On the first of December 2021, the EU launched its new intiative the Global Gateway having for purpose to invest in the future, by helping developing countries with energy, digital, transport, education, health etc. This initiave follows the EU engagement taken in the COP21 and G7 commitments for Build Back Better World last June, meaning that this development needs to occur in a sustainable way. However, this program sold as pure and generous investment for developed countries, might hide an ambition to thwart the Chinese belt and road initiative, with the african continent as the highest stake.
The linkage of equal actors
This new EU strategy will mobilise up to three hundred billion euros in investments until 2027. It relies mostly on financial tools such as the Neighbourhood development and international cooperation instrument (NDICI), the instrument for pre-accession assistance (IPA III), Invest EU etc., which will allows the EU to leverage public and priavte investments in priority areas. To appear more advantagious, the EU is also considering to complement the already existing export creadit arrangement to enable a greater playing field for EU businesses in third countries markets, in which foreign competitors benefits from national aids. Those EU resources, member states, EU and national financial institutions for development and private investment will contribute to narrow the gap in infrastructure investment, which was of 2.7 trillion dollars before covid. However, those investments are value-based. Indeed, in order to profit from it, developing countries would have to abide to democratic values, which the EU sees as the pillar for long-term benefits for people around the world. Those investments could be a real asset in the development of developing countries, especially with the EU commitment of developing partnership with equal partners. Nevertheless, the colonial legacy of some EU countries may lead to uncertainty and the potential beneficiaries prefering chinese money.
A EU’s strategy to counter the chinese belt and road initiative?
Despite the fact that China has not been mentionned during the program presentation, with intention or not the Golbal Gateway will be in competition with the Chinese intiative. China launched the belt and road intiative in 2013 and already invested in one hundred thirty-eight countries, which has for main objectives to connect China to Asia, Europe and Africa via land and maritime networks. The african contient as being the principal target for both program, EU can be presented now as an alternative or a leverage to get better loans from China. Even if the twenty seven member states together are the first commercial partners of Africa with two hundred billions euro in 2018, for one hundred twenty-five billions euro for China, the chinese financing in the continent has hurt european companies.
Therefore, the EU focuses mainly on the differences between both programs. First, the nature of fundings are different. China is providing loans whereas the EU provides for public and private investments. EU is thus coming with transparent and more favourable fundings, creating strong and sustainable links instead of China creating dependence. It is a matter of facts that because Sri Lanka was incapable of paying back its debt for its Hambandola port, it had to lease it for ninety-nine years, or Montenegro, which made build a highway by chinese companies could not pay its credits so lands have confiscated. Those debt-trap are all over chinese contracts and may worsen the situation of developing countries, which at the first place were only seeking funds to develop and grow.
Besides, the EU initiative is more modern, focusing on investments in future-oriented, whereas China’s strategy is mainly based on roads construction, railroad or renovation of bridges and ports. Nonetheless, even if those loans do not reflect twenty first centuries ambitions, it may fit the needs of the developing countries at the moment. In order to think about the future, they need to settle a basis from which it could improve, and those basis encompass road and railways. Moreover, the chinese initiative evolved lately, thus this criticism cannot stand.
Furthermore, the EU plan intrinsically entails defaults, comparing it with the chinese initiatives. Indeed, the EU plan foresees investments up to three hundreds and forty billions dollars, where the chinese one entails one thousand billions dollars of loans. In addition, the plan has been launched at the end of 2021, when the the chinese plan started in 2013. Is not it too late? The chinese intiative is a well-oiled machine, capable of mobilising funds quickly, which at first sight is what matters the most for the developings countries. The amount of money available and the values conditions may frighten potentital beneficiaries. Only one out of eleven southeast asian states is considered as politically free and Cambodia, and Laos are ranked at the bottom of the transparency International’s corruption perceptions index. Chinese money with no string attached to domestic politics may be preferred by those countries, which would like to avoid any interference with their domestic policies.
However, if it was to be considered that the EU Global Gateway program was launched to create a synergy with the US and Japan, great achievements could occur. The US have announced its Build Back Better Workd initiative, which has many in common with the EU Global Gateway and Japan is investing in Indonesia, Malaysia, Philippines, Taiwan and Vietnam for a still-growing amount of two hundred fifty-nine billion dollards. The only consideration then shall be to prioritize investments since the EU program’s budget is not that wide.
Bibliography
CNN ‘Europe unveils its $340 billion answer to China’s Belt and Road infrastructure intiative’ <https://edition.cnn.com/2021/12/01/business/global-gateway-eu-china-belt-road/index.html> accessed on the 12th of January 2022
DW ‘Can the EU’s global investment scheme rival China’s Belt and Road?’ <https://www.dw.com/en/can-the-eus-global-investment-scheme-rival-chinas-belt-and-road/a-60068654> accessed on the 12th of January 2022
European commission ‘Global Gateway: up to 300e billion for the European Union’s strategy to boost sustainable links around the world’ <https://ec.europa.eu/commission/presscorner/detail/en/ip_21_6433> accessed on the 10th January 2022
France 24 ‘With its ‘Global Gateway’, EU tries to compete with China’s belt and Road initiative’ <https://www.france24.com/en/europe/20211203-with-its-global-gateway-eu-tries-to-compete-with-the-china-s-belt-and-road> accessed on the 12th of January 2022
Les echos ‘Global Gateway: 4 questions sur le plan européen anti-routes de la soie chinoises’ <https://www.lesechos.fr/monde/europe/global-gateway-4-questions-sur-le-plan-europeen-anti-routes-de-la-soie-chinoises-1369001> accessed on the 10th of January 2022
Ouest France ‘Trois questions sur „Global Gateway”, ce plan à 300 milliars de l’Europe pour contrer la Chine’ <https://www.ouest-france.fr/europe/ue/projet-global-gateway-comment-l-europe-entend-contrer-l-influence-de-la-chine-7f970298-52b8-11ec-bfae-9f51653fbe56> accessed on the 12th of January 2022
By The European Institute for International Law and International Relations.
