Russia’s war in Ukraine and China’s growing global influence top Biden’s agenda during major visit to Europe
President Biden on Sunday sought to rally America’s key allies to stand united against Russia’s war in Ukraine while announcing a global infrastructure investment partnership between several of the world’s largest state-aligned economies. United to counter China’s growing influence in Africa, Asia and Latin America.
The infrastructure investment partnership, which has been criticized for being a rehash of past initiatives that have struggled to gain traction globally, was the centerpiece of the Group’s opening leadership meetings of the seven major industrial nations in Germany.
Mr Biden, who appeared in the Bavarian Alps alongside his German, French, British, Canadian, Italian and Japanese counterparts, said the investment partnership will mobilize $600 billion of “public and private capital” from the countries of the G-7 for projects that will show developing countries “the concrete benefits of partnering with democracies”.
The dollar figure is higher than anything previously announced by Western powers to counter the hundreds of billions of dollars China has doled out in infrastructure loans around the world over the past decade.
Still, Sunday’s announcement risked being overshadowed by the more immediate crisis stemming from Russia’s war in Ukraine.
Aides said much of the G-7’s behind-the-scenes action so far has focused on preventing economic fallout from the war in Ukraine that could fracture the global coalition imposing sanctions on Russia.
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Concerns about the coalition have grown in recent weeks amid fears Moscow could trigger a growing energy crisis by cutting off natural gas flows to Europe.
“We have to make sure we all stick together,” Biden said in a first round of public remarks on Sunday after a pre-summit meeting with German Chancellor Olaf Scholz, who holds the G-7. rotating presidency and hosts the gathering at Schloss Elmau castle.
“You know, we’re going to keep working on the economic challenges that we’re facing, but I think we’re overcoming all of that,” the president said.
British Prime Minister Boris Johnson called on other G-7 leaders not to give in to “fatigue” over Russia’s invasion of Ukraine, even as Moscow appeared to be trying to preempt the summit and a NATO rally later in the week accelerating the pace of attacks in Ukraine.
Russian forces unleashed a barrage of missile strikes over the weekend in Ukraine. The G-7 countries reacted by announcing their intention to ban Russian gold.
A formal announcement on the gold ban is expected by Tuesday before G-7 leaders wrap up their summit. The NATO gathering begins on Wednesday in Madrid.
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Mr Biden is expected to attend the NATO summit, where Ukraine is expected to take center stage alongside talks on Finland and Sweden joining the alliance despite Turkish resistance.
Officials noted on Sunday that gold is Russia’s second-biggest export after energy. Banning imports, they said, would make it harder for Moscow to participate in global markets.
Mr Johnson said the ban “will hit Russian oligarchs directly and strike at the heart of Putin’s war machine”.
“Putin is wasting his dwindling resources on this useless and barbaric war. He is financing his ego at the expense of the Ukrainian and Russian people,” said the British Prime Minister. “We must deprive the Putin regime of its funding.”
Rebranding ‘B3W’
The United States and other democracies have been trying for several years to craft an effective economic strategy to counter China’s growing influence over governments in much of the developing world.
The G-7 partnership announced responses to China’s Belt and Road Initiative. Western officials have argued that Beijing’s program encourages autocracies.
The Trump administration has often called the Chinese program predatory. He said the Communist Party’s goal in Beijing was to burden the economically weaker nations with debt that could later be alleviated in exchange for the Chinese government’s access to natural resources and other forms of influence.
US officials have struggled to come up with concrete alternatives. The Trump administration introduced reforms that included the creation of the US International Development Finance Corp., backed by $60 billion to inspire private investment in developing countries around the world.
Mr. Biden has tried to broaden the approach through the G-7. At last year’s summit, he announced the Build Back Better World (B3W) initiative to try to inspire private investment from wealthy democratic countries toward infrastructure and other needs in the developing world.
Sunday’s announcement was largely a reframing of the B3W initiative under a different name, and it remains to be seen whether the president has the geopolitical capital to steer the initiative toward tangible results.
Mr Biden pledged that the United States will “mobilize $200 billion in public and private capital over the next five years” for the initiative, now officially called the Global Infrastructure Partnership.
The president said the partnership will direct the money to areas “essential to sustainable development and our shared global stability: health and health security, digital connectivity, gender equality and equity, climate and energy security”.
Early initiatives include a $2 billion investment in a solar farm in Angola in South West Africa, $320 million to build hospitals in Côte d’Ivoire in West Africa, and $40 million in dollars to promote regional energy trade in Southeast Asia.
Mr Biden said some $335 million in private capital was being mobilized to provide secure networking equipment in Africa, Asia and Latin America. He said the US government had backed a successful bid by an American company, SubCom, for a $600 million contract to build a global undersea telecommunications cable.
“This cable will stretch from Southeast Asia, through the Middle East and the Horn of Africa, to Europe,” the president said. “This will be essential to meet the growing demand for reliable security and high-tech connectivity in three key regions of the world.”
Promising billions
The administration has done little to spell out how it will inspire investments worth hundreds of billions of dollars from private companies.
Some analysts are skeptical that the United States’ appeal for private sector money from American companies and the G-7 will yield substantial results.
“Reviving America’s commitment to infrastructure is valiant but faces two big challenges,” said Satu Limaye, who directs the Washington office of the East-West Center and the Asia Matters for America initiative.
“American private money has plenty of places to look for returns, and overseas infrastructure doesn’t look very attractive yet,” Mr. Limaye told The Washington Times. “Part of the reason it’s unattractive is that countries that seek heavy spending on infrastructure are hardly paragons for the attractiveness of private sector investment in the infrastructure space.”
Despite these worries, Mr. Biden appeared to be in full-throttle mode as he touted the G-7 infrastructure investment partnership as a source of revenue for everyone involved.
“I want to be clear: this is not about aid or charity; it’s an investment that will pay off for everyone, including the American people and the people of all our nations,” the president said in Germany. “It will boost all of our economies and it’s a chance for us to share our positive vision for the future.”
Mr. Biden appeared to avoid portraying the initiative as an effort to contain China, ostensibly to avoid giving the impression that the G-7 is on the defensive globally.
However, the president’s top aides made it clear that the investment partnership was aimed at countering China.
National Security Advisor Jake Sullivan said at an event earlier this month at the Center for a New American Security think tank in Washington that the G-7 initiative focuses on growing “global infrastructure – physical, sanitary and digital infrastructure which we believe can provide an alternative to what the Chinese are offering.
Although the president avoided mentioning China by name, he stressed that the investment partnership was centered on mutually supportive democracies.
“When democracies demonstrate what we can do, all we have to offer, I have no doubt that we will win the competition every time,” Mr Biden said.
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