Quantumrun

IMAGE CREDIT:

iStock

Global Gateway initiative: The EU’s global infrastructure development strategy

The European Union has launched the Global Gateway initiative, a mixture of developmental projects and political influence expansion.

Author:
Author name
Quantumrun Foresight
August 12, 2022

Insight summary

The European Union (EU)'s Global Gateway Initiative is a major effort to improve worldwide infrastructure, focusing on digital, energy, transport, and health sectors. It aims to mobilize significant investments by 2027, fostering partnerships that emphasize democratic values, sustainability, and global security. This initiative is poised to enhance economic and political ties globally, offering transformative benefits in education, healthcare, and economic opportunities.

Global Gateway initiative context

The Global Gateway initiative, launched in December 2021, proposes a much-needed investment in worldwide infrastructure that has the potential to bring lasting change to many developing countries. The initiative has numerous goals, from increasing digital connectivity to promoting democratic values for political and economic development.

The Global Gateway initiative boosts smart, clean, and secure partnerships in digital, energy, transport, health, education, and research systems worldwide. The initiative will mobilize up to USD $316 billion in investments between 2021 and 2027. The goal is to increase investments that promote democratic values and high standards, good governance and transparency, equal partnerships, sustainability, and global security. Several key players will be involved, including the EU, Member States with their financial and development institutions (e.g., European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD)), and the private investment sector. Working with Team Europe on the ground, the EU delegations will help identify and coordinate projects in partner countries.

Intergovernmental agencies and nonprofits like the Neighbourhood, Development and International Cooperation Instrument (NDICI)-Global Europe, InvestEU, and the EU research and innovation program Horizon Europe will help direct investments in priority areas, including online connectivity. In particular, the European Fund for Sustainable Development (EFSD) will allot up to USD $142 billion for guaranteed investments in infrastructure projects, with up to USD $19 billion in grant funding from the EU. The Global Gateway builds on the successes of the 2018 EU-Asia Connectivity Strategy and the Economic and Investment Plans for the Western Balkans. This initiative aligns with the United Nation’s 2030 Agenda, its Sustainable Development Goals (SDGs), and the Paris Agreement.

Disruptive impact

In Africa, the EU's investment and commitments, as announced at the EU-African Union summit, aim to support the continent's sustainable development. In Latin America, projects like the BELLA submarine cable system, which connects Europe and Latin America, not only strengthen digital infrastructure but also bolster economic and political ties. In the context of the COVID-19 pandemic, such initiatives have gained urgency, particularly in accelerating the digital transition and supporting global health projects, including telehealth services that transcend borders.

The initiative assists the EU in fulfilling its international commitments, especially in climate finance, by aiding partner countries in their sustainable development efforts. Furthermore, it opens doors for European industries to access emerging markets, potentially boosting the economies of EU member states. This expansion can lead to economic growth in partner countries, serving as a significant aspect of the EU's foreign policy. Additionally, in the geopolitical arena, the initiative enhances the EU's standing in the global infrastructure competition.

By investing in and partnering with different regions, the EU can establish itself as a key player in shaping global connectivity and infrastructure standards. This role not only enhances its political leverage but also allows for the dissemination of its values and governance models. Moreover, the development of infrastructure, such as digital connectivity, can have transformative effects on societies, enabling better access to education, healthcare, and economic opportunities.

Implications of the Global Gateway initiative

Wider implications of the Global Gateway initiative may include:

The EU consolidating all its developmental projects into one overarching framework, resulting in efficiencies and better political positioning.

The EU’s industrial sectors, including manufacturing and construction, benefiting the most from these investments, resulting in increased employment and technology investments.

Direct competition with China’s Belt and Road initiative, which also aims to invest in infrastructure development strategies globally.

Increased collaboration between the EU and partner nations to comply with greenhouse gas emissions pledges through developing and implementing green technologies.

Companies reprioritizing their environmental, social, and governance (ESG) policies upon participating with Global Gateway projects.

Developing nations experiencing greater foreign direct investment to support local economies and infrastructure development, as well as greater potential exposure to export opportunities in EU markets.