President Biden on Sunday sought to unite key U.S. allies against Russia’s war in Ukraine, while announcing a new global infrastructure investment partnership between some of the world’s largest economies allied with the United States in response to China Growing influence in Africa, Asia and Latin America.
The Infrastructure Investment Partnership, which has been criticized for repeating an initiative that has struggled to gain global attention in the past, was the centerpiece of the opening meeting of the annual summit of G-7 leaders in Germany this week.
Biden, who appeared in the Bavarian Alps on Sunday with his German, French, British, Canadian, Italian and Japanese counterparts, said the investment partnership would “mobilize” $600 billion in “public and private capital” from G-7 countries for Project that will demonstrate “the concrete benefits of working with democracies” to developing countries around the world.
The dollar figure is higher than any previously announced by Western powers in response to hundreds of billions of Chinese infrastructure loans to the world over the past decade.
Still, Sunday’s announcement could be overshadowed by a more immediate crisis stemming from Russia’s ongoing war in Ukraine.
Aides say much of the behind-the-scenes G7 action so far has focused on preventing the economic fallout from the war in Ukraine, which could undermine the current global coalition that imposes sanctions on Russia.
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Concerns about the alliance have grown in recent weeks amid fears that Moscow could trigger a widening energy crisis by cutting off gas flows to Europe.
“We have to make sure we are all together,” Biden said in his first public remarks on Sunday after sitting down before a summit with German Chancellor Olaf Schultz of the Group of Seven. Rotating chairman and holding a meeting at Elmau Castle.
“You know, we’re going to continue to grapple with the economic challenges we face, but I think we’ll get through this,” the president said.
British Prime Minister Boris Johnson has called on other G7 leaders not to get “tired” of Russia’s invasion of Ukraine, even as Moscow appears to be trying to get a head start on the summit, with key NATO leaders due later in the future Meeting week by week to increase the rate of attacks in Ukraine.
Over the weekend, Russian troops launched a spate of missile attacks in Ukraine, and the G7 nations announced plans to impose a gold ban on Russia in response.
A formal announcement of the gold ban is expected on Tuesday, before the G7 leaders wrap up their summit ahead of a NATO meeting in Madrid on Wednesday.
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Mr Biden plans to attend the NATO summit, where Ukraine is expected to take centre stage while discussions of Finland and Sweden joining NATO have been discussed, although Turkey has been boycotting their bids.
In the meantime, officials noted on Sunday that gold is Russia’s second-largest export after energy, claiming that a ban on imports would make it harder for Moscow to participate in global markets.
Johnson said the ban would strike “directly at the Russian oligarchs, at the heart of Putin’s war machine.”
“Putin is wasting his dwindling resources on this senseless and barbaric war. He is funding his ego at the expense of the Ukrainian and Russian people,” the British prime minister said. “We need to starve the Putin regime of funds.”
Renamed to “B3W”
Over the past few years, the United States and other democracies have struggled to develop effective economic strategies to counter the rising influence of China and the ruling Communist Party in Beijing over governments in most developing countries.
The G7 partnership announced on Sunday its response to China’s so-called Belt and Road Initiative, which Western officials say has fueled authoritarian regimes in developing countries.
The former Trump administration in Washington has often criticized China’s plans as “predatory” and designed to inflict debts on countries with weaker economies that could later be relieved in exchange for the Chinese government’s access to natural resources and other forms of influence.
But U.S. officials have struggled to offer concrete alternatives. The Trump administration has ushered in reforms, including the creation of the United States International Development Finance Corporation, backed by $60 billion to incentivize private investment in developing countries around the world.
Mr Biden has sought to expand the practice through the G7, announcing the so-called “Building Back a Better World” (B3W) initiative at last year’s summit, seeking to spur private investment in wealthy democracies for infrastructure and other needs. developing countries.
Sunday’s announcement was largely a redefinition of the B3W initiative, with a different name, and it remains to be seen whether the president has the geopolitical capital to steer the initiative to tangible results.
Mr Biden has vowed that the United States will “mobilize $200 billion in public and private capital over the next five years” for this new initiative, now officially known as the “Global Infrastructure Partnership”.
The president said the partnership would direct funding “to areas that are critical to sustainable development and our shared global stability: health and health security, digital connectivity, gender equality and equity, climate and energy security”.
The first initiatives include a US$2 billion solar farm in Angola in South West Africa, US$320 million to build a hospital in Côte d’Ivoire in West Africa, and US$40 million to boost regional energy trade in Southeast Asia.
Mr Biden claims to be mobilizing some $335 million in private capital to provide secure network equipment in Africa, Asia and Latin America. He also said the U.S. government had backed U.S. firm SubCom’s successful bid for a $600 million contract to build global submarine telecommunications cables.
“The cable will extend from Southeast Asia, through the Middle East and the Horn of Africa, to Europe,” the president said. “This is critical to meeting the growing demand for reliable, secure, high-tech connectivity in three key regions of the world.”
The government has provided little specificity about how it will stimulate hundreds of billions of dollars worth of investment by private companies.
Some analysts doubt that the U.S. call for U.S. and G-7 companies to provide funding to the private sector will yield substantial results.
“The United States’ re-engagement in infrastructure is brave, but it faces two major challenges,” said Satu Limaye, director of the East-West Center’s Washington office and the U.S. Initiative for Asian Affairs.
“There’s a lot of private money in the U.S. looking for returns, and infrastructure abroad doesn’t look very attractive right now,” Mr. Limaye told The Washington Times. “Part of the reason it’s unattractive is that countries looking to spend heavily on infrastructure have a hard time being a model for the attractiveness of private sector investment in infrastructure.”
Despite those concerns, Mr Biden appeared to be in full swing Sunday, presenting the new G-7 infrastructure investment partnership as a money-maker for all involved.
“I want to be clear: this is not aid or charity; this is an investment that will pay off for everyone, including the American people and the people of all of our countries,” the president said in Germany. “This will advance all of our economies and an opportunity for us to share our positive vision for the future.”
Mr Biden appeared to avoid describing the initiative as an effort to contain China, apparently out of concern that doing so could make the G7 appear to be on the defensive globally.
However, top aides to the president have made it clear that the new investment partnership is all about confronting China.
National security adviser Jack Sullivan told an event at the Center for a New American Security think tank in Washington earlier this month that at the heart of the G7 initiative is an evolving “global infrastructure — the physical, healthy and digital foundations that we believe can provide alternatives. Facilities. What the Chinese offer.”
While the president avoided naming China in his remarks on Sunday, he emphasized that at the heart of the investment partnership is the mutual support of democracies.
“When democracies show what we can do, all we can offer, I have no doubt that we will win the race every time,” Mr. Biden said.