THE world witnessed recently a gathering of world leaders at two important events, Apec 2022 and COP27. Both international conferences provide a platform to foster cooperation over major global issues. Although not formally discussed as part of their agendas, global infrastructure initiatives such as China’s Belt and Road Initiative (BRI) and the US-led Partnership for Global Infrastructure Investment (PGII) are at the core of competing goals of economic growth and decarbonisation globally. The efficacy and quality of global infrastructure investments will significantly affect the road map set by the 2015 Paris Agreement.

PGII was unveiled in June 2022. It combines multiple ongoing infrastructure plans initiated earlier by G7 members. Among others, it includes the European Union’s Global Gateway and the United States’ Blue Dot Network. In all, PGII committed more than US$600 billion over the next five years to be drawn from public and private funds as well as from international financial institutions. In comparison, the total contract value of BRI projects initiated and completed since 2013 is US$932 billion.

The geopolitical ramifications of PGII vis-a-vis China’s Belt and Road Initiative (BRI) remain to be seen and assessed by experts in the years to come. What’s undeniable is the huge “infrastructure investment gap” in the developing world. The Asian Development Bank (ADB) estimated in 2017 that Asia alone would need US$26 trillion of infrastructure investments from 2016 to 2030. Hence, at its core we can view the competitive dynamics between global infrastructure initiatives as a fundamental economic problem of supply and demand. Closing the gap will have spillover benefits for the global economy, unlocking new markets and industries. It’s no surprise that there is now more than one player in the global market of infrastructure investments.