Within a week two strong messages have emanated from the two sparring world powers, aimed at controlling the world or realigning the current global order. US President Joe Biden on June 26 and Chinese President Xi Jinping on June 23 announced two new global initiatives at BRICS and G7 Summits, respectively. Last week in his address on June 22 at the 25th St. Petersburg International Economic Forum and the next day, on June 23 at BRICS Summit in Beijing, Chinese President Xi Jin- ping stressed the need to forge greater synergy amongst countries for greater international development and close the development gap, by pooling resources, platforms, and networks of development partnerships. Noting that the international community is keen to achieve more equitable, sustainable, and secure development, Xi said it is important to seize opportunities, meet challenges head-on and work on the implementation of the ‘Global Development Initiative’ (GDI) to build a shared future of peace and prosperity.
The Chinese president proposed the GDI in his speech to the 76th Session of the UNGA in September last year. The plan charts a course for international development, based on China’s goals and priorities. Meanwhile, at the recent G7 Summit at SchlossElmau in the Bavarian Alps, Germany, President Biden on 26 June relaunched his initiative to provide infrastructure funds to poor and developing countries only a year after a largely similar scheme was unveiled at the G7 conference in Cornwall last July under the label ‘Build Back Better World’. The fund was relaunched at the start of the G7 in Germany on Sunday as the ‘Global Investment and Infrastructure Partnership’. The avowed aim of this initiative is to become an alternative to the Chinese belt and road initiative (BRI) that Beijing has used for more than a decade to expand its economic ties and influence with developing countries.
The partnership aims to generate $600 billion of private and public funds by 2027, with $200bn over the next five years coming from the US. Projects cited at the event include a secure sub-sea cable linking Europe and south-east Asia, an industrial MRNA vaccine plant in Senegal, solar projects in Angola, a modular nuclear reactor plant in Romania, and a port linking Christmas Island with the rest of the world. However, up until now, little has been heard of ‘Build Back Better World’ since last year, while in January the EU launched its own infrastructure fund for developing countries, called the ‘Global Gateway’, aiming to mobilize 300 billion ($53 billion) in investments between 2021 and 2027. Initially, the EU declared that this fund would work alongside ‘Build Back Better World’, and not be a rival.
The UK, outside the EU, launched its own infrastructure project called the ‘Clean Green Initiative’. There are reports that Japan is planning to raise $65bn over the same period for regional connectivity, though this fund/project has not been christened, yet. All these various funds, though uniquely targeted against China have just created confusion for the politicos and the common man alike. Perhaps realizing this Olaf Scholz, the German chancellor in his speech on June 26.
