Worldwide: “Clean Green” to counter the belt and the road
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Bloomberg News last week reported that the Group of Seven Nations (G7) intended to launch an alternative to China’s Belt and Road Initiative when they meet later this week in Cornwall. , in England. The strategy should be called the “Clean Green Initiative” and it is hoped that it will provide a framework to support sustainable development in developing countries. As the global minimum tax discussion dominates the G7 headlines, “Clean Green” is an important development with ramifications for US and multinational energy companies.
The Belt and Road Initiative is a massive infrastructure project stretching from East Asia to Europe, which aims to create a network of railways, pipelines, border crossings, sea routes and special economic zones. Over 60 countries have joined the Belt and Road projects, and over 100 have expressed interest. Critics, however, argue that Belt and Road is “debt trap diplomacy,” using low-interest loans that several countries have struggled to repay. Critics have also focused on Belt and Road’s opaque tendering processes, which they say foster a culture of corruption, and the requirement that Belt and Road participants hire exclusively Chinese companies. These two factors have prevented multinational energy companies from the United States and other non-China from participating in major infrastructure projects in developing countries.
The United States and its allies have been concerned about Belt and Road for some time, but to date they have not been able to come up with a credible alternative. Individual members of the G7 have attempted to come up with their own alternatives in recent years, without much success. But all G7 countries are committed to an alternative that emphasizes transparency and the rule of law. Even if the contours of “Clean Green” are still undecided, the fact that the G7 takes a tangible step towards an alternative to Belt and Road should be a boon for American and multinational energy companies, in particular those in the renewable energy sector. Given the criticisms of the opacity of the Belt and Road project, “Clean Green” will almost certainly contain a strong commitment to transparency and the fight against corruption. As a result, companies with existing international operations and strong compliance programs will have an advantage in securing early projects. Clean Green projects are expected to provide the United States and other multinational energy companies with significant opportunities to increase their market share in developing countries.
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