During the G7 summit in Hiroshima (May 19-21, 2023), the leaders of the seven economic powers reaffirmed their commitment to the Partnership for Global Infrastructure and Investment (PGII) in their joint communiqué. This program, launched at the previous G7 summit in Schloss Elmau, Germany, in June 2022, aims to assist in financing new infrastructure projects in emerging or developing countries, thereby building the necessary infrastructure for their development and ensuring the continuity of global supply chains.
This global partnership focuses on four main objectives:
- Building new infrastructure resilient to climate change
- Developing new information technologies
- Promoting gender equality
- Strengthening healthcare systems
To achieve these objectives, the G7 countries have pledged to invest $600 billion in this new program, with the United States alone funding one-third by 2027. The European Union is also making a significant contribution to the global partnership through its own program, the “Global Gateway,” endowed with $300 billion.
The funding provided by G7 members is expected to serve as an accelerator for private investments, as the projects of the Partnership for Global Infrastructure and Investment would provide quality assurances for private companies.
From the “Blue Dot Network” to the PGII
The Partnership for Global Infrastructure and Investment is, in fact, the successor of previous initiatives such as the “Blue Dot Network”, which was inaugurated by Washington in cooperation with Tokyo and Canberra in 2019 to compete with China’s Belt and Road Initiative launched in 2013. The Blue Dot Network aimed to differentiate itself from the Chinese initiative through greater private sector participation in financing and constructing infrastructure projects and by prioritizing quality criteria to ensure sustainable development.
Drawing inspiration from the Blue Dot Network, the G7 launched the “Build Back Better World” (B3W) program in 2021 to address the lack of infrastructure in developing countries. The B3W program has been renamed the Partnership for Global Infrastructure and Investment.
An alternative to the Chinese Belt and Road Initiative?
While the Partnership for Global Infrastructure and Investment was conceived as an alternative to the Chinese Belt and Road Initiative, promoting more transparent and environmentally friendly projects based on more democratic governance principles, it can be considered complementary to the Belt and Road Initiative for beneficiary countries. These countries, facing considerable financing needs, could seek cooperation from both programs. According to Sri Lankan President Ranil Wickremesinghe, all initiatives should be considered to promote the development of his country, and there is no need to choose between the United States and China.
Furthermore, the emphasis on “governance” aspects in the Partnership for Global Infrastructure and Investment projects should encourage China to review its own criteria for Belt and Road Initiative projects, as it has already done regarding their environmental dimension following initial criticism.
What has been achieved so far?
Currently, the projects funded under the Partnership for Global Infrastructure and Investment remain limited. However, the United States, through agencies such as USAID and the Millennium Challenge Corporation, has financed more than a dozen projects, particularly in agriculture and renewable energy sectors in Africa, Latin America, and Southeast Asia.
The European Union also prioritizes transport, health, and energy infrastructure, particularly in the Eastern Balkans region, as well as in the Indo-Pacific, Africa, and Latin America. The President of the European Commission Ursula von der Leyen mentioned that 90 Global Gateway projects have been implemented for the realization of the Partnership for Global Infrastructure and Investment.
To ensure the continuity of the PGII, the United States, the European Union, but also Japan and the United Kingdom will have to strengthen the coordination between their various initiatives and thus give more visibility to the PGII, but also encourage joint projects and interregional initiatives with local stakeholders from developing States.
To fulfil the promise of $600 billion by 2027, the actions of G7 members must accelerate without compromising the previously defined quality criteria. For developing countries and companies eager to strengthen their presence in emerging markets, the Partnership for Global Infrastructure and Investment presents interesting opportunities.
By reaffirming their support for the Partnership for Global Infrastructure and Investment, G7 members confirm greater cooperation between their development agencies, private sector actors, and emerging countries, which should benefit all parties involved.
Cooperans is available to leverage its expertise for the benefit of Global Partnership for Infrastructure and Investments project proponents.