In News
- Recently, the G7 launched an infrastructure investment plan to counter China’s Belt and Road Initiative.
More about the plan:
- The recent G7 Leaders’ Summit in Germany, has officially launched the Partnership for Global Infrastructure and Investment (PGII).
- It is a joint initiative to fund infrastructure projects in developing countries.
- The project, launched is being seen as the bloc’s counter to China’s ‘Belt and Road Initiative’.
- Infrastructure investment:
- G7 and EU have noted the infrastructure projects being undertaken and funded by China at a global level and decided to present their alternative mechanism for it.
- Funding:
- Collectively, the group aims to mobilise nearly $600 billion from the G7 by 2027.
- The funding will be utilised to invest in critical infrastructure that improves lives and delivers real gains for all of our people.
- However, the fund does not mean “charity or aid”, but loans, and will be beneficial for both the countries lending and receiving them.
- The stated purpose of both the PGII and the BRI is to help secure funding for countries to build critical infrastructure such as roads, ports, bridges, communication setups, etc. to enhance global trade and cooperation.
- However, the initiative is meant to be transparent, focused on building climate change-resilient infrastructure and help in achieving objectives of gender equality and health infrastructure development.
Significance:
- Investment plans for India:
- In India, the US International Development Finance Corporation, the development bank of the country, will invest up to $30 million in the Omnivore Agritech and Climate Sustainability Fund 3, described as “an impact venture capital fund that invests in entrepreneurs building the future of agriculture, food systems, climate, and the rural economy,”.
- The fund will invest in companies that “increase food security and promote both climate resilience and climate adaptation in India, as well as improve the profitability and agricultural productivity of smallholder farms.”
- For other countries:
- Apart from India, projects have been announced in countries across West Africa, Southeast Asia, and South America.
- Build Back Better World (B3W) initiative:
- Build Back Better World (B3W) initiative was announced at last year’s G7 summit.
- One of the main concerns with B3W was that it was not clear whether hard infrastructure projects would be part of the investment portfolio.
- PGII is said to be the repackaged version of the Build Back Better World (B3W) initiative.
- Significance of countering China’s BRI:
- Some experts believe that BRI is not just an economic project but one that China is promoting for political control.
- It is feared that BRI will lead to Chinese neo-colonialism causing an unsustainable debt burden for communities and an adverse impact on the environment in the partner countries.
- Then, there is a lack of transparency in China’s agenda.
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China’s Belt and Road initiative:
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Way Ahead
- While the US has been critical of BRI, other countries of the G7 have had varying responses to it.
- Italy became the first G7 member to be a part of the BRI in 2019.
- Germany and France, while not directly participating in the BRI, have also partnered with China in building rail networks and other projects for connectivity.
- India must focus on debating the specific terms of individual projects rather than having to say “Yes” or “No” to the PGII or BRI as a whole.
- India should also focus on modernizing connectivity across its land and maritime frontiers with its neighbours in the Subcontinent, South East Asia and the Gulf by completing our projects in these regions.
Source: IE, TH
