After almost two years, the assessments of the Global Gateway look grim: few projects, little transparency, and a misguided approach.
Andreas Bohne directs the Rosa Luxemburg Foundation’s Africa Unit in Berlin.
In February 2022, Ursula von der Leyen, the President of the European Commission, presented the first Global Gateway project at the sixth EU-Africa summit: a pledge to invest 1.6 billion euro towards generating green energy in Morocco. With its focus on Africa, infrastructure plans, and energy projects, this plan also reflected the key elements of the strategy that had been announced three months prior.
But in fact, the Global Gateway is a chimera. What is being hailed as a new flagship strategy and paradigm shift for the EU is essentially a continuation of approaches and projects from recent years.
The Global Gateway is an initiative launched by the European Union that aims specifically at closing the investment gap in large-scale and global infrastructure. For this reason, it is referred to as the “EU Connectivity Strategy” in official statements. During the period 2021–2027, the EU seeks to mobilize 300 billion euro in “development funds”, half of which is earmarked for Africa. Here the focus will be on the sectors dealing with energy, transportation, digital, health, education, and research.
Given the repeated assertions of the initiative’s importance, its slow implementation might cause people to rub their eyes in astonishment. As of 2022, the initiative only had a few flashy documents and grandiloquent words to show for itself. Only in March of 2023 were 87 flagship projects published. Even as of late summer 2023 — over a year and a half after the official launch — some of the committees responsible for enacting the Global Gateway still had not started working. Some of them, like the “Business Advisory Group”, have even yet to be staffed. The first Global Gateway Forum was recently announced for this October.
In addition, the Global Gateway initiative is known for its lack of both transparency as well as targets and metrics. According to a press release from mid-December 2022, there were “40 project pipelines from European financial institutions” for the regions of Sub-Saharan Africa, Latin America, and the Asia-Pacific. It was not easy to understand the basis for the decision, the initiation, and selection for the 87 flagship projects mentioned was not easy to comprehend — which brings us to one of the main criticisms of the initiative: its lack of transparency.
A Global Counter-Project
With this strategy, the EU is pursuing a geopolitical, geoeconomic, and geostrategic approach, as can be seen in the aforementioned press release from December 2022, which explicitly mentions “advancing European interests”. From the EU’s perspective, the Global Gateway is an enterprise that must be coordinated with the interests of partner countries. However, the announced strategic investments in areas such as digitalization, climate and energy, transportation, health, education, and research suggest that the EU is prioritizing its own interests and rules. The other countries — mostly from Africa — are then allowed to respond with their own offers. This means the frequent claims announcing a shift away from a “donor-driven approach” to a “partnership-based relationship” are hardly realized.
The Global Gateway is presented as a counter-project to the Chinese “Belt and Road Initiative” (BRI), the so-called “new Silk Road”, which is the Chinese government’s main strategy for undertaking big investment projects in African infrastructure. The EU’s main selling point is that its financing is superior because it minimizes the risk of burdening the African countries with excessive debt. This rhetoric is different from that used by Chinese investors, prompting accusations of lacking transparency, which even led to putting many Africa countries in debt. However, to date it is far from clear what the credit conditions of individual projects in the Global Gateway look like, since they have not been publicly disclosed.
Nearly two years after being announced, the Global Gateway is far from meeting its goal of kicking off a transformation in development or structural policy.
But reducing the Global Gateway to its role as an alternative to the BRI is insufficient. That is because the Global Gateway is also a response to the “Build Back Better” (BBB) initiative launched by the United States, as well as the development and geopolitical investments by Japan and India, albeit to a lesser extent. However, the rivalry with the BBB initiative is understated, since in reality, the EU believes itself to be in a “values-based competition” with the US.
What the three global strategies have in common is the focus or more precisely, the narrow emphasis on infrastructure projects and transportation corridors. For example, the “Lobito (Atlantic) Corridor” was recently initiated in July 2023. This railroad line runs nearly 1,300 kilometres from the Angolan port Lobito to the border with the Democratic Republic of Congo and 400 kilometres further to the copper and cobalt mines near Kolwezi — all financed under the BBB.
