Investment plan

EU launches infrastructure investment plan to compete with China

The President of the European Commission, Ursula von der Leyen, on Wednesday (September 15th) launched the European strategy “Global Gateway” – an international investment plan for transport and infrastructure.

She presented the plan in her annual State of the Union address and in a clear response to China’s Belt and Road Initiative (BRI): “We will take a values-based approach, offering transparency. and good governance to our partners “.

“We want to create links and not dependencies,” she added. She also proposed a ban on products using forced labor, referring to concerns about abuse in China’s Xinjiang region.

In July, EU foreign ministers called on the Commission to develop a strategy to promote European values ​​abroad and to “protect its global interests through sustainable connectivity”.

This follows a series of recent infrastructure projects from Japan and India (Asia-Africa Growth Corridor in 2017) and the United States, Japan and Australia (The Blue Dot Network in 2019) .

And in June, the G7 countries, led by President Joe Biden, agreed on a global infrastructure initiative, dubbed Build Back Better World, which is a loose collaboration that aims to compete with China’s BRI.

Although Global Gateway has yet to be finalized and nothing has been said about the budget, von der Leyen said investments should be a mix of private and public and should prioritize collaboration with the business sector.

” Trusted brand “

“We will connect institutions with investment banks and the business community,” von der Leyen told MEPs. “We want to make Global Gateway a trusted brand around the world. “

This business-oriented approach was greeted by the endorsement of Reinhard Hans Butikofer, MEP from the Greens, who has long advocated for such a program: China has robbed us of a march with its BRI, and we must catch up. our delay. “

Echoing von der Leyen, he added that the global gateway should be a shared effort between government, civil society, business and international finance.

“Companies are ready to join forces and I think companies should help draft the strategy,” adding that a “Global Gateway Business Advisory Board” should be a practical next step. At the time of writing, the committee could not yet respond whether the business community (or civil society) had been consulted during the development of the plan.

Macroeconomist Daniela Gabor, in a 2020 article titled “The Wasington Consensus,” cautioned against finance becoming too dominant in infrastructure investment strategies.

“We cannot rely on private finance to get us out of a climate crisis to which it has systematically contributed. We need to take carbon financiers away from accountability, and we do this by ensuring that the democratic state – not the investors – shows the way forward, ”he added. she wrote in August.

Private investors favor investments in infrastructure that promise a rate of return – “Roads to nowhere”, instead of publicly funded projects that people need.

Global Gateway will be a priority at the next EU-Africa summit in February, said von der Leyen. Africa is a region where China has become the dominant investor in recent years.

According to accounting firm EY (formerly Ernst & Young), China was the largest investor in Africa in terms of total capital, investing more than twice the dollar amount of France or the United States, the two largest investors. .

“We will invest with Africa to create a green hydrogen market that connects the two shores of the Mediterranean,” added von der Leyen.

A recent fiber-optic submarine cable connecting Brazil to Portugal was also cited as an example of the type of investments Global Gateway could generate.



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