In a functioning market system, products improve because of rivalry. That rivalry is nothing but competition where players work hard to improve products and price positioning. In geopolitics, that also seems to be the case. When there are choices, good things happen. The news today is that the club of rich nations, the G7, is now being inspired by China’s Belt and Road initiative: “G7 leaders have detailed plans to mobilise $600bn in funding for the developing world in a move seen as a counter to China’s Belt and Road plan.”
Simply, G7 is now getting cheat sheets from China. I have written here that the neglect of the West on the affairs of Africa, Latin America and other developing regions of the world, will hurt them. See the case of Russia in Ukraine, who wants to get entangled by taking a non-neutral position in Africa? Few, despite the pressure from the West. There is a reason for that: Russia feeds most parts of Africa through fertilizers, farming supports and other agro-focused programs.
President Joe Biden promised an infrastructure investment for people of “all nations” as the Group of Seven (G7) launched its global infrastructure initiative from the Bavarian Alps, Germany. The plan will see $600 billion ($200 billion from the U.S.) of investment in healthcare, climate and gender equality, among other things. It’s a bid to expand “stability” in developing nations — an increasingly critical move given Russia’s invasion of Ukraine. In contrast to China’s investments in Africa and Latin America, Biden said the G7 investments were based on “global best practices” and “shared values.” (LinkedIn)
Then scale that to China, you have no chance. If China goes to war with Taiwan, the Western world may be surprised that most parts of the non-West alliance will not condemn China. Simply, China has built roads into state capitals around the developing world and has real influence.
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But do not count out Washington and London with Brussels: they want a massive reset as they have seen the independence of these “3rd world countries” considering the ways they have cooperated on the Ukraine sanctions. And that reset will mean, matching whatever China is doing in Africa, Latin America, etc.
That is the reason they plan to spend that $600 billion – to buy back African, Latin American, etc capitals. Today, if you travel from Abuja, Nairobi, etc to Beijing, you come back with cash. Try the same to London or Washington, it is a line of credit. These African leaders hate that. Right now, G7 has got the message: if you do not change, the new world order will be built outside your global influence.
Indeed, China has provided alternatives to most parts of the world; G7 now needs to match what China has on the table. That is not bad in the grand scheme of things.
G7 leaders have detailed plans to mobilise $600bn in funding for the developing world in a move seen as a counter to China’s Belt and Road plan. The Partnership for Global Infrastructure and Investment (PGII) relaunches a scheme unveiled at last year’s G7 talks in England. US President Joe Biden said the plan would deliver returns for everyone.
China’s multi-trillion dollar infrastructure initiative is criticised for hitting nations with too much debt. “I want to be clear. This isn’t aid or charity,” Mr Biden said of the G7’s PGII scheme. “It’s an investment that will deliver returns for everyone.” The scheme would allow countries to “see the concrete benefits of partnering with democracies,” the US president added.
The plan calls on G7 leaders to raise $600bn over five years to fund the launch of infrastructure projects in middle and low-income countries.
The US has promised to raise $200bn (£162bn) of the total through grants, federal funds and private investment, while the EU has announced a further 300bn euros (£257bn).
The initiative will be geared towards tackling climate change, improving global health, achieving gender equity and building digital infrastructure.
[…]
The plan has been pitched as a way to counter China’s ambitious Belt and Road Initiative (BRI). Launched by Chinese president Xi Jinping in 2013, the BRI provides financing for emerging countries to build infrastructure like ports, roads and bridges.
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Comment: Prof…So, what’s the implication of this for the businessmen/women in Alialia, Ogbete, Nkwor-Nnewi, Ochancha, and Alaba international markets?
My Response: Possibly if there are choices, Nigeria can borrow at better rates from London than Beijing. If that happens, our debt servicing load will drop. And if that happens, the Ogbete, etc will be remembered by Abuja since Nigeria will save funds and then invest in things that will help them. Those things include having more funds for universities, water boards, etc. What Nigeria spends servicing its debts can fund a good university system, decent health system, clean water, etc. It is a massive opportunity cost.
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When you lose the love you once enjoyed, it can be both frustrating and depressing, because competing for attention from your ex is never easy; that is the position our ridiculous G7 are currently in. Hear them out:
“The initiative will be geared towards tackling climate change, improving global health, achieving gender equity and building digital infrastructure.” What is their own definition of global health? Because once they start mentioning things Africans don’t want to hear, they will be ignored again. And how many genders have they settled for? Once it passes male and female here, they do not have many listeners any more.
The G7 want to build infrastructures in developing countries? Who will fund their ballooning pension needs, because building infrastructures means you want most of the people from there to stay back in their continent, do they really want that? The agents of instability are preaching development, quite paradoxical.
These guys have so much baggage that not everyone wants to hear from them anymore, so they really need to work hard, if they want to be noticed. This continent used to be their turf, now China, Russia and other ‘miscreants’ are winning territories. Let G7 keep talking about non essentials.