Aiming for a European Green New Deal
Of the 87 flagship projects proposed in March 2023, 43 are located in Africa. As shown by the list on the project’s official website, the flagship projects are clearly prioritized in the sectors of “climate and energy” (19) as well as “physical infrastructure” (15 transport, six digital). The initiation and implementation of local plans are currently in place for both sectors, without neglecting projects which are visibly orientated towards European interests — for example, the expansion and modernization of the port in Banjul, Gambia. These projects show the direction things are intended to go: the goal is the transport of raw materials through strategic corridors and a “ports race” (i.e., taking ownership structures or financial shares on the ports) that is already underway in many African countries.
In a study published in September 2022, researchers identified “eleven strategically essential corridors in Africa” in the EU, explicitly called “corridors for mineral resources”. The number of mines and raw minerals (like bauxite, gold, platinum, etc. sorted according to production stage and kind) located therein are listed. The EU took action on this basis: in March 2023, it promised 50 million euro for the mining sector and infrastructure projects in the Democratic Republic of Congo as part of the Global Gateway. Even if details for the investments have yet to be made available, as a study recently emphasized, the EU’s strategic interests can already be identified.
The focus on infrastructure means the Global Gateway no longer appeals to the goal of industrializing Africa, which has been repeatedly asserted in European newspapers. Instead, the African infrastructure is enlisted in the service of the European Green New Deal. This is especially clear with regards to energy production.
In addition to the Moroccan project mentioned above, in 2022 the EU signed a strategic partnership with Namibia on sustainable raw materials and renewable hydrogen, which it described as “one of the key initiative of the Global Gateway Strategy.” Alongside the EU and the Dutch government, Germany is one of the major proponents of the project. A phase of accelerated planning and implementation has been underway, especially since the German consortium Hyphen was awarded the contract.
In essence, the Global Gateway is continuing down a well-trodden path: the financialization of developmental policy.
With an investment volume of 9.4 billion US dollars, the project includes spaces for production, processing, and shipping in the environmentally sensitive area of the Tsau ‖Khaeb National Park. Civil society organizations point to environmental and economic risks, and question the lofty promises of new jobs. Official statements usually fail to mention the fact that most of this renewable energy will be exported to Europe and thus will hardly contribute to a climate-neutral power supply in the countries producing it.
Although the announced investments in the pharmaceutical sector are necessary, they remain inadequate. The only measure listed as having been implemented from the “Investment Package Health” thus far is the distribution of COVID-19 vaccines through the COVAX initiative. There has already been harsh criticism of COVAX, for instance by medico international. Other measures propose the development of vaccines, medicines, and health technologies in Africa, with selective projects being implemented in Rwanda, Senegal, Ghana, and South Africa.
However, the EU seems not to have learned many important lessons considering the estimated sum of one billion euro (and the rhetoric of a globally equitable health care). Even if the EU supports the WHO mRNA hub, an institution in South Africa developing vaccines, the issue of intellectual property rights remains unsolved. For example, the American biotechnology company Moderna has agreed not to enforce its patents related to COVID-19 vaccines — as long as this technology is not used for developing different vaccines. Meanwhile, the EU has forbid any similar move.
It is hard not to get the impression that all the larger projects with (partial) EU financing get lumped in under the Global Gateway initiative, even if they were planned before 2021. For instance, the Just Energy Transition Partnership (JETP) is listed in the project portfolio despite the fact that it had already been concluded between South Africa, France, Germany, the United Kingdom, and the US in November 2021.
This partnership aims to reduce emissions in the South American energy sector and accelerate the phasing-out of coal. The portfolio also includes German-supported projects in Tunisia (such as laying an underwater cable between Italy and Tunisia) or larger projects on “data-driven governance in Africa”. Both investments can also be found among the Global Gateway flagship projects. Some people might rub their eyes and ask: is there anything new?
Financing and Financialization
Although the EU repeatedly mentions the planned investment sum of 300 billion euro, the focus seems to be on presenting the new “Team Europe” approach, which coordinates donors, to the outside world. “Team Europe” includes the EU, EU member states (including their development banks), and the EU financial institutions. The approach became even more visible when it was expanded: since 1 January 2022, the European Investment Bank (EIB) has its own business area for its international activities — the “EIB Global”.
The planned 300 billion is composed of investments by the EU (135 billion), investments from financial institutions and development banks (145 billion), and so-called leveraging of private capital. The latter sum can be raised through budget guarantees from the EU budget on behalf of the EU Commission and EU member states.
