Intentions and Prospects of the Global Infrastructure Partnership

  On June 26, US President Biden announced at the G7 summit that the G7 officially launched the “Partnership for Global Infrastructure and Investment” (PGII) initiative, which plans to raise 600 billion yuan in the next five years. U.S. dollars to carry out infrastructure investment and construction around the world. Since 2018, many Western countries have “singed up and I will come on stage”, and have continuously put forward initiatives related to infrastructure construction. What are the similarities and differences between the newly proposed PGII and past initiatives? What are its strategic intentions and implementation prospects?
The United States led the proposal, the G7 collectively launched

  The PGII initiative is a global infrastructure investment plan initiated by the United States and officially launched in a collective form at the G7 summit. Its goal is to raise funds for infrastructure construction in developing countries. Part of the $600 billion mobilization plan will be financed by member governments, while most of the rest of the G7 will mobilize substantial private sector investment and seek funding from other “like-minded” partners, multilateral development banks, development finance institutions, sovereign wealth Funds and other channels to mobilize capital.
  The four priority areas for PGII investment and construction are climate and energy security, digital connectivity, gender equality, and health systems, which the United States sees as the key to “defining the direction of the second half of the 21st century”. Specifically, the field of climate and energy security focuses on the development of climate-resilient infrastructure, clean energy supply chains, energy extraction, technology expansion, etc.; the field of digital connectivity focuses on the development, expansion and deployment of information and communication technology (ICT) Networks and infrastructure to promote open digital society and cybersecurity; investment in gender equality is committed to improving women’s economic participation, access to health, and advancing gender equity; health system development focuses on developing and upgrading infrastructure, including in vaccine manufacturing , disease surveillance, health services and worker capacity.
Western attention is increasingly focused on infrastructure

  The West’s capital investment in developing countries has long been concentrated in “soft areas” such as “democracy” and “empowerment”, but in recent years, the West has generally shown attention to the field of infrastructure. With Trump’s inauguration as a watershed, the West, led by the United States, has been throwing out infrastructure construction cooperation initiatives. The Trump administration mentioned in the “Indo-Pacific Strategy” that the United States will focus on infrastructure, energy and the digital economy, and announced in 2018 that it would inject $60 billion into the establishment of the International Development Finance Corporation to seek to promote the “Indo-Pacific” region through a public-private partnership model. Infrastructure development. In 2019, the United States, together with Japan and Australia, launched the “Blue Dot Network” program to try to build infrastructure evaluation and certification standards. After Biden came to power, the United States continued the momentum of promoting infrastructure construction. In June 2021, Biden launched the “Building a Better World” (B3W) infrastructure plan at the G7 summit.
  U.S. allies followed closely. In November 2021, the U.K. announced the reorganization of the British International Investment Corporation (BII) to focus on green infrastructure and digital infrastructure; in December, the European Commission announced a 300 billion The Euro’s “Global Gateway” infrastructure investment plan focuses on digital, health, climate, energy and other fields; in May this year, the United Kingdom released a new “International Development Strategy”, promising to raise 8 billion pounds per year by 2025 to implement the “UK Investment Partnership” . Japan, on the other hand, proposed a “high-quality infrastructure partnership” as early as 2015. Japan regards this infrastructure cooperation plan as a key measure to “build a free and open Indo-Pacific”, and a large number of infrastructure projects have been implemented in Southeast Asia and South Asia. After taking office, Kishida inherited Abe’s “political legacy” and repeatedly emphasized the need to strengthen infrastructure hardware and software investment in the “Indo-Pacific region”.
  The PGII initiative launched this time is a collective response plan made by the G7 under the new international situation of the current pandemic and the conflict between Russia and Ukraine, showing that developed countries, especially the United States, have returned to the leadership core of multilateral mechanisms and strengthened infrastructure competition. determination of strength.
PGII is nothing new

  After the G7 proposed the B3W plan with a high profile last year, there has been no substantial progress. The PGII proposed this time can be regarded as a “continuation” or “replacement” of B3W. Unlike the B3W plan, which is “talking and not practicing”, PGII not only set clear funding goals, but also “claimed” their respective tasks: the United States contributed 200 billion US dollars, the European Union 300 billion euros, and Japan 65 billion US dollars. The White House of the United States also issued the “PGII Memorandum”, which made a clear division of labor between government departments such as the Agency for International Development (USAID) and institutions such as the Millennium Challenge Corporation (MCC), the International Development Finance Corporation (DFC) and the Export-Import Bank. The G7 seems to be “real” this time. However, considering the actual performance after a series of infrastructure assistance and investment measures proposed by the United States and the West since 2018, there is still a question mark on the extent to which the initiative proposed by the G7 can become a reality.
  In fact, PGII has nothing new, but just “integrated and packaged” the infrastructure plans previously announced by the G7 countries. According to the list of projects disclosed so far, the United States is cramming existing projects into the PGII program. The 300 billion euros pledged by the EU is exactly the target amount of its infrastructure plan “Global Gateway”. Japan has pledged to contribute $65 billion to PGII over five years, which is also the same size as its existing infrastructure aid. In addition, the PGII initiative is expected to follow the old model of infrastructure cooperation formed in the West in recent years. On the one hand, relying on multi-party joint financing to share costs and risks. According to the announcement of the United States, PGII has launched dozens of projects around the world, most of which are jointly funded and participated by American institutions, aid agencies, international organizations or financial institutions of other countries. On the other hand, vigorously attract private capital to intervene. As Western aid is vulnerable to economic weakness and the impact of the epidemic, the promise of US$600 billion will not be reduced to an “empty promise” only by attracting private capital to step in in the next five years.
Intent to redefine the “rules of the game”

  In recent years, the “trends” of the West’s participation in infrastructure construction have come and gone. It seems that they are keen to participate in infrastructure construction in developing countries, but in fact they intend to establish a set of infrastructure plans for “democratic countries” through extensive participation, redefining the concept of global infrastructure construction. “game rules”. Infrastructure in the Western context includes hardware and software. For a long time, hardware is not its strength, but software is its strength. Strengthening soft investment in relevant laws and regulations, governance capabilities, project processes and standards in developing countries, and providing infrastructure support in frontier fields such as digital, renewable energy, and healthcare will be the key to reshaping infrastructure rules in the West.
  Although PGII has made good promises and detailed plans, its implementation still faces huge obstacles. First of all, the extent to which the finance can leverage more investment cannot be achieved only by policy guidance, but also depends on the investment interest and confidence of profit-seeking private capital in developing countries, and the current impact of the global epidemic and the conflict between Russia and Ukraine However, private investment has become more cautious. In addition, the United States and Europe are facing the pressure of domestic infrastructure reconstruction, and foreign investment lacks the foundation of public opinion and sufficient resources. Second, PGII has attached political conditions. This “condescending” infrastructure model aimed at exporting values ​​cannot win the approval of developing countries at all. Finally, the United States and the West are not monolithic, and have their own development strategies. All parties hope to use infrastructure investment to promote the international competitiveness of their own companies. Internal competition and differences in the West may intensify.
  In general, the West’s infrastructure construction in developing countries is strengthening its ideological color and tends to become more “politicized”. However, despite the huge gap in infrastructure construction in developing countries, most developing countries are not willing to take sides because of this, and the G7’s road to promoting the so-called “standards” is also destined to be difficult.

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