The "Global Infrastructure Initiative" that Biden will launch is just a replacement for the failed "Rebuild a Better World" initiative he launched at the G7 summit last June. Photo: Xinhua News Agency
According to Bloomberg, U.S. National Security Adviser Sullivan recently revealed that Biden will formally launch the "Global Infrastructure Initiative" at the Group of Seven (G7) Summit in Germany at the end of June.
Sullivan said the new initiative covers global infrastructure, health and digital infrastructure, providing an alternative to China's Belt and Road Initiative.
What are the characteristics of this new initiative, and can it play a role in "balancing China"?
On May 3, 2021 local time, the G7 Foreign Ministers' Meeting opened in London, the capital of the United Kingdom, marking the first face-to-face meeting of representatives of the G7 in nearly two years. Photo: Xinhua News Agency
Alternative to the Rebuilding a Better World initiative
The "Global Infrastructure Initiative" that Biden will launch is reminiscent of his Build back better world (B3W) initiative he launched at the G7 summit last June.
Like Biden's upcoming Global Infrastructure Initiative, B3W is positioned as an alternative to China's Belt and Road Initiative. The difference is that B3W also proposes so-called "soft infrastructure construction goals" in addition to the construction of physical infrastructure. There were four soft targets set at the time: climate change, health, digital facilities and gender equality.
B3W is clearly not a qualified proposal. It is all-encompassing, piled up with many unrelated and inexplicable cluttered concepts, but there are few real investment projects, so it is doomed to attract people. Singh, the deputy national security adviser to the United States, went to the "back garden" of the United States to lobby Colombia, Ecuador, and Panama, but he did not return.
Biden's upcoming Global Infrastructure Initiative deletes half of B3W's concept of "soft infrastructure" and retains only health and digital construction. Although some concepts have been reduced, I am afraid that it is difficult to advance.
Although the US Congress eventually passed the Biden administration's domestic infrastructure bill, after being deducted seven times and eight times, it only passed the customs at a scale of $1.2 trillion, and there is still a huge gap. Photo: Xinhua News Agency
The United States' own large infrastructure is also "three shortages"
Another reason for the dubious credit of the Global Infrastructure Initiative is that the United States' own large infrastructure is not strong enough.
After the rise of large-scale infrastructure in the United States after World War II, it basically stopped in the 21st century, focusing on repairs. In addition to the low-altitude routes with more than 8,000 airports, which can still maintain the lead, most of the railways, roads, bridges and other facilities have become obsolete and backward.
The American Society of Civil Engineers evaluates U.S. infrastructure every four years, most recently in 2021, with a C+ score and the highest score in more than 40 years. The previous score was long-term D. Rooted in the World Economic Forum's Global Competitiveness Report, the United States ranked only 13th in the world in 2019 in a broad measure of infrastructure quality.
U.S. infrastructure has stagnated in the last 20 years because of three deficiencies: lack of consensus, lack of investment, and lack of labor.
As a country on wheels, the United States is not interested in public infrastructure other than low-altitude routes, and the payback period is too long, so there is no consensus. Biden's domestic infrastructure bill after taking office was resisted within the Democratic Party. In the end, it was deducted in Congress and passed the threshold with a scale of $1.2 trillion. Some studies believe that the actual gap in the recovery of infrastructure facilities in the United States will reach $3.5 trillion. In addition, the United States is seriously lacking in foundation materials such as civil workers and engineers to reinforced cement.
Biden's domestic infrastructure bills are struggling to advance, and the Global Infrastructure Initiative hopes to raise hundreds of billions of dollars, and where it comes from is even more difficult.
On April 5, 2021, local time, drone photos showed that the Dan Ryan Expressway in Chicago, USA, was being rebuilt. After entering the 21st century, the domestic infrastructure in the United States is mainly repaired. Photo: Xinhua News Agency
The G7, which has a huge funding gap, can't help either
In fact, the global infrastructure gap is indeed huge. The G20 Global Infrastructure Outlook report released in 2018 estimates that there will be a $15 trillion investment gap in global infrastructure by 2040. This obviously does not take into account digital infrastructure.
Previously, the Asian Development Bank estimated that from 2016 to 2030, Asia alone would need $1.7 trillion a year in infrastructure investment totaling $26 trillion. Among them, power facilities need $14.7 trillion to invest, transportation needs $8.4 trillion, and communications need $2.3 trillion.
Biden's Global Infrastructure Initiative, which focuses on the Indo-Pacific region, aims to compete with China. Because it is difficult to raise enough money on its own, the United States is clearly looking to the G7 countries for help.
However, European countries in the G7 also currently have a "global gateway" infrastructure plan, which aims to raise 300 billion euros by 2027. This is already very difficult to achieve.
Because the average sovereign debt of European countries as a proportion of GDP is now more than 90%, which is higher than during the European debt crisis. The EU's sovereign debt discipline waiver will expire at the end of this year, and if it is not extended, many EU countries will face a new round of sovereign debt crisis. Therefore, the European countries in the G7 are bound to have no spare strength to cooperate with Biden's new initiative that entrains the geopolitical interests of the United States.
Overall, Biden's upcoming Global Infrastructure Initiative is another pie. Previously, the United States, Japan and Australia had jointly launched the Blue Dot Network initiative for emerging markets, with the goal of providing options outside of China's "Belt and Road" initiative, and the results were also unsuccessful.
Of course, it can't be said that Biden's new pie this time is worthless — at least, this incident highlights the uneasiness and helplessness of the United States forced to follow China's "Belt and Road" initiative on the global agenda.
Written by / Xu Lifan (Columnist)
Editor / He Rui
Proofreading / Wang Xin