A New Silk Road or a Long and Winding Road to Strategic Autonomy? The EU’s Global Gateway Programme

On 21- 22 June 2022, global leaders and policymakers met in Brussels to discussed progress in the so-called Global Gateway programme and how best to meet the challenges facing global development and infrastructure. During the European Development Days event in Brussels participants took stock how Global Gateway strategy could bridge the infrastructure funding gap to meet the environmental, climatic, digital and connectivity needs around the world which could cost up to US$3.7trn per year up until 2035.

Infrastructure investments overseas are not purely economic or altruistic humanitarian calculations but also impact geopolitical influence and edge out room for competitors like the US’ Build Back Better World (B3W) or China’s Belt and Road Initiative (BRI) to provide the same products, whether they be health care, telecommunications equipment or building motorways.

In this regard, the EU’s Global Gateway attempts to thread a needle between promoting the EU’s “democratic values” as well asserting the Union’s geopolitical interests around the world. The challenge to meet these demands and to determine the physical, economic, and political infrastructure which will shape international relations and global economic flows is becoming a major terrain for geopolitical competition between the EU, United States and China. This blog explores the three main infrastructure investment programmes and the implications for the EU’s strategic autonomy ambitions.  

The Global Gateway, the Belt and Road, and the Build Back Better World

The Global Gateway is the EU’s flagship infrastructure and connectivity investment programme, which aims to provide €300bn worth of “sustainable investments and trusted” partnerships based on mutually shared values across sectors including digital, energy, transport, health, education, and research systems around the world between 2021-2027.[1] [2] These in turn are predicated on: democratic values, good governance and transparency, equal partnerships, ecologically sound foundations, providing sufficient security, and catalysing private sector investment, as well as the UN’s Sustainable Development Goals (SDGs), and the Paris Climate Agreement. 

Its goals are threefold:

1. to secure markets for EU goods and services; offering a viable alternative to competing models of development like the Chinese Belt and Road Initiative (BRI),
2. to support the de facto establishment and expansion of EU technical and commercial standards as global standards,
3. to enhance European strategic autonomy ambitions. 

The Global Gateway’s €300bn funding between 2021-2017 comes principally from three main sources. €145bn through EU Member States’ financial and development institutions. €135bn from the European Fund for Sustainable Development Plus (EFSD+), managed by the European Commission, to achieve the UN 2030 Sustainable Development Goals (SDGs) and meet political, economic and security commitments to EU neighbourhood countries. €18bn from existing EU programmes including the Pre-Accession Assistance (IPA) III, Interreg, InvestEU and Horizon Europe programmes, as well as a potential future European Export Control Facility.

The Global Gateway seeks to enhance the EU’s global influence and strategic autonomy by exporting European industrial, commercial, and legal standards and by forging closer political and economically advantageous connections in Africa, Asia, and Latin America.

It also seeks to harness the EU’s considerable economic power to enhance the Union’s geopolitical influence by offering a credible climate neutral and democratically based alternative to China’s BRI and to compete with the American B3W[3] strategies.[4] Global Gateway aims to position the EU as a trusted global partner based on mutually beneficial links rather than perceived debt-trap dependencies8 and to increase its capacity as a global player.  

It is worth noting that much of the Global Gateway funding is not entirely new, but rather repurposed from existing sources like national development or extant Commission programmes, and that the amounts proposed are dwarfed by funding proposed for US or Chinese programmes. The Global Gateway attempts to match this through a “Team Europe”[5] approach where EU institutional and Member State efforts are combined under the European Commission, to better reflect the EU’s status, when counted as a whole, as the world’s single largest aid donor.[6]

While the programme title suggests global ambitions, the majority of the Global Gateway’s efforts over its 2021-2027 term are likely to be concentrated in the regions of greatest importance to the EU, namely the Western Balkans, countries in the Eastern Partnership Programme, the Middle East and North Africa, and Sub-Saharan Africa.

It is interesting to compare the Global Gateway with similar initiatives in the US and China. The Build Back Better World (B3W) is an American initiative, proposed at a June 2021 G7 Summit, to provide an alternative to China’s BRI for the development of infrastructure of low- and middle-income countries, with US$40bn across Latin America, Asia, and Africa by 2035.[7] While the scope of the Global Gateway and funding are focused on “soft” infrastructure targets such as education, healthcare, gender equality and digital technology, the BRI’s primary focus on “hard” projects such as ports, motorways, railways, and electricity generation plants, and the US B3W straddles both.

