Wednesday, October 5, 2022
HomeGeopoliticsG7 leaders pledge $600bn infrastructure project countering China's Belt and Road Initiative

G7 leaders pledge $600bn infrastructure project countering China’s Belt and Road Initiative

The big western powers pledge $600 billion in infrastructure programs to counter China’s Belt and Road initiative at the G7 summit being held in Germany.

The new fund, called Partnership for Global Infrastructure and Investment, would help poor and middle-income countries for post-pandemic recovery and build resilience against such events in the future. However, the new scheme is said to be a re-launch of a similar scheme ‘Build Back Better World’ that was launched last year in July.

The American president mentioned that the fund was not a ‘charity’ program and preferred to term it as an ‘investment’, that would deliver returns for everyone. “Developing countries often lack the essential infrastructure to help navigate global shocks, like a pandemic, so they feel the impacts more acutely and they have a harder time recovering,” he said. “That’s not just a humanitarian concern, it’s an economic and a security concern for all of us.”

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The funds would be allocated through various multilateral development banks, sovereign wealth funds, and other financial institutions. The $600 billion fund shall be leveraged in the next 5 years with the US committing one-thirds of the cost on its behalf. Some of the flagship projects cited were a solar project in Angola, a secure sub-sea cable linking Europe and South-East Asia, a reactor plant in Romania, an mRNA vaccine production plant in Senegal and more.

Notably, Italy, which is one of the G7 countries, joined China’s Belt and Road initiative in 2019, and it is unclear if Rome would still stand by its agreement with Beijing over this project. The Belt and Road is a Chinese multitrillion-dollar project aiming to develop a comprehensive road, rail, and maritime transport network spanning Asia to Europe and Africa. The project is said to be a centerpiece of Chinese premier Xi Jinping’s foreign policy aiming to counter American influence over world affairs using economic and political might.

However, experts have pointed out that the Belt and Road initiative could be a garb for new neocolonialist policies to control small economies via debt-trapping. How much truth do these allegations hold, only time will tell.