IsthePartnershipforGlobalInvestmentandInfrastructurereallygoodforthedevelopingworld?

 

2022,theWhiteHousereleasedanannouncementproclaimingPresidentBiden’snewinitiative:thePartnershipforGlobalInfrastructureandInvestment(PGII).Onpaper,awonderfulinitiative,inpractice，6monthson,somethingofadisappointmentbutmoresowhenwelooktohowitcameaboutandwhatprecededit.

 

Anyonepayingattentionwillhavenoticedsimilaritieswiththe2021,G7announcementofBuildBackaBetterWorld(B3W).B3WwasannouncedasG7’scompetitionwithChinabutPGIIdoesn’tmentionChinaatall.Apartfromthatthough,bothB3WandPGIIshareotheraspects.Theyhavethesamefourgoals:assistthedevelopingworld’stransitionfromfossilfueltocleanenergy;improvedigitalconnectivity;fightgenderinequality;andprovidebetterhealthoptions.Theyalso,accordingtoWhiteHouseannouncements,bothhaveotherthingsincommon:creationofopportunitiesforAmericanworkersandbusinesses;andadvancesinUSnationalsecurity.

 

GiventhatbothwereborneoutoftheG7,bothareofsignificantbenefittotheUSAandbothsharethesamegoals,clearly,we’reobviouslywitnessingtherebrandingofanoldinitiativeratherthananythingnew.

 

Itmustbeaconstantsourceofdisappointmenttothedevelopingworldtokeephearingabouthowmuchhelpthey’regoingtogetandthenfindingthatnoneofitmaterialisesintomorejobs,higherincomes,lifestyleimprovementsoranythingofsubstance.

 

Therearegoodreasonsforthis,neitherofthetwoinitiativeshaveexplainedwherethemoneywillcomefrom,therearevagueandambiguousstatementsof“mobilizing$600billionby2027”byleveraging“likemindedpartners.”Butit’snotknownwhowillbenefitmost,whowillmanagethefundsifindeedthereareany.Consequently,18monthssincebeingannounced,it’sclearthatB3Wisnolongerfunctioningand,asanendeavour,it’sbeensupersededbyPGIIwhich,oncloseinspection,appearstobenothingmorethanapaperchase.

 

InNovember,theWhiteHousereleasedafactsheettoincludeexamplesofthe“Newprojects”PGIIhasbeenresponsibleforand,hardlyasurprise,therearen’tany!

 

ExamplesgivenbyPresidentBidenincludetheIndonesianJustEnergyTransitionPartnership.SomethingthatcameoutofCOP26inScotlandhalfayearbeforePGIIwasannouncedbuthasbeenaddedtothenumbers,presumablytomakePGIIlookgood.Ifanyonewonderswhowillbenefit,PresidentBiden’s“goodfriend”,MikeBloomberg’scompany,GlasgowFinancialAllianceforNetZeroisoneofthemainfundersandtheorganisation’sleadershipconsistsofaformerBankofEnglandDirectoraswellasaformerStockExchangeCommissionChair,it’shardlyacharity!

 

AnotherexamplegivenistheIndonesiaMillenniumChallengeCorporation,thisisanoffshootofa2004USinitiativetoaidglobalpovertyand,asdescribedontheirownwebpage,a“goodinvestmentforAmericanpeople”.ThisIndonesianaspectwaslaunchedin2018,soissomethingtheUSwerealreadydoing,notasBidenannounced,anewPGIIinitiative.

 

TheTrilateralSupportforDigitalInfrastructureinthePacificisthenextexampleprovidedandthisisinterestingasitappearstobenothingmorethananadditionoftheword“digital”toa2018initiativeannouncedjointlybyAustralia’sDepartmentofForeignAffairsandTrade(DFAT),withtheUSandJapanesegovernments.

 

Aswegothroughtheseexamples,we’restartingtoseeapattern,aclearpatternofsmokeandmirrorstoattempttoprovesomedegreeofactivity.Let’smoveawayfromIndonesiaandthePacifictotakealookatBrazil,thenextexamplegivenisoneofcriticalsupplychainsformineralsfromBrazil.HowmuchthisbenefitsBraziliansisdebatablebutitdoesensurecriticalUSsuppliesofnickelandcobaltforelectricvehicleproduction,somethingBrazilonlystartedin2022.It’salso,unsurprisingly,aninitiativethatwasannouncedin2020bytheUSEmbassyinBrazil.

 

RemainingintheAmericas,thenextexampleBidenprovidesisHonduras’solarenergydevelopment,exceptthisonewasoriginallyannouncedin2015andreportedwidelyasasuccessstoryofUSinvestmentandHonduraninitiatives.Here,theUSExport-ImportBank(EXIM)guaranteesloanstoUSlender,JPMorgan,tofinanceLatin-Americaninvestmentsandhavebeendoingsosince2015.ObviouslyHonduransnowenjoycleanpowerandthisisagreatbenefittothembutobviouslyisn’tanewinitiativewhichcameaboutbecauseofeitherB3WorPGII.

 

Thelastexampleiscalled“DigitalInvest”andwas,accordingtothePresident,launchedinJunebyUSAIDaspartofPGII.Butagain,itwasn’t.ReadinganannouncementmadebyUSAIDinApril2022,threemonthspriortothePresident’sspeech,wenoticethattheStateDepartment’sDigitalConnectivityandCyberSecurityPartnership(DCCP),commencedin2021,wastobeexpandedtoincludeUSAID’sDigitalInvestunderDCCPandafactsheetwasproducedinOctober2021provesthis.Thismistimedannouncementofa“newinitiative”,threemonthsafteritwasannouncedaspartofanevenolderinitiativeisinterestinginthat,althoughitwasprojectedtohappenundertheStateDepartmentandisnowbeprojectedtohappenunderPGII,theword“projected”isusedbecause,sofar,therehasn’tactuallybeenanyinvestment,onlythatUSAIDisleveragingtofindinvestment.

 

IfwethoughtB3Wwasabitofadampsquib,wecanlookatPGIIasevenworse.EveryexamplethePresidenthasgivenaspartofPGII,issomethingthatwasalreadybeingdone.ThereareprofitsforUSbanks,therearebenefitsforUSinterestsinmining,powergenerationandcommunicationscompaniesbutthereappearstobelittleofsubstanceforthepeopleoflow-incomecountrieswhodon’tcareaboutUSworkersorUSNationalSecurityInterests.Whattheyreallywantarejobs,schools,hospitals,transportationandcommunicationinfrastructurewhichprovidebetterincomeopportunitieslocally.