Partnership for Global Infrastructure and Investment (PGII): Prospects and Challenges

Introduction

The Partnership for Global Infrastructure and Investment (PGII) emerged on the global stage during the 48th G7 summit held in Germany in June 2022. This collaborative endeavour, led by G7 nations, aims to provide funding for infrastructure projects in developing nations. It serves as a crucial component of the ‘Biden Doctrine’ and represents a revamped iteration of the Build Back Better World (B3W) initiative, originally introduced in June 2021.

B3W itself stemmed from the Blue Dot Network (BDN), an initiative established in 2019 by the United States, Japan, and Australia to evaluate and certify infrastructure development projects worldwide with the goal of mobilizing private capital for international investments.

In 2022, B3W underwent a transformation and was rebranded as the Partnership for Global Infrastructure and Investment (PGII). The participating states of PGII now encompass a diverse group, including Angola, Canada, the Democratic Republic of the Congo, France, Germany, India, Israel, Italy, Japan, Jordan, Saudi Arabia, the United Arab Emirates, the United Kingdom, the United States, and Zambia.

Aims and Objectives:

PGII, in collaboration with the private sector, aspires to mobilize and invest a substantial sum of $600 billion over the next five years. This investment is intended to support values-driven, high-impact, and transparent infrastructure projects in partnership with low- and middle-income countries. While the stated objectives emphasize paving the way for the Fifth Industrial Revolution with a focus on sustainable growth and employee capitalism, there’s an underlying concern about countering Chinese dominance through the Belt and Road Initiative (BRI). Having failed to contain China, the G7 nations are attempting to slow down China’s ascent as a global leader by employing a strategy reminiscent of China’s approach a decade ago.

Four Priority Pillars under PGII:

PGII has identified four key areas for investment:

1. Tackling the Climate Crisis and Ensuring Global Energy Security: This involves promoting clean energy supply chains to combat climate change effectively.
2. Bolstering Digital Information and Communications Technology (ICT) Networks: PGII aims to support the advancement of technologies like 5G and 6G internet connectivity while prioritizing cybersecurity.
3. Advancing Gender Equality and Equity: This pillar underscores the commitment to promoting gender equality in infrastructure development projects.
4. Building and Upgrading Global Health Infrastructure: Investment in global health infrastructure is essential, especially in the wake of global health crises.

Hidden Agenda:

While PGII’s primary goal is to provide an alternative to China’s Belt and Road Initiative, there are underlying motives:

1. Economic Revival: PGII can potentially boost the economies of G7 countries, many of which are facing stagnation or recession. This aligns with the Keynesian approach at the global level.
2. Mobilizing Private Capital: PGII seeks to tap into significant reserves of private capital held in offshore accounts.
3. Reducing Reliance on Chinese Technology: G7 countries aim to decrease developing countries’ dependence on Chinese technology, which could lead them deeper into China’s political and economic sphere.
4. Election Strategy: PGII may also serve as a political strategy, much like how the China card has become a favourite topic for American presidential candidates, particularly in the lead-up to US mid-term elections.

Prospects:

Theoretically, PGII has bright prospects as it aims to fill the huge infrastructural deficit of developing countries, most of which have been their colonies. It may be construed as an atonement of their colonial past

Additionally, the timing of its launch coincides with the slowdown of China’s BRI momentum, partly due to the COVID-19 pandemic.

Challenges:

Despite its potential, PGII faces several challenges:

1. Inadequate Funding: PGII’s planned spending target of $600 billion pales in comparison to the multi-trillion-dollar BRI, which has already invested heavily in numerous countries.
2. Perceived Lack of Sincerity: Developing countries may view PGII as a tool to counter Chinese influence rather than a genuine effort to help them.
3. Financial and Technical Disparities: China possesses greater economic resources and technical expertise to complete ambitious projects, making it difficult for PGII to compete with BRI initiatives.
4. Funding Uncertainty: There is no clear roadmap for securing the necessary funds for PGII, raising doubts about its feasibility.
5. Historical Record: The track record of G7 countries in providing development assistance to poor countries has been subpar, indicating a lack of political will to support sustainable alternatives to the BRI.
6. Legitimacy Concerns: Repeatedly introducing initiatives without adequate funding and implementation may undermine the credibility of the G7 nations in their efforts to counter China’s global ambitions.

Conclusion

In conclusion, while the Partnership for Global Infrastructure and Investment (PGII) holds promise as an alternative to China’s Belt and Road Initiative (BRI), it faces significant challenges, including funding limitations, scepticism among developing nations, and doubts about its ability to match the scope and impact of the BRI. The success of PGII will depend on the collective determination of the G7 nations and their ability to address these challenges effectively.

From the book “International Relations: Basic Concepts and Global Issues”, published by Amazin and available at

International Relations: Basic Concepts & Global Issues: 2nd Edition