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European Union unveils Global Gateway Project

  • Category
    International Relations
  • Published
    7th Dec, 2021

Context

Recently, the European Commission has announced a plan, called Global Gateway, to mobilize 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.

Background

  • The EU has a long track record as a trusted partner to deliver sustainable and high quality projects, taking into account the needs of its partner countries and ensure lasting benefits for local communities, as well as the strategic interests of the European Union.
  • Now, this new initiative, Global Gateway is about increasing investments promoting democratic values and high standards, good governance and transparency, equal partnerships, green and clean, secure infrastructures and that catalyse private sector investment.

Analysis

What is Global Gateway Project?

  • It is the new European Strategy to boost smart, clean and secure links in digital, energy and transport and strengthen health, education and research systems across the world.
  • It stands for sustainable and trusted connections that work for people and the planet-
    • to tackle the most pressing global challenges, from climate change and protecting the environment
    • to improving health security
    • boosting competitiveness and global supply chains
  • Global Gateway aims to mobilize up to €300 billion in investments between 2021 and 2027 to underpin a lasting global recovery, taking into account our partners needs and EU's own interests.
  • The project will probably extend the remit of the European Fund for Strategic Investment, or create a similar institution, which can act as a guarantor for riskier investments in the ‘Global South’.
  • The EU has indicated it especially wants to compete for infrastructure development projects in Africa.
  • Global Gateway and the US initiative Build Back Better World will mutually reinforce each other.

Build Back Better World (B3W)

The B3W, as it is called, is an international partnership aimed at supporting projects related to climate, health, digital technology and gender equality in developing countries.

How will it be implemented?

  • Through a Team Europe approach, Global Gateway will bring together the EU, Member States with their financial and development institutions, including the European Investment Bank (EIB), and the European Bank for Reconstruction and Development (EBRD).
  • It will seek to mobilise the private sector in order to leverage investments for a transformational impact. 
  • The EU delegations around the world, working with Team Europe on the ground, will play a key role to identify and coordinate Global Gateway projects in partner countries.
  • Under the overall steer of the president of the Commission, the high representative/vice-president of the Commission, the commissioners for international partnerships and neighbourhood and enlargement will take forward the implementation of Global Gateway, and promote coordination among all actors.

Why EU’s strategic calculus behind “Global Gateway” as an alternative to China’s BRI?

  • The Global Gateway (GG) represents the intentions of EU policy actions, strategies and declarations designed to reflect, and produce, a viable alternative to the BRI.
  • There is growing apprehension in EU policy circles not only of the extent of the BRI’s roll-out but also of the economic, social, political, and diplomatic side-effects it is garnering, especially in parts of the world where the EU’s strategic interests are non-negligible and long-standing.
  • For example- the Balkans, North Africa, Sub-Saharan Africa. The effects have got to the point where they now stand as an affront to the EU’s own strategic interest, hence the drive to develop a credible alternative policy avenue to finance the construction of infrastructure in the Global South.

Belt and Road Initiative of China

  • China launched the Belt and Road initiative in 2013.
  • China’s flagship project aims to develop land and sea infrastructure to better connect China to Asia, Europe and Africa for trade and development.
  • Global endeavor: 39 countries in sub-Saharan Africa have joined the initiative, as well as 34 in Europe and Central Asia, 25 in East Asia and the Pacific, 18 in Latin America and the Caribbean, 17 in the Middle East and North Africa, and six in South Asia.
    • These 139 members of BRI, including China, account for 40 percent of global GDP.
  • Sixty-three percent of the world’s population lives within the borders of BRI countries.

Criticisms of China’s BRI initiative

 BRI project has been heavily criticized by the western world for the following reasons:

    • A part of China’s debt trap policy
    • A tool for China to influence poorer countries.
    • An attempt to develop New Colonialism or the Marshall Plan for the 21st century

India opposition to China’s BRI plan

  • India has been boycotting the BRI to protest over the $60 billion CPEC being laid through the Pakistan-occupied Kashmir (PoK). 
    • The inclusion of China-Pakistan Economic Corridor (CPEC), which passes through Pakistan-occupied Kashmir (PoK), as a flagship project of ‘OBOR/BRI’, reflects lack of appreciation of India’s concerns on the issue of sovereignty and territorial integrity. 
  • India is of the firm belief that connectivity initiatives must be based on universally recognized international norms and must follow principles of openness, transparency and financial responsibility and must be pursued in a manner that respects sovereignty, equality and territorial integrity of nations.

What are the differences between Global Gateway and BRI in terms of market access and quality standards?

  • Transparency in procurement process: The main difference will be noticeable in terms of the way contracts will be tendered, with an emphasis on transparency in the procurement process.
  • More focus towards individual’s (country) freedom: More emphasis in EU’s proposal is placed on the financial, environmental, and social sustainability of awarded contracts and projects. Keeping in mind the consideration for individual “dignity and freedom.”
  • However, like China’s leadership leaned on the country’s strong overseas presence in the world of infrastructure to devise a united strategic heading under the aegis of the BRI.
  • Through the GG, the EU is attempting once again to breathe life back into its global infrastructure footprint.

How can Global Gateway attract countries already participating in the BRI?

  • This must be the most contentious aspect of GG and a lot will ride on the EU institutions’ plans for it.
  • EU policymakers do seem to have finally come to terms with the comparative weakness of the EU’s infrastructure financing schemes in relation to the BRI.
  • That weakness is largely connected to the EU’s preference for associating financing with conditionality, whether political or bureaucratic.
  • GG forms part of an attempt by the European Commission to render the EU’s model leaner and better suited to the needs of its partners on the demand-side of the equation.
  • EU’s stand to “take a values-based approach, offering transparency and good governance to our partners” can be emphasized upon in a targeted manner.

How Global Gateway would function alongside the OECD-led “Blue Dot Network”?

  • GG is effectively the EU’s very own version of the “Blue Dot Network.” Their respective values dovetail one another: financing projects which are open and inclusive, transparent, economically viable, financially, environmentally, and socially sustainable
  • Both initiatives are compliant with international standards, laws, and regulations.
  • This is simply the result of a sustained recognition in the West of the need to devise a plan to counter the BRI, which has taken on a multiplicity of forms: policy responses of an individual, such as the EU’s “Connecting Europe and Asia” strategy etc.

Conclusion

The Global Gateway Strategy is Europe's offer to build partnerships of equals, which reflect Europe's long-term commitment to the sustainable recovery in each of our partner countries. 

Global Gateway builds on the achievements of the 2018 EU-Asia Connectivity Strategy, the recently concluded Connectivity Partnerships with Japan and India, as well as the Economic and Investment Plans for the Western Balkans, the Eastern Partnership, and the Southern Neighbourhood. 

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