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Biden said the G-7 would counter Chinese influence. This year, he'll try again

Last year, President Biden announced "Build Back Better World," meant to compete with China's Belt and Road Initiative. This year at the G-7, Biden will unveil the first projects.
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Last year, President Biden announced "Build Back Better World," meant to compete with China's Belt and Road Initiative. This year at the G-7, Biden will unveil the first projects.

When President Biden met with Group of Seven (G-7 ) leaders a year ago — his first foreign trip in office — he pushed them to put their weight behind a plan meant to be an alternative to Chinese financing for infrastructure projects around the world.

It was to be called "Build Back Better World" — a play on Biden's branding for overhauling the domestic economy. "What's happening is that China has its Belt and Road Initiative. And we think that there's a much more equitable way to provide for the needs of countries around the world," he said after the effort was launched.

China had been building roads and bridges and other big projects in Asia and Latin America and Africa for more than a decade, gaining a foothold in countries desperate for financing — and extracting economic and political concessions along the way. So, Biden's pitch was to offer a more appealing choice.

"It's a values-driven, high-standard, transparent financing mechanism. We're going to provide and support projects in four key areas: climate, health, digital technology and gender equity," Biden said.

Since then, his advisers have worked on the initiative, mostly without fanfare. There has been little tangible progress to herald. But at this year's G-7 summit, which begins Sunday in Germany, Biden plans to relaunch the effort — under a new name — and put forth some initial projects to show how the plan will work.

"He will be launching a partnership for global infrastructure, physical health and digital infrastructure that we think can provide an alternative to what the Chinese are offering — to the tune of tens and ultimately hundreds of billions of dollars when you add in what our G-7 partners are going to do as well," said Jake Sullivan, Biden's national security adviser, at a conference in Washington last week.

"We intend for this to be one of the hallmarks of the Biden administration foreign policy over the remainder of his tenure," Sullivan said.

This isn't the first time the U.S. government has pledged to counter China's Belt and Road Initiative. Previous administrations have talked about wanting to harness private financing to support projects in the developing world.

"Looking back at what we've seen, every iteration of an American-led response to the Chinese infrastructure project has underperformed," said Gyude Moore, a former minister of public works in Liberia.

"I really, really want to be hopeful, I do," said Moore, now with the Center for Global Development. "It's just — looking at everything as it exists, it's difficult to imagine what rabbit they are going to pull out of this hat."

Russia's invasion of Ukraine dominated Biden's foreign policy

When the G-7 first launched Build Back Better World — or B3W for short — the world economy was in a very different place.

"There was a feeling that they'd be ... coming out of COVID globally, in a really strong position to have a couple of years of very positive growth and building back," said Zack Cooper, a senior fellow at the American Enterprise Institute who specializes in U.S. strategy in Asia.

Instead, COVID remained a challenge. Russia invaded Ukraine, setting off energy and food crises. The Biden administration focused on rallying allies to sanction Russia and support Ukraine. Then, inflation became a serious problem globally.

"Now people are talking about getting back into a recession. I just think that's a very different environment to have this conversation," Cooper said.

Autorickshaws are lined up to get fuel in Colombo, Sri Lanka, on Monday. COVID and energy price spikes have exacerbated deep-seated economic problems in the country.
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AFP via Getty Images
Autorickshaws are lined up to get fuel in Colombo, Sri Lanka, on Monday. COVID and energy price spikes have exacerbated deep-seated economic problems in the country.

With a lack of progress, countries became disillusioned

Developing economies have been hit particularly hard by COVID and rising energy and food costs. While U.S. officials have talked about B3W around the world, countries in Latin America, Asia and Africa haven't seen much action.

"Countries are in dire straits. They need resources. There are opportunities the Chinese are offering and the U.S. can't match those," said Michael Shifter, former president of the InterAmerican Dialogue, who is in regular touch with leaders in Latin America.

"After a while, people just become very skeptical and say, 'This is not happening,' " Shifter said, explaining that leaders recognize that the war in Ukraine has occupied U.S. attention and funding. "The expectations, I think, have really declined, and I'm not sure anybody's really expecting very much at this point, unfortunately."

