Initiatives matter

If the EU becomes a strategic player, the Global Gateway and the BRI can together facilitate growth in developing countries

The 2008 global financial crisis made the need for investments in physical and digital infrastructure more acute. The crisis revealed the critical shortcomings of the financial system based on the Bretton Woods Agreement. The developing countries need help to satisfy the basic needs of their people. At the same time, in the developed world, inequality and other socioeconomic problems have created tensions between the elites and the rest of the population.

China was the first country to come up with an answer to these new challenges by launching the Belt and Road Initiative in 2013. In the past 10 years, more than 150 countries have joined the initiative, making it a leading global platform for sustainable development.

Meanwhile, as the unipolar world of the post-Cold War era began to fade away, and the United States pushed forward the idea of great power competition as the main feature of 21st-century geopolitics, global development efforts became another victim of geopolitics. The collective West began criticizing the BRI, accusing China of using the initiative for some "hegemonic ambitions". Western politicians and the media started circulating terms such as "debt trap", falsely seeking to portray the BRI as a threat to developing countries' economic well-being and political independence.

Simultaneously, the West started elaborating on its developing programs, arguing that they are more "useful and less detrimental" to the developing world. The first among these programs was the "Build Back Better World", or B3W. It was launched on June 12, 2021, by the G7 countries as a fund for infrastructure development in low- and middle-income countries. The initiative sought to address the $40 trillion worth of infrastructure needed by developing countries by 2035. According to G7 leaders, through B3W, the G7 and other like-minded partners would coordinate mobilizing private-sector capital in four focus areas — climate, health and health security, digital technology, and gender equity and equality. B3W was envisaged to be global in scope, extending from Latin America and the Caribbean to Africa to the "Indo-Pacific" region. One year later, the G7 countries established the Partnership for Global Infrastructure and Investment, a repackaged version of B3W. Through this partnership, the G7 aimed to mobilize up to $600 billion by 2027 to narrow the infrastructure investment gap in partner countries.

Thus, the US and the G7 sought to bring geopolitical competition and rivalry into global infrastructure funding. However, this approach will not serve the interests of the Global South and the needs of the developing countries. It will only exacerbate the existing gap between the developed and developing world and will create additional obstacles on the path of Global South development. Infrastructure development is paramount to overcoming such problems as global warming, global health, and others challenges. But injecting geopolitical tensions into this sphere will make the situation worse.

In this context, on Dec 1, 2021, the European Commission and the High Representative for Foreign Affairs and Security Policy launched the Global Gateway, the new European Strategy to boost smart, clean, and secure links in digital, energy, and transport sectors and strengthen health, education and research systems across the world. According to EU officials, the Global Gateway aims to mobilize up to 300 billion euros ($321 billion) in investments between 2021 and 2027 to underpin a lasting global recovery, taking into account partners' needs and the European Union's interests. EU leaders promised that through a Team Europe approach, Global Gateway would unite the EU member states with their financial and development institutions, including the European Investment Bank and the European Bank for Reconstruction and Development, and seek to mobilize the private sector to leverage investments for a transformational impact.

Actually, the EU has a chance to pursue a different approach with its Global Gateway initiative, seeking to avoid making it a counterbalance to the BRI. The EU organized a 2023 Global Gateway Forum in late October 2023 to debate issues related to global investment in infrastructure, including challenges faced by the public and private sectors, best practices, and lessons learned. All these areas are essential for developing countries. It remains to be seen if the follow-up can really be implemented.

Different initiatives should supplement rather than compete. In the emerging post-unipolar world, the EU may become a strategic player, or it may follow the US on everything, often damaging its interests. When choosing the first option, the Global Gateway and the BRI can carry out exchanges and cooperation in such areas as climate change, new energy and infrastructure upgrading, and become more cooperative and helpful tools in facilitating the growth of developing countries.

The author is chairman of the Center for Political and Economic Strategic Studies in Yerevan, Armenia. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

MA XUEJING/CHINA DAILY

Contact the editor at editor@chinawatch.cn.