Context:
Recently, the Union Minister for Commerce and Industry participated in the Investor Forum of the Partnership for Global Infrastructure and Investment (PGII) & Indo-Pacific Economic Framework for Prosperity (IPEF).
Relevance:
GS II- International Relations
Dimensions of the Article:
- What is the PGII?
- What kind of projects will the PGII undertake?
What is the PGII?
- The PGII is being seen as the G7’s counter to China’s multi-trillion dollar Belt and Road Initiative (BRI) to build connectivity, infrastructure, and trade projects in Asia, Europe, Africa, and Latin America.
- The West has been sceptical of the BRI, since it was launched in 2013 by President Xi Jinping, as it was considered to be part of China’s larger strategy to increase geopolitical influence in Asia and other developing countries.
- The U.S., along with G7 partners the U.K., Japan, France, Canada, Germany, Italy, and the European Union (EU), had in 2021 announced the launch of the Build Back Better World (B3W) with the aim of narrowing the $40 trillion infrastructure gap in the developing world.
- PGII is therefore, a relaunch of Mr. Biden’s B3W plan.
- The factsheet put out by the White House described the PGII as a “values-driven, high-impact, and transparent infrastructure partnership to meet the enormous infrastructure needs of low and middle-income countries and support the United States’ and its allies’ economic and national security interests”.
Aim:
- The G7 members aim to collectively mobilise $600 billion by 2027 to invest in sustainable and quality infrastructure projects in developing countries, including India, and strengthen global supply chains.
- Mr. Biden announced the country’s pledge to channel $200 billion in grants, public financing, and private capital over the next five years for the PGII.
- European Commission President declared Europe’s pledge of mobilising 300 billion euros for the partnership over the same period.
What kind of projects will the PGII undertake?
- All PGII projects will be driven by the pillars that will define the second half of the 21st century.
- The G7 grouping aims to tackle the climate crisis and ensure global energy security through clean energy supply chains.
- The projects will focus on bolstering digital information and communications technology (ICT) networks facilitating technologies such as 5G and 6G internet connectivity and cybersecurity.
- The projects aim to advance gender equality and equity, and lastly, to build and upgrade global health infrastructure.
- The U.S International Development Finance Corporation (DFC), along with the G7 nations and the EU are disbursing a $3.3 million technical assistance grant to build a vaccine facility in Senegal, having a potential yearly capacity of manufacturing “millions of doses of COVID-19 and other vaccines”.
- In India, the U.S. DFC will invest up to $30 million in Omnivore Agritech and Climate Sustainability Fund 3, an impact venture capital fund that invests in entrepreneurs building the future of agriculture, food systems, climate, and rural economy in India.
