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F.M. Shakil
The plan for a large infrastructure project by the US and G7 to compete with China’s Belt and Road Initiative (BRI) appears to have died a natural death after the Russia-Ukraine conflict ravaged Europe’s economy. Meanwhile, China continues to expand the scope of its infrastructure initiative, attracting over 147 nations from all continents.
The proposed $600 billion in funding, with the US pledging $200 billion, has yet to be collected for the establishment of a new global gateway. As the west focuses on addressing crises in Eastern Europe, Washington’s goal of creating an alternative to the BRI remains unfulfilled.
‘Build Back Better World’
Early in June 2021, the US administration of President Joe Biden announced the “Build Back Better World” (B3W) program as a “values-based, transparent, and sustainable” project. They believed they could overcome the challenges posed by the BRI by providing poor countries with a superior alternative based on the US model of ‘shared values’ to meet their infrastructure funding needs while retaining stronger labor, environmental, and transparency standards.
A year later, at its summit in the Bavarian Alps, Germany, in 2022, the G7 reaffirmed Biden’s vision of B3W but claimed to have been concentrating on a new infrastructure investment program that could rival China’s BRI.
The US, Canada, Germany, and Japan, along with the other G7 members, officially launched the “Program for Growth in Infrastructure and Investment” (PGII).” At the concluding session, they pledged to raise approximately $600 billion over the next five years for infrastructure projects in developing countries under a global partnership.
Mushahid Hussain Syed, Chairman of Pakistan’s Senate Defense Standing Committee, told The Cradle that the sole purpose of B3W is to counter the BRI. This conclusion gets considerably stronger in light of the B3W fact sheet, which states that the G7 gathered to “examine strategic competition with China.”
“The Biden Administration introduced B3W with great fanfare two years ago as a copycat program of BRI. However, it was soon rebranded as PGII after one year, but no new projects were launched. Simultaneously, the EU rolled out its own BRI clone initiative under the grand moniker ‘Global Gateway,’” he said.
Cold War mentality
A research study conducted by the Islamabad-based Sustainable Development Policy Institute (SDPI) in 2022 found that B3W owes its origins to two prior US attempts to counter the Chinese trade and technology onslaught.
It stated that the US administration had previously attempted to limit Beijing’s sphere of influence by restricting its exports to the US, Caribbean, Taiwan, African, and Southeast Asian markets, as well as diminishing its growing technological and global clout through the United States Innovation and Competition Act (USICA) and the Blue Dot Initiative.
China has responded vehemently to Blue Dot and USICA, alleging that they are steeped in a Cold War mentality and are designed to defend the US global hegemony. China’s response to B3W is that a handful of countries cannot rule the world. China may respond by engaging in a trade war or altering its own laws.
The Blue Dot Network (BDN) is a multi-stakeholder effort led by the US International Development Finance Corporation (DFC), the Japan Bank for International Cooperation, and the Australian Department of Foreign Affairs and Trade.
It was established to analyze and certify financial integrity, environmental sustainability, and the impact of infrastructure development projects on economic development to encourage private capital investment abroad.
Covertly, though, the exercise was intended to curb China’s rising trade dominance and technology blitz on the global market. The BDN was subsequently integrated into the B3W effort.
BRI versus B3W
When launching the B3W in 2021, the G7 countries asserted that the second half of the 21st century would be defined by four priority pillars of the program. These targets include combating climate change, creating secure information and communications technology, promoting gender equality, and contributing to global health security through the infrastructure of health systems.
However, geopolitical analysts and observers are perplexed as to why the EU has opted to engage in actions that resemble competition with Chinese ventures. This game of rivalry makes little logical sense, primarily because China and the EU have different philosophies, ecosystems, and geographical origins.
The western and Chinese infrastructure strategies are incompatible. While the B3W or PGII is still in an embryonic stage, President Xi Jinping’s BRI, which was unveiled in 2013, has already established a land and sea connectivity network linking Asia, Europe, and Africa to ensure the diverse, independent, balanced, and sustainable development of the countries attached to the corridor.
To date, the BRI covers approximately 2600 projects in over 140 countries, representing 40 percent of the world’s population and more than a third of its GDP. The BRI has a $3.7 trillion layout, and China has already invested approximately $755 billion between 2013 and 2020.
In 2019, global economic experts at Cebr predicted that BRI would increase global GDP by “more than $7 trillion per year.” It is projected that the annual GDP of 56 different countries will increase by more than $10 billion by 2040 as a result of the project.
The US economy benefits from BRI
Interestingly, the US stands to benefit the most from the BRI, despite not being directly involved in the initiative. This is due to the sheer size of the US economy, which allows it to gain indirectly from an increase in global GDP.
Although the increase in US GDP is only 1.4 percent, the magnitude of the US economy means that this is still greater than the boost to any other economy, except China. Russia has the second-largest impact, followed by Japan, Indonesia, Korea, the UK, India, and the Netherlands.
Mushahid contends that in terms of specific projects, there has been no concrete progress in any country since the launch of the US-led project for a new global infrastructure development initiative.
“In contrast to China’s strategic clarity in pursuing its geoeconomic agenda, the west, especially the US and the European Union, is still muddling through strategies to counter Chinese vision,” he claimed.
Mushahid went on to add that the foundation of the western strategy remains security-centered and reminiscent of the Cold War strategy, which has lost its relevance in the present global geopolitical environment:
“Their strategies are still controlled by the military playbook employed during the first Cold War against the Soviet Union, even though China is not the Soviet Union but is now a strong economic, political, and military powerhouse on a global scale.”
Western media has portrayed China’s BRI a one-man show, while the Global Gateway is said to be a multilateral effort that aims to benefit the people in participating regions, rather than primarily benefiting the investor, as is the case with the Chinese model of BRI.
However, the early projects highlighted by President Biden at the B3W launch ensured that more than fifty percent of capital investment would be reinvested back into the US economy.
Projects already funded by the US government’s investment and aid agencies have been grouped under the B3W umbrella. These agencies include the International Development Finance Corporation (DFC), the telecommunications company SubCom, the US firm NuScale Power LL, the US Agency for International Development (USAID), the US Export-Import Bank, and the Washington-based US firm Schaffer.
Investments totaling $3 billion were initially announced under B3W in sectors such as telecommunications, healthcare, information technology, agriculture, and communication in India, Senegal, West Africa, Cote d’Ivoire, Southeast Asia, Romania, and Latin America.
These investments will mainly have a positive impact on US exports. For example, the US is expected to recover more than half of its total investment from just one of the solar energy projects in Senegal, which will boost US exports by more than $1.3 billion.
Source: The Cradle
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