G7 raises USD 600 billion against China's Belt and Road project

G7 raises USD 600 billion against China's Belt and Road project

 G7 leaders on Sunday (26/6/2022) agreed to raise USD 600 billion or equivalent to Rp. 8,898 trillion. The funds will be used to finance infrastructure needed by developing countries and counter China's Belt and Road projects. Meanwhile, the funds will be collected from the private and public for five years. President of the United States (US) Joe Biden and other G7 leaders launched the "Partnership for Global Infrastructure and Investment" under a new name at their annual meeting. This year, the G7 leaders' meeting was held in Schloss Elmau, Germany. 

On the occasion, Biden said the US would raise $200 billion in grants, federal funds and private investment over five years. The move is to support projects in low- and middle-income countries that help tackle climate change, as well as global health, gender equality and digital infrastructure. "I want to make it clear. This is not a favor or charity. This is an investment that will benefit everyone," Biden said. The additional hundreds of billions of dollars, Biden continued, could come from multilateral development banks, development finance institutions, sovereign wealth funds and others. 

He added that the move was an opportunity for countries to see the real benefits of partnering with democracies. European Commission President Ursula von der Leyen said countries in the Blue Continent would raise 300 billion euros for the initiative over the same period. It serves as a sustainable alternative to the Belt and Road investment scheme launched by Chinese President Xi Jinping in 2013.
Leaders from Italy, Canada and Japan also talked about their plans. Some of them announced separately. Meanwhile, French President Emmanuel Macron and Prime Minister Boris Johnson were absent, but both countries participated. As is known, China's investment scheme involves development and programs in more than 100 countries. 

The goal was to create a modern version of the trade route from Asia to Europe called the “Silk Road”. White House officials say the plan provides little real benefit to many developing countries. Meanwhile, Friederika Roder, Vice President of the non-profit group Global Citizen, said the investment pledge was a good start for G7 countries to engage in developing countries. 

Such investment measures can also support stronger global growth for all countries. So far, the G7 countries have on average devoted only 0.32 percent of their gross national income to development. That's less than half of the 0.7 percent promised. "In fact, without developing countries, there will be no sustainable world economic recovery," he said.

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