Global Gateway Plan: EU | 02 Dec 2021

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.

• Although the plan doesn’t mention China, it is seen as a response to China’s Belt and Road strategy.

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.
    
    • B3W is an international infrastructure investment initiative announced by the Group of Seven (G-7) richest democracies in June 2021.
• 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 21^st 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:
    
    • India has repeatedly said it will not join BRI because it’s key component – the China-Pakistan Economic Corridor (CPEC) – passes through PoK, which is disputed territory between India and Pakistan.
    • Further, in order to counter China’s aggressiveness, India has initiated Act East Policy, SAGAR vision and is part of multilateral projects like Asia-Africa Growth Corridor (AAGC),and “Free and Open Indo Pacific” initiative.

Source: TH