fbpx

Voice of the Commonwealth - The Global Influencer

Voice of the Commonwealth - The Global Influencer

The EU’s Global Gateway: A Belt & Road Alternative?

By Chris Devonshire-Ellis

The EU has launched its ‘alternative’ to China’s Belt and Road for the EU, with EU Commision President Ursula von der Leyen stating “We want to create links and not dependencies” while clarifying this by stating “It does not make sense for Europe to build roads between a Chinese owned copper mine and a Chinese owned harbour”

The Global Gateway is to be positioned as “a trusted brand around the world” and is intended to “build Global Gateway partnerships around the world. We want investments in quality infrastructure, connecting goods, people and services around the world.”

But what does this actually mean?

Firstly, let’s look at the detail. There isn’t a lot. There is no mention of any dedicated office or staff, and no mention of any budget, meaning at present the EU “Global Gateway” is pure rhetoric and nothing else. Von der Leyen was asked three months ago to come up with a name and logo, of which just a name now exists. (She can purchase the rights to the image shown above for a suitable fee if she wants. It took our design team 20 minutes) Mention was made of creating ‘connectivity projects with Africa’ but again, the concept is light to invisible on any specifics.

Also noted with both a lack of any budget and the comment “we want investments” suggesting the EU has little to no intention of funding the Global Gateway. That means the EU will need to find access to capital and organize the various EU export credit and development agencies to do so. Explaining to the democratically elected Finance Minister of Poland why he should spend Polish money on a road between say Addis Ababa and the Red Sea might take a bit of doing when Warsaw needs metro extensions. And so on.

Such projects will also prove difficult to sell to EU financial institutions, who will not be willing to lend money at rates competitive to China’s normal Exim Bank standard lending of 2%. So, who will provide the capital?

Von der Leyen will soon find the ‘No money, no honey’ maxim applies when it comes to raising finance for projects that are ‘global’ – in other words, with a non-EU component. That could be resolved with partners such as the US, meeting connectivity costs halfway, but it is highly unlikely to happen with regions such as Africa. Maybe Russia could step in – it has a 2,250km border with the EU that could use some investment and revitalization.

Also odd is the statement about not building roads between Chinese owned mines and harbours. Why not? Contracts are agreed – often with significant Government oversight – over commodities and clear division of the mined or piped assets. As for harbours, China already owns, or part owns many EU ports. The list includes Antwerp, Bilbao, Bruges, Dunkirk, Genoa, Le Havre, Marsaxloxx, Marseille, Nantes, Piraeus, Rotterdam, and Valencia. The EU will be spending on connectivity infrastructure with and between these and other facilities regardless of whether von der Leyen likes it or not.

Ownership of facilities is not the issue – the Chinese operators of these ports have invested to upgrade them and will expect to make – or lose money – in accordance with how efficient, effective, and ultimately profitable they are. China will then pay the requisite profits and other taxes as required to each specific EU nation and in accordance with EU laws. Von der Leyen would be far better off trying to close off the US company Amazon’s attempts to minimize EU taxes than suggest it doesn’t make sense to build roads to Chinese owned harbours. The concept makes no sense.

So, what is left for the “Global Gateway”? It has no resources, no budget, no staff or offices and no projects. If as Chairman of my board, I tried to tell my colleagues that was an impressive development strategy they would laugh me out of the room. The EU needs to put meat on the bones if it is going to come up with anything to compete with China’s infrastructure build. Just as ‘Build Back Better’ has failed to come up with anything concrete – so has the EU.

Brussels appears to be competing with Washington for who has the most useless BRI alternative plan.

But there are reasons for this. Last week, von der Leyen also suggested the EU build up its military resources to develop an EU Army, saying that in military terms “It is time for Europe to step up to the next level.”

The EU already spends about 1.5 percent of its GDP – equal to €223.4 billion – per annum under its Common Security and Defense Policy (CSDP), with significant increases certain should an EU Army be developed. That may be one reason there is no apparent budget for the “Global Gateway” – with Brussels pondering spending its cash on military equipment and soldiers. Africa might have to wait awhile longer for the “Global Gateway” to finance any interconnecting EU infrastructure.

But all is not yet lost for the Africans. China is continuing to pour Belt and Road Initiative capital in, while Russia is also funding infrastructure. The next power to do so may not be the EU, but stirrings of the UK’s significant clout through the 19 African members of its Commonwealth – which are already beginning to see improved engagement, trade development and investment. For the EU though, Brussels strategy of the “Global Gateway” is a mirage, and nothing much more than political hot air of little substance.

