Daily Current Affairs : 11-September-2023
The world is changing, and with it, the way nations interact and engage in global trade. One of the latest developments on this front is the proposed India – Middle East – Europe Economic Corridor (IMEC), announced at the 2023 G20 Summit in New Delhi. This initiative is an integral part of the Partnership for Global Infrastructure and Investment (PGII), which is backed by the Group of Seven (G7) countries. In this essay, we will explore the key aspects of PGII, its significance as an alternative to China’s Belt and Road Initiative (BRI), and the challenges it may face.
The Partnership for Global Infrastructure and Investment (PGII)
- Background and Objective
- PGII is a collaborative effort by the G7 nations, comprising the United Kingdom, the United States, Canada, France, Germany, Italy, Japan, and the European Union (EU).
- Its primary goal is to fund critical infrastructure projects like roads, ports, bridges, and communication setups in developing nations. This funding comes from both public and private investment, aiming to boost global trade and cooperation.
- Target
- PGII seeks to mobilize approximately $600 billion from the G7 countries by 2027 to invest in critical infrastructure projects worldwide.
- Principles
- The initiative operates based on the standards and trust principles of the Blue Dot Network (BDN). These principles emphasize transparency, accountability, respect for sovereignty, local labor and human rights, adherence to the rule of law, and sound government practices in procurement and financing.
Timeline of PGII
- Genesis
- The Blue Dot Network (BDN) was established in 2019 by the United States, Japan, and Australia to support high-quality infrastructure projects globally.
- Rebranding
- In 2021, the success of the BDN program led to the adoption of the Build Back Better World (B3W) initiative by the G7. However, this initiative made limited progress.
- In 2022, at the 48th G7 summit in Germany, B3W was relaunched and renamed as the Partnership for Global Infrastructure and Investment (PGII).
Significance: An Alternative to BRI
- BRI Overview
- PGII is viewed as the G7’s response to China’s Belt and Road Initiative (BRI), launched in 2013 by President Xi Jinping.
- BRI aimed to revive ancient trade routes, connecting China to Europe, with China providing loans for infrastructure projects and often awarding contracts to Chinese companies.
- Critiques of BRI
- BRI faced criticism for burdening countries with unsustainable debts, environmental degradation, and corruption.
- India opposed BRI due to its inclusion of the China-Pakistan Economic Corridor through Pakistan-occupied Kashmir.
- Some countries doubted the benefits of enhanced trade connectivity.
- PGII’s Approach
- The G7 asserts that PGII is transparent, focuses on climate-resilient infrastructure, and contributes to gender equality and health infrastructure development.
Challenges to PGII
- Financial Scale
- PGII faces the challenge of raising investments that match China’s capacity, as China can provide higher levels of funding.
- Political consensus within G7 countries is required for committing to such projects, and private-sector participation is uncertain.
- China’s Response
- China is adapting BRI to address its criticisms, emphasizing a ‘Green BRI’ and scaling back on high-risk projects.
Important Points:
Partnership for Global Infrastructure and Investment (PGII):
- Collaborative effort by the G7 countries (UK, US, Canada, France, Germany, Italy, Japan, EU).
- Aims to fund critical infrastructure projects in developing nations through public and private investment.
- Target: Mobilize $600 billion from G7 countries by 2027.
- Operates based on Blue Dot Network (BDN) standards emphasizing transparency, accountability, and more.
Timeline of PGII:
- BDN founded in 2019 to support high-quality infrastructure projects globally.
- B3W initiative adopted in 2021 and relaunched as PGII in 2022 at the 48th G7 summit.
Significance as an Alternative to BRI:
- PGII seen as G7’s response to China’s Belt and Road Initiative (BRI).
- BRI aimed to revive ancient trade routes, but faced criticism for unsustainable debts, environmental issues, and corruption.
- India opposed BRI due to China-Pakistan Economic Corridor.
- PGII focuses on transparency, climate-resilient infrastructure, gender equality, and health infrastructure development.
Challenges to PGII:
- Need to match China’s higher investment capacity.
- Require political consensus within G7 countries.
- Uncertain private-sector participation.
- China adapting BRI with a ‘Green BRI’ approach.
Why In News
The groundbreaking India – Middle East – Europe Economic Corridor (IMEC), unveiled during the 2023 G20 Summit in New Delhi, represents a pivotal initiative within the broader framework of the Partnership for Global Infrastructure Investment (PGII). This ambitious project aims to foster unprecedented economic connectivity and cooperation among regions spanning three continents.
MCQs about PGII: A New Approach to Global Infrastructure
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Who initiated the Belt and Road Initiative (BRI)?
A. G7 countries
B. United Nations
C. China
D. European Union (EU)
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What standards and principles does PGII operate based on?
A. Sustainable development goals
B. Blue Dot Network (BDN) standards, including transparency and accountability
C. Chinese government policies
D. United Nations guidelines
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What is one of the challenges facing PGII in comparison to China’s BRI?
A. PGII lacks political support within the G7 countries.
B. China has a more transparent approach to infrastructure investment.
C. PGII has a higher investment capacity than China.
D. China has a greater focus on climate-resilient infrastructure.
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