Europe recently hosted a meeting of the Group of Seven major industrialized nations amid the challenges of the Ukraine war and China's growing assertiveness in Asia.
Some of the ideas put forward have remained half-finished at best, such as the "Partnership Initiative for Infrastructure and Global Investment" that the administration of US President Joe Biden is betting on to contribute to the renaissance of developing countries, create job opportunities in industrialized countries, and provide returns from private investment, and then Achieving world peace.
In his report, published on the website of the American Institute of Economic Research, author Doug Bando says that the leadership of the Partnership for Infrastructure and Global Investment initiative represents a “threat” to China, which the writer views as “on the verge of dominating the world through the Belt and Road Initiative, Because of it, poor countries will become destitute through "debt trap" diplomacy, and they will control vital projects around the world, with the construction of facilities for military uses secretly, according to the author.
China Challenge
Accordingly, the writer believes that the United States and the West are required to respond by investing their people's money in the same type of foreign projects, saving the local population, and defeating the Chinese Communists.
According to the author, Beijing should not be underestimated, but at the same time, it is not the tyranny that is being portrayed. The Chinese economy suffers from political interference, government institutions are acquiring huge resources, and banks are under the burden of heavy debts, to which is added the threat of the real estate crisis, while young people aspire to leave country.
He pointed out that the Belt and Road Initiative program was originally ambitious, but Beijing has softened its expectations, and realizes that focusing on developing countries whose governments tend to be authoritarian and economically controlled at the same time limits the possibility of implementing and managing well-developed projects.
According to Sarah Hsu of the University of Tennessee, "there is no evidence that Chinese banks are over-lending or investing in money-losing projects to gain a foothold in these countries."
America and China
According to the author, the Republic of China has not yet built a network of foreign bases, Chinese trade practices have generated various forms of negative reactions in countries as diverse as Malaysia, Zambia, Sri Lanka, Pakistan and Myanmar, and many countries have suffered from the “Ugly China” syndrome similar to the “American” syndrome The Ugly” mythical during the Cold War, and the writer believes that the Belt and Road Initiative is not the ruthless geopolitical force that terrorizes many in the West.
The writer also believes that Joe Biden is committed to his previous plan to fight inflation by spending more money, "and the White House, along with the rest of the leaders of the Group of Seven major countries, announced the Partnership for Infrastructure and Global Investment Initiative to mobilize hundreds of billions of dollars and provide high-quality and sustainable infrastructure It makes a difference to the lives of people around the world, strengthens and diversifies our supply chains, creates new opportunities for American workers and businesses, and enhances our national security."
The United States is expected to contribute $200 billion over a 5-year period;
This is “through grants, federal funding, and benefiting from private sector investments,” provided that this amount is complemented by “additional capital from other like-minded partners, multilateral development banks, development finance institutions, sovereign wealth funds, and more.”
The other G7 countries are set to contribute another $400 billion at the same time, and the funding is supposed to focus on 4 main priorities:
Addressing the climate crisis and enhancing global energy security.
Develop, expand and deploy the infrastructure of secure ICT networks.
Promote gender equality and equity.
Developing and modernizing the infrastructure of health systems and contributing to global health security.
Biden stressed when announcing the initiative that "this is not aid or charity, but rather an investment that will bring returns to everyone, including the American people and the people of all of our countries, and will work to strengthen all of our economies."
Building a better world
The program aims to “promote democracy and defeat tyranny.” All of this sounds great in theory, but the writer sees that the accompanying problems are many:
The first is that the Partnership for Infrastructure and Global Investment has been renewed after it began last year under the name "Rebuilding a Better World" in order to align with the US administration's massive domestic spending plan.
Realizing that Republican opponents were unlikely to accept a similar international effort, and that foreign governments did not want to be seen as supporting a partisan political platform, the administration put its old initiative in a new spirit.
Second, the new name and official announcement suggest that all officials came up with it after a year of reflection, travel and consultation.
Is this really hard work to craft a statement?
With no names or commitments given, then where did the $200 billion and $600 billion estimates come from?
