Trade and Investment

G7 pledges to invest $600 billion into infrastructure for developing countries

G7 leaders have pledged to raise $600 billion to fund infrastructure in developing countries.

G7 leaders have pledged to raise $600 billion to fund infrastructure in developing countries. Image: John MacDougall/Pool via REUTERS

Andrea Shalal
Senior Correspondent, Reuters
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Trade and Investment?
The Big Picture
Explore and monitor how Infrastructure is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Long-Term Investing, Infrastructure and Development

  • G7 leaders pledged to raise $600 billion in private and public funds over five years to finance needed infrastructure in developing countries.
  • The investment will support projects in low- and middle-income countries that help tackle climate change and improve global health, gender equity and digital infrastructure.
  • The scheme seeks to build a sustainable alternative to China's older, multitrillion-dollar Belt and Road project.
  • Some believe the pledges are a good start towards greater engagement by G7 countries in developing nations and could underpin stronger global growth.

Group of Seven leaders pledged to raise $600 billion in private and public funds over five years to finance needed infrastructure in developing countries and counter China's older, multitrillion-dollar Belt and Road project.

U.S. President Joe Biden and other G7 leaders relaunched the newly renamed "Partnership for Global Infrastructure and Investment," at their annual gathering being held this year at Schloss Elmau in southern Germany.

G7's Partnership for Global Infrastructure and Investment

Biden said the United States would mobilize $200 billion in grants, federal funds and private investment over five years to support projects in low- and middle-income countries that help tackle climate change as well as improve global health, gender equity and digital infrastructure.

"I want to be clear. This isn't aid or charity. It's an investment that will deliver returns for everyone," Biden said, adding that it would allow countries to "see the concrete benefits of partnering with democracies."

Biden said hundreds of billions of additional dollars could come from multilateral development banks, development finance institutions, sovereign wealth funds and others.

Europe will mobilize 300 billion euros ($317.28 billion) for the initiative over the same period to build up a sustainable alternative to China's Belt and Road Initiative scheme, which Chinese President Xi Jinping launched in 2013, European Commission President Ursula von der Leyen told the gathering.

Discover

What is the World Economic Forum doing on infrastructure?

The G7 leaders of Italy, Canada and Japan also spoke about their plans, some of which have already been announced separately. French President Emmanuel Macron and British Prime Minister Boris Johnson were not present, but their countries are also participating.

China's investment scheme involves development and programs in over 100 countries aimed at creating a modern version of the ancient Silk Road trade route from Asia to Europe.

White House officials said the plan has provided little tangible benefit for many developing countries.

US President Joe Biden attends a working lunch with other G7 leaders at the Yoga Pavilion, Schloss Elmau in Kuren, Germany
US President Joe Biden attends a working lunch with other G7 leaders to discuss shaping the global economy at the Yoga Pavilion, Schloss Elmau in Kuren, Germany Image: Kenny Holston/Pool via REUTERS

Chinese foreign ministry spokesman Zhao Lijian defended the track record of BRI when asked for comment at a daily briefing in Beijing on Monday.

“China continues to welcome all initiatives to promote global infrastructure development," Zhao said of the G7's $600 billion plan.

"We believe that there is no question that various related initiatives will replace each other. We are opposed to pushing forward geopolitical calculations under the pretext of infrastructure construction or smearing the Belt and Road Initiative.”

Have you read?

G7 flagship projects

Biden highlighted several flagship projects, including a $2 billion solar development project in Angola with support from the Commerce Department, the U.S. Export-Import Bank, U.S. firm AfricaGlobal Schaffer, and U.S. project developer Sun Africa.

Together with G7 members and the EU, Washington will also provide $3.3 million in technical assistance to Institut Pasteur de Dakar in Senegal as it develops an industrial-scale flexible multi-vaccine manufacturing facility in that country that can eventually produce COVID-19 and other vaccines, a project that also involves the EU.

The U.S. Agency for International Development (USAID) will also commit up to $50 million over five years to the World Bank’s global Childcare Incentive Fund.

Friederike Roder, vice president of the non-profit group Global Citizen, said the pledges of investment could be "a good start" toward greater engagement by G7 countries in developing nations and could underpin stronger global growth for all.

G7 countries on average provide only 0.32% of their gross national income, less than half of the 0.7% promised, in development assistance, she said.

"But without developing countries, there will be no sustainable recovery of the world economy," she said.

Loading...
Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Global trade growth could more than double in 2024. Here’s why

Andrea Willige

May 14, 2024

About Us

Events

Media

Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum