing a modern version of the ancient Silk Road trade route from Asia to Europe.

White House officials said the plan has yielded some tangible benefits for many developing countries.

Biden highlighted a number of major projects, including a $ 2 billion solar development project in Angola, supported by the Department of Commerce, the U.S. Export-Import Bank, the US company Africa Global Schaefer and US project developer Sun Africa.

Together with G7 members and the EU, Washington will provide $ 3.3 million in technical assistance to the Institut Pasteur de Dakar in Senegal, which will create an industry-wide flexible multi-vaccine manufacturing facility in the country that could eventually develop COVID-19 and other vaccines, including the European Union. Project.

The United States Agency for International Development (USAID) will provide $ 50 million over five years to the World Bank’s Global Child Care Promotion Fund.

Friederike Roder, co-chair of Global Citizen, a non – profit group, said the G7’s investment commitment to greater involvement in developing countries would be a “good start” and lay the foundation for strong global growth for all.

G7 countries contribute only 0.32% of their gross national income on average, which is less than half of the promised 0.7%, in aid of growth, he said.

“But without developing countries, there will be no sustainable recovery in the world economy,” he said.

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Report by Andrea Shalal; Editing by Mark Porter and Lisa Schumacher

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