News Highlights
At the 48th Summit G7 unveiled the ambitious Partnership for Global Infrastructure and Investment (PGII), announcing the collective mobilisation of $600 billion by 2027 to deliver “game-changing” and “transparent” infrastructure projects to developing and middle-income countries.
What is the Partnership for Global Infrastructure and Investment ?
- Background:
- The West has been sceptical of the BRI since President Xi Jinping launched it in 2013 to increase political influence in Asia and other developing countries.
- The U.S., along with G7 allies and the European Union (EU), had in 2021 announced the launch of the Build Back Better World (B3W)
- B3W aims to narrow the $40 trillion infrastructure gap in the developing world.
- PGII is therefore a relaunch of Mr. Biden’s B3W plan.
- PGII
- PGII is a “values-driven, high-impact, and transparent infrastructure partnership to meet the enormous infrastructure needs of low and middle-income countries and support the United States’ and its allies’ economic and national security interests”.
- Aim : G7 to collectively mobilise $600 billion by 2027 to invest in sustainable and quality infrastructure projects in developing countries, including India, and strengthen global supply chains.
What kind of projects will the PGII undertake?
- All PGII projects will be driven by four priority pillars
- Climate
- G7 grouping aims to tackle the climate crisis and ensure global energy security through clean energy supply chains.
- Digital Infrastructure
- Projects will focus on bolstering digital information and communications technology (ICT) networks facilitating technologies such as 5G and 6G internet connectivity and cybersecurity.
- Gender Equity
- The projects aim to advance gender equality and equity
- Global Health
- To build and upgrade global health infrastructure.
- Climate
How will Partnership for Global Infrastructure and Investment benefit India?
- In India, the U.S. International Development Finance Corporation (DFC) will invest up to $30 million in Omnivore Agritech and Climate Sustainability Fund 3
- An impact venture capital fund that invests in entrepreneurs building the future of agriculture, food systems, climate, and rural economy in India.
- The fund will invest in companies that “improve the profitability and agricultural productivity of smallholder farms in India, as well as increase food security and promote both climate resilience and climate adaptation.”
What is China’s Belt and Road Initiative?
- China began the Belt and Road Initiative in 2013 under its President Xi Jinping.
- It aims to revive the ancient trade routes crossing to and from China–from Rome in Europe to East Asia.
- Under this, the Chinese government helped in providing loans for infrastructure projects to various countries, and in many cases, Chinese companies were awarded contracts for carrying out the work.
- This helped China mark its footprints at a global level.
G7 Criticise BRI
- China’s BRI has been labelled as form of debt trapped diplomacy
- Western officials have long argued that the initiative benefits China more than the receiving countries.For Example
- Under the BRI Srilanka paid for the construction project of its Hambantota port with 1.1 billion dollars
- Due to a lack of revenue from the port, Sri Lanka was forced to hand over the port and 15000 acres of surrounding land to China on a 99-year lease in 2018.
PGII and BRI
- The PGII is seen as the G7’s response to China’s multi-trillion dollar Belt and Road Initiative (BRI)
- which aims to build connectivity, infrastructure, and trade projects across Asia, Europe, Africa, and Latin America.
- It is an attempt to check China’s influence in the developing world by delivering game-changing projects to close the infrastructure gap in these countries.
Pic Courtesy: The Hindu
Content Source: The Hindu