Comment | Globalization - Europe - Africa - The New Silk Roads The Global Gateway Isn’t All It’s Cracked Up to Be

Andreas Bohne on the European answer to China’s “New Silk Road”

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Andreas Bohne,

[Translate to en:] EU-Kommissionspräsidentin Ursula von der Leyen gibt am 1. Dezember 2021 in Brüssel eine Pressekonferenz zum Global Gateway.
President of the European Commission Ursula von der Leyen delivering a speech on the Global Gateway in Brussels, 1 December 2021. Photo: IMAGO / ZUMA Wire / Valeria Mongelli

The EU’s Global Gateway initiative was announced in December 2021, but so far has remained largely unknown. The initiative is to be officially launched at the sixth EU–Africa Summit on 17 and 18 February 2022. According to the official announcement, “Team Europe” — consisting of the EU, the member states, and the European Investment Bank — plans to raise up to 300 billion euro in the coming years. During her recent visit to Senegal, Ursula von der Leyen announced that roughly half of that sum will be invested in the “Africa–Europe Programme”. Investments are to be made in areas such as climate and energy, digitalization, health, agriculture, and agribusiness.

Andreas Bohne directs the Rosa Luxemburg Foundation’s Africa Unit in Berlin.

The declarations on what is innocently termed “ownership” are contradictory: von der Leyen is quoted as saying that “the project will be supported by Europe, but implemented in partnership” and is intended to make the EU “more resilient”. A recent factsheet states laconically: “The EU works with Africa.” On the EU Commission’s website, emphasis is placed on the idea that the initiative will be “taking into account the needs of partner countries and ensuring lasting benefits for local communities”.

But for whom exactly is this initiative — which is described as a “win-win activity” despite its European dominance and financial asymmetry — supposed to work, and who will profit from it?

Geopolitical and Economic Interests

Global Gateway is widely viewed as the European counterpart to China’s New Silk Road, also known as the Belt and Road Initiative (BRI). Therefore, the focus is predominantly on investments in infrastructure such as transport corridors, digital connectivity, and renewable energy production — hydrogen in particular.

Beyond that, the obligatory buzzwords “digital transformation” and “green transition” are thrown about liberally. The fact that renewable energy is to be exported predominantly to Europe and thus will contribute less to climate-neutral electricity supply in the producing countries is largely overlooked. The risks that may arise in African countries due to rising electricity prices or competition for land also go unmentioned.

Planned investments in the pharmaceutical sector are necessary, but their goals — such as a broad vaccination campaign — could have been achieved more quickly through a TRIPS waiver, i.e. a patent release. At the same time, what is true for the many other announced but vague Global Gateway priorities also shines through here: the EU largely promotes the creation of investment-friendly macroeconomic framework conditions. But this is not enough: because the financial markets in the Global South are often regarded as too risky, so-called “sustainable financing” is to be strengthened at the same time. One declared goal is to improve the “green bond markets” in partner countries in order to make them more attractive for investors.

Although Global Gateway is supposed to have a global impact (as the name suggests), North Africa will be the primary geographical target area. The first project to be announced was thus a 1.6-billion-euro investment in green energy generation in Morocco. The EU is thus focusing on what is in its view currently the most important geostrategic region, especially when it comes to warding off unwanted migration flows.

Another Building Block for the Financialization of Development Policy

In addition to public funds, Global Gateway aims to “mobilize” the private sector. This constitutes a further step towards the financialization of development policy. This trend, which began a few years ago, refers to the role of private capital in realizing development policy or sustainable goals. Both development ministries and multilateral institutions are expected to use their public funds in order to attract the capital of private companies.

But to mobilize private actors, they need at least three incentives: first, of course, profits; second, an investment-friendly, preferably deregulated market; and third, risk minimization. At present, investments in transport infrastructure, renewable energy projects, and health seem to be the most profitable. A European Export Credit Facility is already being considered to minimize investment risk. That all sounds great for the EU and for European investments — but not for Africa.