Furthermore, a distinct difference between B3W, the Global Gateway and BRI, is that B3W places a much greater emphasis on attracting significant amounts of private investment capital,[8] in place of more reliance on public or semi-state funding.  The project was effectively rebranded and relaunched as the Partnership for Global Infrastructure and Investment (PGII, or colloquially referred to as the “PGII Bank”) in June 2022. This development followed the perceived relegation of B3W as a global priority following the COVID-19 pandemic and the war in Ukraine. The PGII aims to raise US$600bn by 2027 between public and private financing among the G7 countries[9]  (which includes the EU’s Global Gateway, as well as Japan and Canada). The PGII will focus on delivering climate and energy security, digital connectivity, health and health security, and gender equality and equity.[10]

The Belt and Road Initiative (BRI), also known as the “New Silk Road”, is China’s ambitious global infrastructure development and supply-chain connectivity project launched in 2013 with a land-based “belt” and a maritime “road” and an investment target of over US$1.2-1.3trn by 2027.[11] However, the BRI is more than just building bridges, ports, or roads, it is also about developing markets for Chinese exports, enhancing Chinese economic and political influence abroad, accommodating domestic industrial overproduction. It is also driven by a low internal demand for infrastructure projects[12] and the ambition to qualitatively upgrade Chinese exports.[13]

The initial decade of the BRI was focused on “hard” infrastructure (transport links, energy generation, telecommunications, ports, and airports), but this has since expanded to include ICT services, police training services, educational investments, tourism facilities, as well as global standard setting agendas.[14] The BRI is built around five constituent elements; policy coordination, interconnected (cross border) infrastructure, trade facilitation, financial integration (with China) and interpersonal linkages.[15] While there are several financing vehicles established to support the funding of BRI projects, the majority of the investment and capital comes from either state-led development and state-owned enterprises at national and regional levels or public-private partnerships with significant state involvement.[16]

It is worth observing that the BRI is not universally viewed as a negative, and as of 2019 all regions of the world, except Southeast Asia, held generally positive views of the BRI.[17] The clear economic benefits and increases in foreign direct investment and trade flows due to the BRI, considerable infrastructural construction experience since 2013, and the Chinese state’s financial resources all reinforce the BRI’s attractiveness. However, concerns over the use of Chinese labour, ecological impacts, and potentially punishing loan conditions remain.

The relatively high use of loans rather than grants compared to the EU or US, have arguably contributed to worsening political, economic, and social stability for their recipients,[18] although the evidence for this deliberate “debt-diplomacy” is disputed.[19] While it is a global initiative, the BRI places its primary emphasis on China’s immediate region and broader continental hinterland,[20] focusing on linking up emerging markets across Asia, Eastern Africa, Eastern Europe, and the Middle East with China,[21] although the future of the BRI is undetermined.[22]

Competition or Complementarity?

A critical question is whether the various infrastructure development programmes like the Global Gateway, BRI and B3W/PGII are complementary or competitive. The answer is most likely both, simultaneously. There is an enormous global demand in low- and middle-income countries for upgraded or new public infrastructure and where greater investment, regardless of its source, is likely to be appreciated. Developments which foster investment, trade, business growth and improvements in quality of life as well as improved relations with global powers are to be welcomed as future global demand for infrastructure is likely to outstrip the resources that the EU, US, and China could collectively bring to bear, with possibly US$6trn needed per year.[23]

If successful, the Global Gateway may have significant implications for both the EU and its partners around the world. It could enhance the strategic autonomy of the EU by forging closer economic and political ties with partners and enabling the Union to effectively compete with China and the US for global infrastructure provision. It could also export EU industrial and competition policies through securing market access and standard-setting measures for the goods and services needed to deliver infrastructure projects, which may also help to spur on economic growth within the EU itself and increase its global regulatory influence. A focus on stabilising the political, economic and security of the countries immediately bordering the EU may buttress the EU’s geopolitical positions in terms of addressing the root causes of migration to the EU and lessening the political and economic challenges.  

A more consolidated approach under the Global Gateway may contribute towards further centralisation of EU resources under the collective aegis of the European Commission and reinforce the EU’s strategic autonomy on the global stage. However, the effective coordination of 27 distinct national financial aid institutions and priorities may prove limiting, particularly the given the profile, and international legacy brands of national aid programmes, such as Irish Aid.  They may also face opposition from partner countries if they are perceived to be neo-colonialist and end up entrapping their recipients in long-term debt traps or else ceding strategically important infrastructure like ports or railways. 

Whether this proposed programme is the gateway towards a more engaged and ambitious Europe on the world stage or is merely a long and winding road remains to be seen. If the BRI, the B3W/PGII and the Global Gateway form rival teams, they may squander opportunities and resources on needless competition, at a time when complementarity is sorely needed as global geopolitical tensions are spilling over into the realm of infrastructure investment rather than constructively shaping the future of international trade and economic flows.[24]