According to a statement by the German government, German companies theoretically have access to the entire portfolio of financial support earmarked for German foreign trade, such as export loans and investment guarantees, as well as guarantees for unrestricted financial loans. Even the mobilization of capital through the German Investment and Development Company (DEG) is currently being investigated.
Beyond the critique that the European Green New Deal reproduces structural dependencies, there should be a focus on the initiative’s lack of transparency and the existing risk of plunging partner countries into debt.
The emphasis placed on sustainability, standard , and a low risk of debt are features which are particularly distinct from the BRI. The “Global Gateway” with its focus on financial aid and loans, for example those from Germany within the framework of the JETP with South Africa or other mega-projects such as for hydrogen production in Namibia, is by no means financially risk-free for the “recipient countries”. There is currently little or no information available regarding the conditions under which financial aid is granted and how financing is structured.
In essence, the Global Gateway is continuing down a well-trodden path: the financialization of developmental policy. For example, the 15-billion-euro budget for the “Africa-EU Green Energy Initiative”, is offset by only 3.4 billion in EU financial aid. Part of this money is to be secured by investment guarantees and a mix of financing from private investors. In a bid to remain attractive for financial capital, the EU supports the “Global Green Bond Initiative”, which seeks to generate more investors for sustainable investments in the markets of partner countries.
Furthermore, this money does not necessarily imply that additional funds are being granted. For instance, the 600-million-euro increase in EU funds announced in September 2022 to alleviate the food crisis in the most vulnerable countries is only a reallocation from the tenth and eleventh European Development Funds.
An Unsurprising Failure
Nearly two years after being announced, the Global Gateway is far from meeting its goal of kicking off a transformation in development or structural policy. There are already signs that the ambitious goals will not be achieved.
With its initiative, the EU’s primary concern is opening up new markets for European capital. The structure of the Global Gateway will continue to reproduce the asymmetrical relationship between Europe and Africa. There is a lack of coherent strategies for fighting poverty through sustainable economic development. The EU is still committed to the idea that investments in transportation and infrastructure projects would also create trade and value chains or production networks (and jobs in the process).
However, these anticipated spill-over effects simply do not exist. In other words: just as in the preceding decades, the EU is counteracting its own policy by declaring the creation of the “Economic Partnership Agreement” between the EU and Kenya a success, while simultaneously emphasizing wholeheartedly that this agreement is also available to other countries in the East African community — although this is harshly criticized by civil society in Kenya.
Even in its rhetoric, the EU is taking well-trodden paths. It seems like no official statement can be issued without the expressions “new relationships”, “partnership of equals” or “win-win”. Such empty slogans hide the one-sidedness of the Global Gateway initiative.
The Global Gateway follows in the wake of existing initiatives like the Compact with Africa, which was enacted during the German G7 presidency in 2017 — and the effects of which are also unclear. Although European efforts at the beginning of the twenty-first century were focused almost exclusively on liberalizing trade — the buzzword was economic partnership agreements — which were met with resistance from governments, civil society groups, and trade unions in Africa, there are no indications which suggest that the current EU initiatives contain free trade agreements. Such agreements are reached bilaterally, as the example of Kenya mentioned above demonstrates. It seems that the EU wants to prevent resistance to the Global Gateway initiative from emerging.
It is undoubtedly necessary to finance relevant infrastructure projects — like railroads, digitalization initiatives, and, above all, renewable energy. However, unless they are accompanied by other measures such as debt relief initiatives or a CO2 tax for fossil fuel trade, these attempts remain trapped in the logic of neoliberal policies.
Since no mass movement against these policies is currently in the cards, the best starting point appears to be pointing out the weaknesses of the Global Gateway. Beyond the critique that the European Green New Deal reproduces structural dependencies, there should be a focus on the initiative’s lack of transparency and the existing risk of plunging partner countries into debt.
To do this, the Left would first have to overcome its general aversion to getting involved with green bonds, financial aid, and blended finance — in other words, public development financing for activating private capital flows — and contribute to the discussion with concrete, feasible alternative models. Only then would there be a chance of correcting the mistakes of the Global Gateway.
Translated by Bradley Schmidt and Hunter Bolin for Gegensatz Translation Collective.