G-7 40 US$ Trillion Program: Development or Rivalry?

Shakeel Ahmad Ramay

Political Economist

 

World is facing huge infrastructure gap, which is widening up with every passing year. MGI, in 2016 estimated that world on average needs to invest US$ 3.3 trillion on infrastructure, everyyear. World is not able to meet the demand and there isa gap of US$ 350 billion. It was calculated that the total gap would be US$ 5.3 trillion till 2030. The projections were made without considering the needs of Sustainable Development Goals (SDGs). MGI study underlined that the inclusion of SDGs will triple the gap and it would be around US$ 15.9 trillion.

Global Infrastructure Hub (GIH) in 2020 came up with its own projections. It underscored that the participating countries would be in need of US$ 94 trillion till 2040. The current trends show that the real investment will be around US$ 79 trillion, which means the gap would be around US$ 15 trillion till 2040. It is pertinent to mention here that projections were made on the basis of data from 56 countries and leaving the rest of world. It quite unfortunate as it is against the spirit of slogan of SDGs “No One Lift Behind”.

China realized the worrisome situation and forwarded hand of cooperation. China started the efforts much before the SDGs commitments, MGI and GIH projections through the policy of Go Global. China in 2013 launched a comprehensive program with the name of Belt and Road Initiative (BRI). China also pitched the Six-One Hundred programs to help the poor and less developed countries.

Unfortunately, Chinese investment was not welcomed by the USA and Western countries. They immediately started anti-China campaigns at one name or other. Now G-7, the representative group of Wests proposed its own program with the name of Build Back Better World (B3W). Investment is good in any form, especially if it helps to bridge the gaps and bring world closer. Unfortunately, it is not the case, as G-7 hastermed B3W a rival program to BRI and Chinese investment. One wonders, why G-7 is presenting it as rival to BRI or China investment or does it have instruments which can qualify the conditions of rivalry? The intentions are clear, they want to undermine China through coercive diplomacy and action.

However, B3W will not able to compete with BRI leave alone the rivalry due to multiple reasons and facts. First, it is well documented fact that 56 countries including G-7 needs US$ 94 trillion for infrastructure till 2040. American Society of Civil Engineers in 2021, highlighted that USA will be facing a gap of US$ 2.6 trillion in next 10 years to meet the needs of investment in infrastructure. Thus, B3W’s US$ 40 trillion will not be able to meet the needs of leading countries, leave alone other countries.

Inclusion of developing and least developed countries will further complicate the situation. For example, World Bank in 2014 highlighted that South Asia would be in need of US$ 2.5 trillion till 2024 to meet the development goals. Independent experts concluded that South Asia was not able to invest the required financial resources. Owning to lack of ability to generate required resources tt is expected that the needs would have been further increased.

Second, B3W is exclusive in nature, as it has been designed to counter China. I am unable to understand, how world will sustain growth by excluding the second largest economy of the world, biggest trader and market of the future. Domestic consumption market in China, is on expansion mode and it was estimated that around 600 million people will join the middle class till 2049 and existing middle class would have been graduated to upper class. It presents huge potential not only to China but also to world.

Third, B3W is not first rival program. USA has already launched a program with the name of Better Utilization of Investment Led to Development (BUILD). USA promoted the program with the hope that private sector will chip in and lead the way. However, program could not produce any result, as USA was not able to support with financial resources and mobilize private sector. Australia also launched an initiative with name of Pacific Fund of US$ 1.46 billion. Japan and India formulated Asia-Africa Growth Corridor, again the only goal was to undermine the Chinese investment. It was propagated with much pump and show but could not deliver on any front.

Apart from these facts, it is extremely important to highlight here that in past West developed by exploiting the less developed countries. West colonized Asian and African countries and plundered their resources. Second, they treated indigenous people with cruelty and showed inhuman behavior. They even did not hesitate to go for genocide of indigenous people. Red Indians in USA and Aboriginal people in Australia are still suffering. UK exploited the sub-continent to extreme and looted its resources. French did not leave any stone unturn to exploit the African countries. Still many African countries are facing hardships due to France.

However, the circumstances have been changed and there is no space for colonization. By keeping in mind ground realities West have invented new tools and means to keep control over resources. They erected Bretton Wood institutes and promoted globalization, which helped them to maintain control. China has challenged the hegemony with better alternatives. West is trying to renew the hegemony and it is one of the objectives of B3W, which seems difficult as now world has alternative.

In this context, the pertinent question would be, will B3W be successful. Yes, it can be successful, if G-7 tries to build cooperation with China and say goodbye to coercive policy. For that purpose, first of all G-7 will have to abandon the words of “rival or countering” and look ways to build connections with BRI and other initiatives. Second, they need to accept that China is now formidable global power and cannot be single out. Lastly, they need to realize that the hegemony of West cannot prolong anymore. So, it’s better to live with new dynamics rather than beating the drum of past.

In conclusion, world needs cooperation not rivalries, as, world is facing multiprong challenges. On top of everything climate change has threatened the very existence of earth. Thus, world need to cooperate. It is pertinent to mention here that China is ready to cooperate, rather China is urging to cooperate. President Xi Jinping is advocating it, as he believes in “world is a community and we share resources and future”. Thus, he presented the idea of “Community with Shared Future”.