Build Back Better World : G7

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Build Back Better World : G7

Recently, ‘G-7’ countries proposed an initiative called ‘Build Back Better World- B3W’ at the 47th ‘G-7’ summit to compete with China’s Belt and Road Initiative Project (BRI).

G7 (Group of Seven)

  • Formed in the year 1975, it is an inter-governmental organization.
  • It meets annually to discuss topics of general interest such as global economic governance, international security and energy policy.
  • The G7 organization includes the countries of the UK, Canada, France, Germany, Italy, Japan and the United States. All G7 countries and India are part of the G20.
  • The ‘G7’ has no formal constitution or any fixed headquarters. The decisions taken by the leaders during its annual summit are non-binding.

About Build Back Better World:

  • It aims to address the infrastructure problem and investment deficit of developing and low-income countries, where China has invested billions of dollars through about 2,600 projects under the Belt and Road Initiative (BRI).
  • The BRI projects are regarded as a debt trap created by China for its strategic dominance in world trade, foreign policy and geopolitics.
  • The ‘Build Back Better World Initiative’ is focused on developing transportation, logistics and communications, which will reduce China’s trade costs, provide greater access to Chinese markets and ensure a stable supply of energy and other resources.
  • The United States is leading the operation of this plan.
  • The ‘Build Back Better World’ initiative will provide a transparent partnership for developing countries to meet the nearly $40 trillion demand required by 2035.
  • It allows hundreds of billions of dollars to be spent in collaboration with the private sector while complying with climate standards and labor laws.
  • However, it is yet to be announced how the scheme will actually work or how much capital it will eventually allocate.

China’s BRI Project:

  • Belt End Road Initiative (BRI) was launched in the year 2013. This includes initiatives for growth and investment that span from Asia to Europe and beyond.
  • Under this, more than 100 countries have signed agreements with China for cooperation in BRI projects like railways, ports, highways and other infrastructure.

China’s investment through ‘BRI’:

  • Since its inception, external investment has increased in this as China’s foreign direct investment outflow ratio increased from about 0.34 to 1 in 2001-10.
  • Foreign direct investment (FDI) outflow in terms of volume increased to $140 billion in 2016-19, as against an annual average of $25 billion during 2001-10.
  • China is investing in Africa to ensure a comprehensive transport network. China has also signed up for various connectivity routes with the East Asian region, mostly focusing on transport, railways, roadways and waterways, for better integration between China and ASEAN countries.

Important Projects:

  • The China-Pakistan Economic Corridor (CPEC), the Bangladesh-China-Myanmar Economic Corridor (Bangladesh-China-India-Myanmar) and the Colombo Port City project in Sri Lanka are other important Belt and Road projects.
  • China plans to complete 4,000 km of railways and 10,000 km of highways within the Central Asian region as part of the BRI.

India’s concern

  • India has expressed concern about the ‘CPEC’ as it passes through Pakistan-occupied Kashmir (PoK).
  • The massive infrastructure project links China’s Xinjiang with the Gwadar port in Pakistan’s Balochistan province.
  • India has refused to join the Chinese initiative in the past and has raised its voice against the BRI.
  • Due to Chinese competition, India also sees adverse trade effects on the competitiveness of its products, market access, resource extraction etc.

Significance of ‘Build Back Better World’:

  • The re-emergence of China as a major global power after the fall of the Soviet Union in 1991 and the end of the Cold War is one of the most important geopolitical developments of recent times.
  • China’s economy was smaller than Italy’s in 1979, but since opening up to foreign investment and introducing market reforms, China has become the world’s second largest economy. At the same time it has emerged as a global leader in innovative technologies.
  • However, China’s government’s approach to ‘lack of transparency, poor environmental and labor standards’ has failed to present a positive alternative to the West.
  • The proposal to ‘Build Back a Better World’ is certainly an important step in curbing the adverse effects of China’s mega plan.
  • Although ‘Build Back Better World’ lacks coherent ideas and proper planning but still it has not been delayed and can be improved further.
  • With this, it is yet to be seen what role India will play in ‘Build Back Better World’, as India has been a strong opponent of China’s ‘Belt and Road Initiative’ (BRI).

Source – Indian Express

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