G7 launches USD 600 Bn infrastructure plan for developing countries

G7 launches USD 600 Bn infrastructure plan for developing countries

Only a year after a similar plan was launched in Cornwall under the name Build Back Better World, the G7 has been compelled to relaunch this initiative to offer infrastructure cash to poor and developing countries.

With the same objective of proposing an alternative to the Chinese belt and road initiative, which Beijing has used for more than ten years to forge economic ties with developing nations, the fund was relaunched at the beginning of the G7 summit in Germany under the name Global Investment and Infrastructure Partnership.

On the first day of the summit, all the G7 leaders, led by U.S. president Joe Biden, gathered for a side meeting to support the alliance and reaffirm their commitment to aiding developing nations. By 2027, it was intended to leverage USD 600 billion in private and public funding, with President Biden stating that USD 200 billion would flow from the U.S. over the next five years.

However, the U.S. has consistently asserted that the Chinese loans are riddled with unstated conditions that subject countries to exorbitant payback clauses in the end and intrusive requirements that frequently conflict with efforts to combat climate change.

The EU recently unveiled the Global Gateway, an infrastructure fund for poor nations. At the time, the EU stated that the Global Gateway will complement Build Back Better World rather than compete with it. Outside of the EU, the U.K. has also started its infrastructure initiative known as the Clean Green Initiative.

Recently, at the Cop26 in Glasgow, President Joe Biden, U.K. Prime Minister Boris Johnson, and President of the European Commission Ursula von der Leyen discussed their respective programs and whether duplicating their efforts would undermine what they had to offer.

Olaf Scholz, the German chancellor said that it would be advantageous for the G7 nations to promote their offerings under one roof. The statements give the impression that the money is being more tightly coordinated instead of combined into one financing stream.

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Rashi Thakkar

Rashi Thakkar

Rashi started her journey in content when she was completing her MBA. Since then, she has helped well-known startups and businesses boost their online presence. Currently Rashi pens downs insightful articles for AlpenHornNews and various other websites, covering an array of sectors from finance and business to technology and healthcare.