At the initiative of US President Joe Biden, the G7 countries agreed on a billion dollar infrastructure initiative for emerging countries. It should be an alternative to China’s “New Silk Road”.

It sounds like a kind of “Marshall Plan” for the world’s poor countries: at the G7 summit in Corbys Bay, major western industrialized countries had a meeting called “Build Back a Better World” (in German: Rebuild a Better World). An infrastructure project. ) decision made. Hundreds of billions of dollars are to be invested by the G7 countries in collaboration with the private sector.

America is the driving force behind the initiative

The project was promoted by US President Joe Biden. It is reminiscent of the billion-dollar infrastructure plan adopted in the United States, which Biden promoted under the slogan “Build Back Better”. It aims to provide “transparent high-quality partnerships” to poor countries, which Biden announced at the end of the summit.

The global infrastructure project of the G7 states is considered an alternative to the “New Silk Road”, along which China is promoting infrastructure projects from Asia to Europe. The People’s Republic has agreed “Belt and Road” projects with nearly 100 countries, including the construction of new rail routes, ports and roads. According to business information service Refinitiv, about 2,600 projects with a volume of $3.7 trillion have already been launched. Critics accused Beijing of entrapping poor countries into debt traps and pushing them into political dependence. With the “Silk Road”, China is pursuing the goal of expanding its geopolitical influence around the world.

A US official called the G7’s new coalition against China’s Silk Road a positive alternative approach that “shows our values, our standards and the way we do business”. It’s not about “countries have to choose between us and China”.

Transparent alternative to “New Silk Road”?

Chancellor Angela Merkel gave less ideological justification for the G7 countries’ infrastructure plan. “We have to deal with the fact that China is running infrastructure projects quite successfully,” he acknowledged. “We can’t just stand and watch.” The G7 group must demonstrate that “we are an important and successful factor in the development work in the world”. He stressed that the project was “not against something, but for something”, namely the expansion of infrastructure, especially in Africa.

The German economy has been demanding for some time that Europe responds to China’s “New Silk Road” with its infrastructure strategy. “If we want to regain spheres of influence in developing countries, criticizing China is not enough,” said Friedolin Strach, head of the international markets department at the Federation of German Industries (BDI). We have to make better deals. ” “Handelsblatt”. German companies usually leave empty handed when it comes to Silk Road projects.

need trillions of dollars

According to Biden, $40 trillion is needed globally to expand and modernize infrastructure. He did not give any details. A preparatory paper for the G7 summit said an additional $1.5 to 2.7 trillion would be needed each year for developing and emerging countries to achieve the UN’s Sustainable Development Goals. In fact, many countries in Africa, Asia and Latin America lack modern roads, rail lines, bridges and ports, as well as water supply, sewage and wastewater treatment facilities.

In the opinion of the G7 Group, the World Bank and other international financial institutions have proved too clumsy in terms of infrastructure projects. This is why national development banks in particular, such as the German Reconstruction Loan Corporation (KfW) or the US International Development Finance Corporation, are now in place to develop and implement projects.

concrete projects only in 2022

It will take a few more months for the G7 countries’ global infrastructure plan to take shape. The first concrete projects should not be started until next year. The new G7 task force for infrastructure projects in developing countries is to make specific proposals in 2022. “I hope we can present such projects at the next G7 summit,” Chancellor Merkel said. Germany will take over the presidency of the G-7 in 2022.