European Union Announces Multi-Billion Euros Deals At The Global Gateway Forum
Criticism over a lack of public transparency and putting profits ahead of real project needs have surfaced
The European Union has announced numerous multimillion dollar deals at its Global Gateway Forum, the bloc’s new infrastructure partnership plan that’s seen as an alternative to China’s worldwide Belt and Road Initiative (BRI).
The first Global Gateway Forum kicked off in Brussels on October 25 and featured 90 government representatives from more than 20 countries, including 40 leaders and ministers. Heads of state from Armenia, Comoros, Namibia, Mauritania, Senegal, and Somalia attended the event, along with prime ministers from Albania, Bangladesh, Cape Verde, the Democratic Republic of Congo, Egypt, Georgia, Moldova, Morocco, Rwanda, and Serbia.
However, many EU countries did not send their top officials to attend the gathering, with Germany represented by its climate secretary and Denmark and France by their development secretaries. Italy did not send any representatives.
The 27-country EU announced that Global Gateway already had €66 billion euros (US$69.6 billion) in deals at the opening of the summit and proceeded to sign an additional €3 billion euros (US$3.2 billion) worth of new agreements with governments across Europe, Asia, and Africa during the forum to support projects related to critical raw minerals, green energy, and transport corridors.
Announced projects included deals on critical raw materials with the Democratic Republic of Congo and Zambia, as well as cooperation on clean energy with Bangladesh, Cape Verde, Namibia, the Philippines, Tanzania, and Vietnam. A €12 million (US$12.6 million) grant was provided to Moldova to build new rail lines, a new agreement signed to support Turkmenistan’s entry into the World Trade Organization, and a €30 million (US$31.6 million) investment to advance vocational education and training in Tajikistan.
Other smaller-scale deals were signed with Armenia to invest €10 million (US$10.5 million) in education and with Georgia in the form of a €16 million (US$16.8 million) grant to improve safety along the country’s East-West highway, which forms the backbone of Tbilisi’s connectivity ambitions along the Black Sea and has mostly been built by Chinese constructions firms.
In her opening speech, European Commission chief Ursula von der Leyen vowed to pursue high-quality investments, saying that Global Gateway was a “better choice” for financing and building clean infrastructure.
“The Global Gateway is about giving countries a choice, and a better choice,” she said, adding that other investment options often come at a “high price” for the environment, workers’ rights, and sovereignty.
The Forum was an invitation only, closed-door event, dominated by politicians and business leaders. Civil society and trade union voices were conspicuously absent. The event was held to promote the European Commission’s strategy to use development funds to attract private investment in infrastructure in the Global South. It marked a fundamental change to the space for civil society to interact with the European institutions on their development agenda. In the past, events like the annual European Development Days (EDDs) allowed for a more broad and open dialogue.
Consequently, there has been criticism. Alexandra Gerasimčiková, a Policy and Advocacy Officer at Brussels based Counter Balance, said: “The Global Gateway Forum reflected the private sector-driven aid framework which the Global Gateway epitomises. Only a selected group of actors were invited to attend the event instead of open, public participation and input from civil society organisations. As a result, the propping up of European capital and the financial sector – instead of prioritising real development results and social investments – is at the centre of the Global Gateway.”
The Global Gateway strategy was set up as a European de-risking agenda to compete with Chinese global infrastructure investments through its Belt and Road initiative. This means that development funds are used to guarantee maximum profits for corporations and asset managers from social infrastructure and public goods.
Chris Devonshire-Ellis, of Dezan Shira & Associates comments “There are strategic differences between the EU’s approach to its Global Gateway and China’s Belt & Road Initiative. First, the EU intends the private sector to take the lead and fund projects. That means the onus is purely focussed on profit.
With the Belt & Road Initiative, potential projects are funnelled first through Government-to-Government discussions that focus on actual strategic development needs and viability first. The profit issue is secondary and can therefore be absorbed in different ways, with China’s State-Owned and increasingly its private sector both being involved. Returns on investment are measured in various ways in accordance with specific needs. These can manifest via a lower , or no initial capital return in exchange for cash flow equity. They can do the same with an eye on a later IPO. Or Beijing can step in and fund projects either fully or partially, depending on other circumstances such as security, geopolitical and humanitarian interests that both parties may have. The Chinese scope of project management is far broader and more versatile than the EU’s focus on immediate corporate profits.”
The Global Gateway Business Advisory Group, containing 60 of the largest companies in Europe – also includes companies such as TotalEnergies, ENEL, Volvo and Bayer – which opens the door to corporate lobby influence. Remarkably, the participants do not include any public or private enterprises from any of the intended recipient countries.
Jean Saldanha, Director of the European Network on Debt and Development (Eurodad) said: “The infrastructure focus of the Global Gateway initiative cannot be seen as independent from the EU’s green transition ambition. While there were some warnings against the Global Gateway turning into colonialism 2.0, the lack of any clear commitments to invest in value creation in countries rich in resources essential for this transition – a repeated call of many partner countries’ leaders speaking at the forum – illustrates a ‘business as usual’ approach. This equates to more inequality and more exploitation of impacted communities, rather than the win-win that is central to the ‘superior’ offer of the Global Gateway.”
Launched in late 2021 and championed by von der Leyen, Global Gateway has earmarked €300 billion (US$316 million) in a bid to streamline the EU’s investment and development cooperation across the globe. Officials say the program will prioritize projects focused on renewable energy, digital transitions, and sustainability as Brussels looks to mobilize investment from member states and the private sector. It remains unclear where this money will come from, and over what period of time, although von der Leyen has stressed previously that this will be private sector funded. The amount quoted is about a third of China’s estimated US$1.1 trillion spend to date.