G7 plan does nothing for globalisation and merely targets China
- Infrastructure push proposed by world’s most developed nations should have dovetailed with Beijing’s Belt and Road Initiative, but instead it seems aimed at dividing and competing
Globalisation has a proven track record of making the world a better place. The sharing among countries of technology and innovation, building of supply chains, increased understanding of other cultures and access to new markets, has raised living standards and lowered costs.
China’s Belt and Road Initiative has this approach at its core and the roads, ports and railways and communications networks built in developing countries since its launch by President Xi Jinping in 2013 have brought innumerable benefits.
An infrastructure plan put forward by the Group of Seven, representing the world’s most developed nations, at its recent annual summit should be in the same spirit and have dovetailing in mind, but instead seems aimed at dividing and competing.
The plan was unveiled at the G7 summit in Britain last year, but little progress was made and it has been relaunched as the Partnership for Global Infrastructure and Investment.
Member nations have pledged to raise US$600 billion in public and private funds over five years for projects in low- and middle-income countries. United States President Joe Biden, in announcing the scheme, said the focus would be on tackling climate change and improving health, gender equality and digital architecture.
Beijing was clearly the target; Biden spoke of democracies working together to triumph over autocracies. A statement issued after the summit mentioned China 14 times, criticising it for its ties with Russia, human rights record and grievances over its role in the global economy.
Washington and its allies have faulted the belt and road as being foremost about benefiting China by creating economic and strategic footholds, and its projects as being debt traps.
But such claims ignore the consultation involved and tangible gains of those who benefit from infrastructure built.
The World Bank estimates that if all transport links proposed under the belt and road scheme are completed, US$1.6 trillion in annual gains will be generated by 2030, accounting for 1.3 per cent of global GDP. About 7.6 million would be lifted from extreme poverty and 32 million from moderate poverty between 2015 and 2030.
More than 100 countries are involved in the belt and road, but only two G7 members, France and Italy, have joined. Xi has called on Western nations to participate for the betterment of human progress.
Almost a decade after it was launched, leading economies have put forward their own plan, seemingly with geopolitical gain rather than synergy in mind. Worse, given Biden’s language and that of some fellow G7 leaders, forcing governments to choose between the West and China seems to be the goal.
This is against globalisation and ignores decades of gains. Global stability, development and prosperity lie in nations working together, not competing and decoupling.