47TH G7 SUMMIT

• The G7 (Group of Seven) Countries proposed a ‘Build Back Better World (B3W) initiative’ at the recent 47th G7 summit to counter China’s Belt and Road Initiative (BRI).
• It is an intergovernmental organisation that was formed in 1975.
• The bloc meets annually to discuss issues of common interest like global economic governance, international security and energy policy.
• The G7 countries are the UK, Canada, France, Germany, Italy, Japan and the US.
• All the G7 countries and India are a part of G20.
• The G7 does not have a formal constitution or a fixed headquarters. The decisions taken by leaders during annual summits are non-binding.

Important points:

• It aims to address the infrastructure investment deficit in developing and lower income countries – the space which has been increasingly captured by China through 2,600 BRI projects with trillions of dollars of investment.
• BRI projects are perceived as corrosive tactics or debt traps laid by China for its strategic dominance in trade, foreign policy and geopolitics in the world.
• The overall focus is on developing transportation, logistics and communications, which would reduce trade and transaction cost for China’s trade, give more market access to Chinese markets and ensure stable supply of energy and other resources.
• This infrastructure plan is being led by the United States.
• B3W initiative will provide a transparent infrastructure partnership to help narrow about $40 trillion needed by developing nations by 2035.

It calls for spending hundreds of billions of dollars in collaboration with the private sector while adhering to climate standards and labour practices.

• However, the announcement is yet to be made about how exactly the plan would work or how much capital it would ultimately allocate.

Way Forward

• The counter proposal of B3W is certainly a welcome step to contain the adverse implications of a Chinese mega plan. However, B3W lacks coherent thoughts and proper planning at this stage. Nevertheless, it is better late than never.
• Moreover, it remains to be seen what role India will play in B3W since it has been a strong opponent of China’s BRI.

SOURCE: THE HINDU,THE ECONOMIC TIMES.MINT