Thursday, July 7, 2022

The EU intends to spend €300 billion on development aid to compete with China

HomeNewsThe EU intends to spend €300 billion on development aid to compete...

The European Commission proposed on Wednesday a proposal to allocate $340 billion in governmental and non – governmental infrastructure spending globally, in response to China’s Belt and Road initiative.

“Global Gateway aims to mobilise up to 300 billion euros in investments between 2021 and 2027… by bringing together the EU’s, member states’, European financial institutions’, and national development financial institutions’ resources,” according to a commission paper.

The Global Gateway plan makes no reference to China’s longer-standing international infrastructure agenda — but EU leader Ursula von der Leyen described it as a “roadmap for significant investment in infrastructure development worldwide.”

The funds would not come from the EU or member states’ treasuries, and the proposal will need support from international organisations and the private sector to achieve even a fraction of its goal.

China announced its worldwide investment initiative, dubbed Belt and Road, in 2013, as a signature initiative of President Xi Jinping. Beijing said that by 2020, it will have spent $139.8 billion, includes $22.5 billion alone last year.

Officially, it seeks to create land and marine infrastructure that will improve China’s connectivity to Asia, Europe, and Africa for commerce and growth, and it has partnered with other countries.

The West, on the other hand, views it as a means for China to exert influence over poorer nations. They accuse Beijing of pushing developing nations to incur excessive debt and argue that the opaque contract procedure is subject to fraud.

China maintains that it protects its partners’ sovereignty while providing financing for cooperative projects, while detractors allege that Beijing’s contractual provisions disregard human, labour, and environmental rights violations.

The EU policy is an outgrowth of a proposal by the G7 to provide poor nations with an alternative to the Belt and Road Initiative, which was unveiled in June just at industrial powers’ meeting in Cornwall.