Infrastructure in Africa: G7 invests $600bn

AGAINST’is a year-old project, and the United States hopes to get back on track this time around. To curb Chinese expansion, the Biden administration unveiled the Build Back Better World (B3W) initiative at the G7 summit in Carbis Bay in the United Kingdom in June 2021 with several hundred billion dollars to invest in such diverse areas. like climate, health, gender equality or technology in developing countries. However, so far this initiative has received too little support from the G7 countries, according to experts, especially since this investment plan has not been approved by the US Congress.

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$600 billion infrastructure program

A year later, the initiative was renamed the Global Infrastructure Partnership, and the US has much more intent on convincing the G7 leaders to agree to fund start-ups in middle- and low-income countries to the tune of $600 billion over the next five years. “Together with our G7 partners, we aim to mobilize $600 billion in global infrastructure investment by 2027,” the White House said shortly before US President Joe Biden’s speech at the Seven Industrialized Nations Summit in southern Germany. The American president assured that this program is based on “common values” such as “transparency”, as well as respect for the rights of workers, the environment, gender equality. “We offer better options,” he said against the backdrop of the peaks of the Bavarian Alps.

Neither the US president nor other leaders have mentioned the name of China, but have made clear allusions to it. Thus, European Commission President Ursula von der Leyen believed that Western partner countries “had a choice” – implied: to go to the democracies, not to Beijing – to develop their electrical grids or their medical infrastructure.

Response to huge projects funded by China

Westerners want to distance themselves from China, which has invested heavily in a number of developing countries to build infrastructure under the so-called “new silk roads” program or to provide access to certain raw materials. In 2013, Beijing launched its land and sea infrastructure development initiative to connect Asia, Europe and Africa with China. But eight years later, the complaints are plentiful: “non-transparent” solicitations for tenders, allegations of corruption to win contracts, or even non-compliance with human, social and environmental rights.

Beijing is accused of implementing its projects at the expense of unprofitable, opaque loans – hence the “transparency” promised by the G7 countries on the contrary – even frankly risky, which would exacerbate the debt problems of already vulnerable countries. In particular, in Africa, China managed to win contracts by offering projects much cheaper than competitors. The “Partnership for Global Infrastructure” should “give the world better conditions for investment in infrastructure,” said German Chancellor Olaf Scholz.

The United States alone is promising to “mobilize” about “$200 billion” over five years. But “mobilization” does not mean that the States themselves will provide these huge sums. Washington receives a total of $200 billion through a combination of loans, public funding – some of it already in place – and private funding encouraged by the US executive. But “the Russian invasion of Ukraine and the faltering economic recovery from Covid-19 threaten to undermine the G7’s progress on that agenda,” Chatham House analyzes in a note on “the G7’s role in rebuilding the ‘global economy'” published June 24. The shift in priorities among donor countries, caused by events in Ukraine, risks provoking further shifts in the development policies of these countries towards greater bilateralism.” For authors, Cynthia Liao and Theo Beal “Politicians should consider where the benefits of working with China outweigh the risks and where the BRI approach can complement the values-based approach of the G7 initiatives. It is possible that the major powers will work together to increase the benefits for beneficiary countries.

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Sub-Saharan Africa Priority

With these big numbers still uncertain, and with these good intentions, can Westerners reverse the trend in the face of China? The United States wants to believe it. The Chinese offensive “has been going on for years,” a senior White House official said Sunday, “but it’s really not too late.” “Many countries that have received funds or investments from the BRI program [acronyme de la dénomination en anglais « Belt and Road Initiative », le programme chinois] now they realize, years later, that they have more debt, that their GDP has not grown significantly,” the same source, who asked not to be named, estimated. “Sub-Saharan Africa will certainly be the top priority of the partnership launched by the G7,” the senior official said. It should be noted that infrastructure suffers from severely underfunded on the continent. The needs are estimated by the African Development Bank (ADB) at $130-170 billion a year, with a deficit of $53-93 billion a year.

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