How will the financial contributions be implemented?
International aid conferences meet routinely and make generous promises of assistance, yet even these commitments made to some of the most desperate people on earth are often not kept.
Third, the Partnership for Infrastructure and Global Investment is not only incomplete but has barely begun, and the administration and the G7 members are not even pretending to have developed something new, but have instead blocked some existing projects, invited some agencies, and pointed out some Existing funds, and they expected to be joined by a group of existing public agencies and private funds, then they expected wonderful projects that had not yet been identified, as well as their creation, and indicated that everything would be subject to standards not yet developed, with returns not yet proven, according to the writer.
Fourth, it is difficult to defeat an opponent with whom you have nothing to defeat;
Beijing has adapted the Belt and Road Initiative to the economic and political reality over time, and has provided real money for real projects, although the results have varied.
As for the previous US efforts to confront China's program, it did not achieve much, while the poor countries want the money because what appears to be US criticism of Chinese funding does not serve their self-interest.
Fifth, how will all these massive, unchecked investments provide “returns for everyone,” as Biden puts it?
And if there are so many unique projects with sound social and economic design, why haven't they already been funded?
The World Bank, the Asian Development Bank, the Inter-American Bank, the African Development Bank, and the European Bank for Reconstruction and Development are all busy, as are dozens of aid agencies across the developed world, as governments maintain sovereign wealth funds, and private capital is looking for opportunities An irreplaceable neglected economy.
So what additional value will government bureaucracies provide across the G7?
Sixth, if the whole plan is related to private financing, what is the government's role?
National Security Adviser Jake Sullivan said, “What we're really trying to urge is a long-term economic relationship rooted in private sector investment, not in massive cash transfers from the U.S. Treasury to these countries. That means taking relatively less money, and leveraging sector investments. The large private sector could add up to billions of dollars, and eventually tens of billions of dollars."
With the private sector now able to invest, what is the government aspiring to bring in other than unavailable private funds?
And what will get private investors to enter these markets now, unlike ever?
Will it be financed by taxpayers' money?
So, there will be no real returns, according to the author.
Seventh, if the real plan is to finance projects with less-than-excellent economic prospects and the kind that have long been subsidized by multilateral development banks and governments, how realistic is it to expect “returns for all”?
Why do we expect better results from previous economic development aid?
What about the Millennium Challenge Corporation, which was unveiled in 2004 with great fanfare as a new way to better aid global development?
What is the evidence for the scarcity of funds for good projects?
Overall, the economic aid record is poor, and there is no evidence that much good will come from the United States and Europe by putting good money after bad money provided by the World Bank, the International Monetary Fund, and other multilateral development banks, as well as government aid agencies and commercial banks.
political considerations
Eighth, the Partnership for Infrastructure and Global Investment is likely to be influenced by requirements to guard against prejudice and discrimination, and there may be domestic political advantages by addressing issues such as climate change, information technology, gender, and health care.
But many appropriate programs are likely to be placed away from infrastructure that is unlikely to provide any economic returns, some may be politically controversial at home and abroad, and many important areas of investment are likely to be ignored.
Finally, the author concludes by asking: How can an unfunded investment program that is currently not subject to standards advance democracy?
Will allies work with democratic regimes only, real or fictitious?
If so, much of the world would still be dependent on existing financing mechanisms, including the Belt and Road Initiative.
And if not, will the provision of funds be at least conditioned on better behavior and less cooperation with authoritarian authorities?
If so, enthusiasm for participation is likely to rise, and if not, how will the Partnership for Infrastructure and Global Investment make democracies “win the competition” against China, as Biden has claimed?
The writer says that the West has a long history of providing development finance to poor countries, "and unfortunately it has a bad record. Problems persisted over the years, and eventually governments realized the vital role of markets and democracy in developing countries, and the multilateral development banks greatly supported the best management method." To help projects succeed.
The author concluded that the new "Partnership for Infrastructure and Global Investment" program introduced by the Biden administration is unlikely to be better than previous development initiatives, and likely "will not provide anything new, and worse still is a political project aimed primarily at China." .