The United States is pledging $200 billion to a G7 infrastructure project intended to counter China’s multi trillion-dollar Belt and Road Initiative.
The “Partnership for Global Infrastructure and Investment” was relaunched by President Biden and other Group of Seven leaders on Sunday at their annual gathering being held this year at Schloss Elmau in Southern Germany.
Together the G7 leaders pledged to raise $600 billion in private and public funds over five years to finance needed infrastructure in developing countries.
The US’ $200 billion portion will come from grants, federal funds, and private investment over that time period to support projects are intended to tackle climate change, improve global health, gender equity and digital infrastructure.
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Biden went at lengths to insist the money was not “aid or charity.”
“It’s an investment that will deliver returns for everyone,” he said, adding that it will allow countries to “see the concrete benefits of partnering with democracies.”
He suggested that additional funds – upwards of hundreds of billions – could come from multilateral development banks, development finance institutions and sovereign wealth funds.
Chinese President Xi Jinping launched China’s Belt and Road Initiative scheme in 2013. The nearly ten-year multi-trillion-dollar effort involves development and infrastructure programs in more than 100 countries aimed at creating a modern version of the ancient Silk Road trade route from Asia to Europe.
Western officials have long argued that the initiative traps receiving countries in debt with investments that benefit China more than the hosts.
The G-7 program responds to China’s so-called Belt and Road Initiative, which Western officials have long argued traps receiving countries in debt and with investments that benefit China more than their hosts.
The White House says the initiative seeks to leverage $200 billion in US investment over the next five years, along with a similar amount from G-7 allies, to boost infrastructure development in lower- and middle-income nations.
It adds that most of the funding will come from the private sector, sovereign wealth and global development funds, rather that direct taxpayer dollars.
The US says the G-7 backed effort promotes responsible investments that aim to benefit the communities they are made in.
Among the first initiatives are a $2 billion solar farm investment in Angola in Southwest AFrica, $320 million for hospital construction in Ivory Coast, in West Africa, and $40 million to promote regional energy trade in Southeast Asia.
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In a jab at China, European Commission President Ursula von der Leyen said the G-7 is offering “sustainable, quality infrastructure” and will be “listening closely to the recipient countries.”
The Associated Press contributed to this report.