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Global Gateway Plan: EU

  • 02 Dec 2021
  • 5 min read

Why in News

Recently, the European Commission has announced a plan, called Global Gateway, to mobilise EURO 300 billion by 2027 in public and private infrastructure investment around the world.

Key Points

  • About Global Gateway Plan:
    • Developmental Dimensions: With Global Gateway, the EU, in a Team Europe approach, will offer its partners a response to the urgent needs:
      • To develop sustainable and high quality digital, climate and energy and transport infrastructures.
      • Strengthen health, education and research systems across the world.
    • Funding: To finance the project, the EU will use its European Fund for Sustainable Development Plus.
      • Under this, 40 billion euros are made available in guarantee capacity, and will offer grants of up to 18 billion euros from external assistance programs.
      • The plan will need funding from international institutions and from the private sector if it is to get anywhere near its target.
      • The financing will be done under fair and favorable terms in order to limit the risk of debt distress.
    • Offshoot of B3W Project: The EU strategy is an offshoot of the Build Back Better World (B3W) Initiative.
  • About China’s Belt And Road Initiative:
    • About: The BRI project was launched in 2013, it broadly aims to facilitate cross-border transportation of goods, access to energy, creating demand for existing excess capacity in Chinese industries.
      • Officially, it aims to develop land and sea infrastructure to better connect China to Asia, Europe and Africa for trade and development, and it has found many partners around the world.
      • China had an overall exposure of investment of around USD 750 billion between 2013 to mid-2020.
      • China argues that it respects its partners’ sovereignty while providing loans that benefit joint projects, while critics say Beijing’s contractual terms ignore abuses of human, labour and environmental rights.
    • BRI’s Criticism: BRI project has been heavily criticized by the western world for the following reasons:
      • China’s Debt Trap Policy: BRI is being seen as a part of China’s debt trap policy, wherein China intentionally extends excessive credit to another country with the intention of extracting economic or political concessions from the debtor country.
        • The western countries see it as a tool for China to influence poorer countries.
        • They criticise China for inciting emerging economies to take on too much debt, and allege the secretive tender process is prone to corruption.
      • New Colonialism: They have attacked the initiative as new colonialism, or the Marshall Plan for the 21st century.
      • Dual Nature of Product: Also, projects like China-Pakistan Economic Corridor (CPEC), building of Colombo Port City Project in Sri Lanka are not only commercial in nature but have strategic implications too.
    • India’s Stand:

Source: TH

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