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Developing countries: The G7 wants to invest 600 billion dollars to respond to China

PostedJune 26, 2022, 6:16 PM

Western leaders announced on Sunday a gigantic global program to finance infrastructure.

Washington thus arrives at a total of 200 billion dollars by combining loans and public financing.

REUTERS

The G7 put on track on Sunday, at the initiative of the United States, a vast program of investments intended for developing countries supposed to respond to the immense projects financed by China, but with still vague contours.

“Provide quality and sustainable infrastructure”

“With G7 partners, we aim to mobilize $600 billion by 2027 for global infrastructure investments,” the White House said shortly before a speech by Joe Biden unveiling the proposal during of the summit of the seven industrialized countries in southern Germany. The “Global Partnership for Infrastructure” must, according to the same source, “provide quality and sustainable infrastructure”.

And the G7 “has set itself the ambition of making the world a better offer in terms of investment in infrastructure,” said German Chancellor Olaf Scholz, presenting the project alongside the American president.

REUTERS

The United States alone promises to “mobilize” some “200 billion dollars” over five years for this program. But this verb, “mobilize”, does not mean that the States will themselves provide these enormous sums. Washington thus arrives at a total of 200 billion dollars by combining loans, public financing – partly already existing – and private financing encouraged by the American executive.

“New Silk Roads”

Westerners want to distance themselves from China, which has heavily invested in many developing countries, to build infrastructure through the so-called “New Silk Roads”, or to secure access to certain raw materials. Beijing is nevertheless accused of carrying out its projects through loans that are not very advantageous, even frankly perilous, which would aggravate the debt problems of already vulnerable countries.

The Chinese offensive “has been going on for years and has resulted in a lot of cash payments and a lot of investment,” a senior White House official said Sunday, “but it’s really not too late,” he assured about the G7 initiative. “Many countries that have received funds or investments from the BRI (acronym for the English name Belt and Road Initiative) program now realize, years later, that they are more indebted, that their GDP has not increased significantly, that the so-called investments have not reached their populations,” said the same source, who did not wish to be named.

“Sub-Saharan Africa will clearly be a major priority” of the partnership launched by the G7, said this senior American executive, but ensuring that Central America, Southeast Asia, or Central Asia were also “extremely important” regions.

(AFP)

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