Focus harder to rival China’s vast global investment plan, Brussels is told

The EU needs to get serious about competing with China for influence around the world with a megaplan for international investments that’s relentlessly focused on what works. 

That is the message in an internal European Commission briefing document on the global infrastructure program that Brussels hoped would rival Beijing’s vast Belt and Road Initiative.

The paper, seen by POLITICO, warns that efforts so far under the EU’s €300 billion Global Gateway plan have fallen flat because they’re “spread too thinly.” 

The next round of investments — set to be decided later this year — should focus on so-called geographic “corridors” where the impact of funding can stack across multiple projects — for example building new energy, raw materials and transport infrastructure, it said. 

Projects that could receive cash include copper and cobalt mining from Zambia to the Democratic Republic of Congo, and increased engagement with Central Asia.   

At the moment, “our efforts are spread too thinly across too many fronts, lacking strategic focus,” said the paper, written by the Commission’s Directorate-General for International Partnerships.

The Global Gateway program was launched in an attempt to project European power and influence as an international partner particularly for developing economies around the world. China is years ahead in cementing relationships with governments in Africa and elsewhere, plowing money into projects such as ports, road and rail, telecommunications and power stations. Some 140 countries around the world are already part of China’s program, which was launched in 2013.

The EU’s Global Gateway initiative, launched formally last year, aims to unlock as much as €300 billion by 2027 in public and private funds. So far, more than 200 projects receive funding under the program. 

The critical tone of the briefing document represents an acknowledgment that the initiative so far has fallen short of its potential. 

Political leadership in Brussels is about to undergo an upheaval, with European Parliament elections scheduled for June and a new Commission due to be appointed soon after. EU civil servants will decide on candidates for a new batch of investments after the summer.

The new Commission should “maximize impact and show that the EU can deliver results by focusing on a limited number of transformational Global Gateway flagships which clearly showcase the impact,” the paper said. 

Copper, cobalt and Central Asia

A well-known corridor that already fits the bill is the Lobito Corridor between the Copperbelt in Zambia and the Democratic Republic of the Congo, tied by railway to the port of Lobito in Angola. Aside from copper, the region is also the world’s chief source of cobalt.

The financial plumbing is already underway, through a deal with the African Investment Bank and an investment agreement with Angola, plus raw materials partnerships with the DRC and Zambia. The Lobito investments aren’t only meant to unlock mines, but also to build digital and agricultural links.

Another strategic corridor is the EU's links with Central Asia. With China trying to unseat former colonizer Russia the next Commission “should not miss the opportunity to strengthen the EU's position in the region, contain China and respond to Central Asia's increasing willingness to engage with the EU.” The EU wants to develop a Trans-Caspian Corridor to bypass Russia and has signed a deal with silver and titanium-rich Uzbekistan.

Global Gateway is meant to seduce countries away from China in the global competition for raw materials, with €300 billion before 2027. 

The paper concludes that "key challenges remain in ensuring effective coordination," suggesting the program will struggle if the Commission doesn’t refocus the strategy, since it needs EU countries, banks and private companies to chip in as well. 

Battle of offers

“Emerging Markets and Developing Economies live in an à la carte world and will pick and choose from a menu as they see fit. There is a battle of offers,” the document observes. 

The offers come from Beijing, Washington and now also from Brussels. The reference, of course, is to China’s Belt and Road initiative and Washington’s Inflation Reduction Act. Commissioner for International Partnerships Jutta Urpilainen said roughly the same thing when we spoke to her two weeks ago.

Calling for the EU to move “beyond narrow donor-recipient approaches,” the paper sets out some hard truths. “We have too often underestimated the significance for Europe’s direct interests of Emerging Markets and Developing Economies in Asia, Africa and Latin America.”

Anyone familiar with recent EU summits with partnership blocs would see the point.

Recent gatherings bringing Caribbean, Latin-American and Indo-Pacific nations to Brussels showcased the unease a lot of governments of developing countries have with the EU’s push to put climate and environmental targets into trade policy. Russia’s full-scale invasion of Ukraine also exposed how many countries don’t automatically agree with Brussels’ view on the world.

DG INTPA's report is also critical of EU countries, saying the Global Gateway is tackled by different national ministries in a “disjointed fashion.” The 27 national directors in charge of the strategy are set to meet in late May in Brussels to hammer out inconsistencies on this front.

Not everyone is excited about rebranding development aid into an investment strategy, however. Rilli Lappalainen, president of development NGO CONCORD, said he was “shocked” at what “is basically a trade and investment strategy for the EU based on its geopolitical interests.”

He added: “Nowhere do we see a concern for the priorities of partner countries, let alone an interest in ensuring that people’s lives are improved.”

The Commission argues providing opportunities for developing countries to industrialize — especially in the health or green energy sectors — will provide jobs and local expertise in the long run.