Latest news

Mauritius emphasizes strategic significance of GCC nations

Port Louis, Mauritius (CU)_ The Mauritius Tourism Promotion Authority (MTPA) has announced its long-term goals and commitment to establish deeper economic relationships with GCC...

Related news

Investigation reveals only three universities from Yorkshire track student suicide rates

ENGLAND - While some simply keep no records, many pointed out coroners are under no obligation to tell them if a student’s dies by...

A Roadblock or Stopgap: The Functional Impact of Alternative Green Fuels Used by The Global Shipping Industry.

By Kavinda Ratnapala In 2018 the International Maritime Organization’s (IMO) greenhouse gas strategy was released and made specific reference to realising “a pathway of CO2 emissions...

A main exporter to the world on the brink of being ravaged!

Ukraine, the second-largest country by area in Eastern Europe is embroiled in a state of invasion by its neighbor Russia. Ukrainian officials are preparing...

Inbound India Investment Flows: Recent Performance and 2022 Trends  

By Asia Investment Research   India has been positioning itself as a favoured destination to attract foreign direct investment in recent years and enjoyed strong...

Establishing a Representative Office in Malaysia: A Guide for Foreign Investors  

Establishing a representative office (RO) in Malaysia is often the fastest and most cost-effective way to have a legal entity and study the local...

A New Free Trade Tax Strategy To Redevelop And Incentivize The Commonwealth

By Chris Devonshire-Ellis     With the British economy now well out of Europe, and with the Johnson Government seemingly committed to replacement trade deals in emerging...

How The US, EU, UK and China Financial & Geopolitical Differences Could Be Resolved By London At The Upcoming Cop26 Glasgow Conference

By Chris Devonshire-Ellis  The EU and US media propaganda machine went into overdrive this week, based on US President Biden’s apparent ‘launch’ of the ‘Build...

The G7 Meeting in Cornwall – A Distant Corner of Britain to Set New Rules for the Four Corners of the World

By Chris Devonshire-Ellis  US President Joe Biden is a man on a mission.  He and UK Prime Minister Boris Johnson, who’s hosting the Group of...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

Mauritius emphasizes strategic significance of GCC nations

Port Louis, Mauritius (CU)_ The Mauritius Tourism Promotion Authority (MTPA) has announced its long-term goals and commitment to establish deeper economic relationships with GCC...

Intra-Commonwealth trade to reach $20 trillion over the next five years!

London, United Kingdom (CU)_ British prime minister Boris Johnson has praised the benefits of current relationships between Commonwealth nations and highlighted that intra-community trade...

How to handle your LGBTQ+ child when they come out!

Sydney, Australia (CU)_ Coming out may be an extremely emotional and personal process for many, including the kid and the parent. According to research,...

US honors Bangladesh’s resilience.

Dhaka, Bangladesh (CU)_ Peter Hass, ambassador of the United States to Bangladesh, stated that the United States honors a nation like Bangladesh that has...

Try this magical Ayurvedic herb for overall well-being!

Kochi, India (CU)_ Giloy is a popular Ayurvedic plant well-known for its therapeutic properties. Giloy is native to India, although it is also cultivated...

New entrants to the Oscar Academy!

Mumbai, India (CU)_ The Academy of Motion Picture Arts and Sciences has welcomed 397 new members this year, including actors Kajol and Suriya, filmmakers...

Government must prioritize children’s rights!

Male, Maldives (CU)_ First Lady Fazna Ahmed has asserted that the rights of children should be the utmost priority of government officials. She remarked...

NCDC and LUTH collaborate to combat infectious diseases

Abuja, Nigeria (CU)_ Following the successful management of COVID-19, the Lagos University Teaching Hospital (LUTH) and Nigeria Center for Disease Control (NCDC) have promised...

Star couple Alia Bhatt and Ranbir Kapoor makes a special announcement!

Mumbai, India (CU)_ Bollywood’s newly weds and adorable star couple Alia Bhatt and Ranbir Kapoor have revealed an unexpected news. Alia posted on Instagram...

How collaboration may enhance the quality of insurance services

Sydney, Australia (CU)_ Nearly two decades have been spent by Yannick Giguère, general manager of EstImage at Stelvio Australia, in creating software solutions that...

Apollo Hospitals teams up with Bangladesh’s Imperial Hospital

Chennai, India (CU)_ Apollo Hospitals of Chennai has inked an agreement with Imperial Hospital Limited of Chattogram to provide Bangladeshi patients with access to...

Malaysia pushes palm oil mills to restart production despite price decrease

Kuala Lumpur, Malaysia (CU)_ Malaysian officials urged palm oil millers to restart production and purchase oil palm fruits from farmers, following a recent drop...