Economy39 minutes ago (Apr 29, 2022 07:15AM ET)
© Reuters. FILE PHOTO: U.S. Treasury Secretary Janet Yellen testifies before a House Financial Services Committee hearing on “the State of the International Financial System, on Capitol Hill in Washington, U.S., April 6, 2022. REUTERS/Tom Brenner/File Photo
By Andrea Shalal
WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen urged the World Bank and other multilateral development lenders to accelerate infrastructure investments in emerging market countries as part of a concerted effort by the G7 wealthy democracies to counter China’s multitrillion-dollar Belt and Road initiative.
Yellen convened Group of Seven finance and development ministers and presidents of multilateral development banks on Tuesday for talks on boosting infrastructure investment in low- and middle-income countries, the Treasury Department said in a statement.
“Secretary Yellen closed the event with a call to action for the MDB leaders – with support from their shareholders – to implement bold and innovative approaches to step up quality infrastructure, including actionable plans to mobilize new private capital within six months,” it said.
The G7 economies – the United States, Canada, Britain, Germany, Italy, France and Japan, plus the European Union – last year kicked off a concerted drive to narrow the $40 trillion gap in infrastructure funding https://www.reuters.com/world/g7-counter-chinas-belt-road-with-infrastructure-project-senior-us-official-2021-06-12 facing developing nations by 2035.
The G7’s “Build Back Better World” (B3W) initiative aims to mobilize public and private-sector investment in climate, health, digital technology and gender equity, in what could be a counterweight to the Belt and Road Initiative (BRI) launched by Chinese President Xi Jinping in 2013.
Treasury said Tuesday’s meeting included top G7 ministers and the leaders of the African Development Bank, Asian Development Bank, Inter-American Development Bank, European Bank for Reconstruction and Development, and the World Bank.
“We know that infrastructure investment – when done right- drives sustained and sustainable growth … and is essential to deliver basic services to people, to keep trade flowing, and to create jobs,” Yellen told the meeting.
She urged participants to leverage public funds to mobilize private capital and to explore collective action solutions.
Canadian Deputy Prime Minister and Finance Minister Chrystia Freeland told participants the initiative could play a key role in boosting physical and social infrastructure investments in the countries that need it most, while assuring gender equality.
World Bank President David Malpass shared details of the bank’s new climate-related diagnostic tools and said they would encourage investment in climate-smart infrastructure, including for adaptation and reduction of greenhouse gas emissions.
Malpass, who has been sharply critical of nondisclosure agreements required by Chinese lenders, also repeated his calls for greater transparency about debt and lending as developing countries expanded their infrastructure.
Yellen said she looked forward to seeing new private capital mobilization targets from the multilateral development banks, and their ideas on how to expand funding for infrastructure initiatives.