The United Kingdom will completely reform its development investment sector, a move aimed at providing an “alternative plan” to assume “tied debt” to offset China’s influence in emerging countries.
British Foreign Secretary Liz Truss will launch the British International Investment Corporation (BII) on Thursday, which will use private capital to invest in countries in Asia, Africa and the Caribbean and provide an alternative to Chinese loans. The West serves as a tool for spreading Beijing’s influence.
BII is a revised version of the government’s Federal Development Corporation Group, which has historically been criticized for investing in purely commercial projects such as hotels and shopping malls and focusing on more developed economies.
According to the BII plan to be launched on the London Stock Exchange, by 2025, the UK will mobilize at least 9 billion pounds of investment each year. Officials said this will include working with capital markets and sovereign wealth funds to expand the scale of financing and help the private sector enter.
In an interview with the British “Financial Times”, Truss said that the new agency will give priority to infrastructure investment and provide “alternative solutions” for low-income and middle-income countries to replace the additional conditions of “authoritarian regimes” and non-market economies. debt.
She said that using economics as a foreign policy tool to exert greater global influence is “a core part of the global British agenda.”
Truss added: “We want to build a free network with our friends and partners all over the world. This involves a closer economic partnership. This is a positive agenda. This is not a confrontational agenda. This is About providing alternatives to countries.”
US President Joe Biden led a call for a “Rebuilding a Better World” plan, which will provide poorer countries with new sources of infrastructure financing and a “democratic” alternative to Chinese loans.
In June of this year, at the G7 Summit in Cornwall, leaders supported China’s Western competitors of the “Belt and Road” initiative—Beijing pledged to spend approximately US$1 trillion in building infrastructure in developing countries—and planned to deploy data. One billion U.S. dollars helps poorer countries cope with climate change.
“In general,’rebuilding a better world’ is the joint efforts of many different countries to create reliable and honest investment on a global scale, with the purpose of drawing more countries or more investment into a positive circle of influence,” Truss Say.
The British development finance institution CDC received £650 million from the British government in 2020 as part of the British development fund’s gradual shift to so-called impact investing, which also brought commercial returns. In the past 10 years, it has received about 3% of the UK’s overseas development budget.
Officials said that the exact amount of funding the new BII will receive will depend on “a series of factors” and will be negotiated by the government in the new year.
“It is a good thing to provide more funding to developing countries, especially focusing on infrastructure and green investment,” said Ranil Dissanayake, a policy researcher at the Global Development Center think tank.
“But the inference that this will allow countries to replace China’s debt is pure rhetoric—compared to the size of China’s One Belt One Road initiative, £9 billion a year is insignificant.
“The most valuable part of this idea is the concept of Britain as a catalyst to encourage private sector investment and reduce the cost of new technologies. It is through this that British innovation can indeed compete with China’s brute force financing methods.”
As a hawk against China, Truss has previously criticized “economic coercion”, especially against some controversial trade practices in Beijing. Truss said that BII will operate under a clear set of standards. “Transparency standards, property rights standards and personal freedom protection standards.
“This will help these countries obtain the infrastructure and other financing they need for their development in a way that has no strings attached or other financing proposals are opaque.”