The Group of Seven (G7) economic powers are planning a massive infrastructure initiative in poorer countries, in a bid to provide a counterweight to China's multitrillion-dollar Belt and Road Initiative dubbed the “New Silk Road.”
“We know there is a huge need for infrastructure, in Africa for example. It is in our interest that Africa develops in an economically sensible way,” German Chancellor Angela Merkel said Saturday on the sidelines of the G7 summit in south-west England.
“You can't just say: China will do it,” Merkel said, adding that a special working group among the seven nations would tackle the issue.
US officials who earlier announced the initiative, called Build Back Better for the World, said the scheme would help close the 40 trillion dollars ($A52 trillion) worth of infrastructure needed in developing countries.
The initiative is expected to be included in the leaders' final communique at the end of their three-day summit on Sunday.
While no concrete financial commitments were made, the White House said the US, G7 partners, the private sector and other stakeholders would “soon” collectively mobilise hundreds of billions for infrastructure investments in low and middle-income countries.
The infrastructure development would be carried out in a “transparent and sustainable manner – financially, environmentally, and socially” and offer recipient countries and communities “a positive vision and a sustainable, transparent source of financing to meet their infrastructure needs,” a statement said.
“This is not about making countries choose between us and China; this is about offering an affirmative, alternative vision and approach that they would want to choose,” a senior official in the Biden administration said.
The US accuses Beijing of lacking transparency, poor environmental and labour standards, and taking an approach that leaves many countries worse off in the end.
China's “New Silk Road” initiative is controversial. Beijing is investing in roads, rail lines, ports and other infrastructure projects to build new trade connections to Europe, Africa, Latin America and in Asia.
That process sees China investing in countries that would otherwise struggle to access international aid.
Critics warn that the approach locks poorer countries into a debt trap and political dependency and circumvents environmental protections. Furthermore, Chinese companies are often the only ones involved.
“It's not at all about being against something, we are for something,” said Merkel in reference to China's ambitions.
“If you are to be completely honest, none of our financing instruments are as fast as they often need to be in developing countries,” she said, advocating that G7 states “become faster and more efficient” on these issues.