While the intentions of the program have been applauded, there are a lot of questions from low- and middle-income countries about whether there's real money behind it, said Ian Bremmer, president of Eurasia Group, an international consulting firm.

"Whenever they talk to American officials, they say, 'Well, if you don't want us investing in China, give us an alternative. Right? If you don't want us tying up with Beijing, and all this money they're offering, well, where else are we supposed to go? You don't have anything else.' So this is meant to be that," Bremmer said.

"And there's only one problem, which is that we don't actually have the money to fund it," he said.

President Biden's national security adviser, Jake Sullivan (second from the right), walks on the South Lawn of the White House in this May 1 photo. Sullivan says U.S. government funding in the rebranded partnership may be relatively modest.
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AFP via Getty Images
President Biden's national security adviser, Jake Sullivan (second from the right), walks on the South Lawn of the White House in this May 1 photo. Sullivan says U.S. government funding in the rebranded partnership may be relatively modest.

New year, new brand for the initiative

The White House has pushed back against skepticism about the project. A senior administration official told reporters that "it's been a year ... of going out and doing the hard work of bringing this statement of intent into being" with partners around the world and the private sector, and that the "formal launch" at this year's G-7 would make the goals of the program clear.

People briefed on the relaunch say the program will now be called "Partnership for Global Infrastructure" — eschewing the "Build Back Better" brand, which foundered domestically when lawmakers, including Democratic Sen. Joe Manchin of West Virginia, balked at the cost.

There are also questions about how much money Congress will be willing to devote to the rebranded partnership.

But Sullivan, Biden's national security adviser, said the government funding may be relatively modest.

"What we're really trying to stimulate is a long-term economic relationship rooted in private sector investment — not in massive cash transfers from the American Treasury to these countries," Sullivan said at a conference held by the Center for a New American Security.

"That means taking relatively smaller amounts of money and leveraging significant private sector investment to add up to billions and ultimately tens of billions of dollars," Sullivan said.

Cambodia's Prime Minister Hun Sen cuts a ceremonial ribbon for a stadium in Phnom Penh paid for by China's Belt and Road Initiative in this December 2021 photo.
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AFP via Getty Images
Cambodia's Prime Minister Hun Sen cuts a ceremonial ribbon for a stadium in Phnom Penh paid for by China's Belt and Road Initiative in this December 2021 photo.

It's still unclear whether private funds will invest in these projects

In theory, the partnership's concept could work, says Matthew Goodman, who advised President Barack Obama on national security and economics. For projects with a U.S. government seal of approval, the idea is private sector money would flow in from pension funds, hedge funds, private equity and insurance funds.

"We've got $100 trillion plus — $100 trillion — far out-dwarfing what China may have to offer through Belt and Road," said Goodman, now at the Center for Strategic and International Studies, a think-tank.

But these funds have to be convinced they can make a return on their investment. And there's risk in investing in projects in countries where markets can be opaque and the rule of law is unsteady by Western standards, Goodman said.

"The question is: Is this really going to tip the balance and incentivize the massive funds in the U.S. to go into these investments? And I think that's an open question, still," Goodman said.

Moore, the former public works minister of Liberia, said developing countries will be happy for any additional project investment, given the state of the global economy. But he was less optimistic that the private sector will come to the rescue based on past experience.

"The private sector is organized on a profit motive," Moore said. "If there were opportunities they would go after it themselves."

Copyright 2022 NPR. To see more, visit https://www.npr.org.

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Tamara Keith
Tamara Keith has been a White House correspondent for NPR since 2014 and co-hosts the NPR Politics Podcast, the top political news podcast in America. Keith has chronicled the Trump administration from day one, putting this unorthodox presidency in context for NPR listeners, from early morning tweets to executive orders and investigations. She covered the final two years of the Obama presidency, and during the 2016 presidential campaign she was assigned to cover Hillary Clinton. In 2018, Keith was elected to serve on the board of the White House Correspondents' Association.