G-7 to take on China, Russia with mega $600b PGII plan

New Delhi: About a year ago on June 12, 2021, in the G-7 Summit at a Carbis Bay resort in Cornwall, UK, the seven richest countries of the world got together to issue a clarion call to set up an alternative to stave off the spreading web of Chinese influence in the form of the ambitious Belt and Road Initiative (BRI). It was called the “Build, Back, Better World” (3BW).

On Monday, the G-7 again announced the official launch of the Partnership for Global Infrastructure and Investment (PGII) plan, which besides advancing security needs, aims to deliver “game-changing projects to close the infrastructure gap in developing countries, strengthen the global economy and supply chains”. Only this time, in the backdrop of the Ukraine conflict and much warming relationship between China and Russia, the PGII has also factored in the adversarial position of Russia and therefore the need to address the two-front threat.

While not naming China in his address, US President Joe Biden mentioned Russia’s aggression while pointing out the criticality of climate and energy. “We’re seeing just how critical this is every day. The entire world is feeling the impact of Russia’s brutal war in Ukraine and on our energy markets.” “We’re making this commitment together as a G7 in coordination with one another to maximize the impact of our work. Collectively, we aim to mobilize nearly $600 billion from the G7 by 2027.”

“And I’m proud to announce the United States will mobilize $200 billion in public and private capital over the next five years for that Partnership,” Biden added. Besides the US’ $200 billion, the EU has already announced €300 billion while the rest is expected to be received from contributions from the other members, totalling $600 billion.

Some notable PGII projects include a 17,000 km long undersea telecommunications cable from Singapore to France that will connect countries across the region with high-speed, reliable connectivity, a solar energy project in Angola among a slew of projects that will significantly enhance G-7 presence in Africa which of late has become a focal area of Chinese interest and influence. It is quite likely that the PGII plan would suffer from the same weaknesses that bogged down further progress of the B3W initiative.

Firstly, there is no clear consensus between the major EU nations like Germany, France and Italy with the smaller nations and also with the US on the direction and end-state as far as the war is concerned. Clearly, Germany, France and Italy do not want a protracted war. Secondly, the G-7 countries are a heterogenous lot with their own unique strengths and weaknesses which makes it difficult to group them all together in an anti-China bandwagon.

Thirdly, the world economy is looking at a looming crisis. Inflation levels are at record highs while the energy and food supplies lie constricted. At a time like this, the resilience and commitment of countries to support the US-led confrontation with Russia and China may waver. Fourthly, the clout of G-7 is no longer what it was. Since 1975 when G-7 was born, the share of the seven richest democracies in the world’s GDP has come down from 80 per cent to 40 per cent as opposed to China’s more than 18 per cent now.