Why EU says its foreign aid is now ‘geopolitics on steroids’

Everyone in the European Union development bubble is talking about the “Global Gateway” — but few can agree on what it is. A new €300 billion ($318 billion) strategy to invest in green, sustainable, digital infrastructure, according to the European Commission. A repackaging of the status quo for some Members of the European Parliament — or even a potentially dangerous departure from the Sustainable Development Goals for some NGOs. Perhaps it is simply the latest effort to do what EU development policy has always done: try to make friends and influence people around the world by co-financing projects with loans from European development banks, complemented where possible by precious grant money. In 2007, there was the EU-Africa Infrastructure Trust Fund. In 2018, it was an Alliance for Sustainable Investment and Jobs. And, since December 2021, there is the Global Gateway. In a media briefing last week, three “senior EU officials” answered questions from journalists on the standard condition that they be quoted anonymously. Here are excerpts from that briefing, edited for length and clarity. To what extent is Global Gateway a joint endeavor with recipient countries? Were these countries represented on the strategic board in December 2022, for instance? Senior EU official #1: We've never been in a situation where we said, ‘I pay, I decide.’ We have been doing partnerships for a long time. We’re not living now in days where it is ‘they decide, we pay’. It's always about where we see a convergence of interests. It's true that no doubt partners have certain ideas, certain priorities, which they want to do, and on which we cannot partner for a multitude of reasons. We have our Venn diagram, they have theirs. Where these two Venn diagrams overlap, that's the space on which we want to move. Of the 87 Global Gateway flagship projects for 2023, just 11% cover human development (seven on health and three on education). The EU development budget, which funds the public money in Global Gateway, has a 20% human development target. So how do you marry the legal requirement to hit human development targets with the impression we are increasingly getting that everything the commission’s development department (Directorate-General for International Partnerships) does is now Global Gateway? Is there anything INTPA does that is not Global Gateway? Senior EU official #1: A sizable part of the Neighborhood Development and International Cooperation Instrument [the commission’s €79.5 billion budget for external spending from 2021-2027] will be mobilized to deliver Global Gateway, but not all of it. Global Gateway is not an exercise for accountants. --— Anonymous EU official As far as health or education and skills are concerned, we will be mobilizing funding in those human development-related areas. When we do a hard infrastructure project or where we do green hydrogen and so on, we will build the skills component around it. That falls under Global Gateway. But there is plenty of other stuff which is not Global Gateway and which we will do. Global Gateway has not changed the regulation of our financial instrument, and therefore, the various targets that are part of the regulation — there's a human development target, there's also a migration target, there's a climate change, environment target, and so on. These targets obviously have to be met. Likewise with the indicator on DAC-ability [the amount — 93% — of NDICI which must be eligible to be counted as official development assistance under OECD rules]. And we find from the monitoring we’ve done, from the systems we have put in place, that that's actually not a problem. How were these 87 projects selected? Who selected them? Senior EU official #1: These 87 projects — and there are many, many that lie behind this list — are basically the low-hanging fruit. It's those that somehow generate something in 2023. They all meet as a benchmark, the fact that they have, at the core, a hard infrastructure component. To what extent do geopolitical considerations inform the choice of projects? Has the Ukraine war affected the choice of projects? Senior EU official #2: It’s above all a geopolitical offer in the sense that we must make sure that our interests coincide with those of our partners. And we are looking to partners who are looking to us, considering that the other offers they had were either not sustainable or did not respond to their needs. But we also chose countries where we were already engaged and because they have a certain influence in their region or in the current geopolitical context. We also have an interest in reinforcing our offer in these countries. Senior EU official #1: We take into account the connection between these parts of the world and Europe. We are going to invest in the development and connectivity between these parts of the world and the European market. Same for everything related to renewable energy and notably green hydrogen, and for critical raw materials. Senior EU official #3: The impact of the Russian war of aggression in Ukraine shows the importance of investing in digital and energy infrastructure. Hence why we are investing in the EU neighborhood and Western Balkans in this energy transition, rapidly. We are going to invest in the investments that are the most strategic for the partner countries and for the European Union. Of these 87 projects, how many are brand new? How many were pre-existing or rebadged in some way? Senior EU official #1: Of course, you don't start from scratch. It's not like we took a white piece of paper after the adoption of Global Gateway [in December 2021] and started from there. The search for a more geopolitical way, which started many years ago, has been dynamized because of COVID-19 and because of Russia's war. So it's geopolitics on steroids, with a vengeance. If you look at the projects on the table, the main distinction is the way in which they are being done. Of course, several of these projects were already on the wish list of our partner governments. What we have done — and that's what has changed — is that we have now embraced it, precisely because we see that from a geopolitical point of view, it makes sense. How much of €300 billion total commitment to be mobilized under Global Gateway will be met by this raft of 87 projects? Senior EU official #1: Global Gateway is not an exercise for accountants. So whereas obviously, we will keep track of how we spend the money — whether it's the EU budget money, the loans provided, the private sector investments, and so on — very often, the quality and the importance and the impact of what we do cannot be reduced to the sole issue of how [much] money you have spent on it. And I think we have a number of examples, where actually we're making very good progress on the ground — let's say in vaccine production in the number of cases where actually, for the time being, very little money has been spent. Why? Because in the first stage, it's mainly about capacity building, it's about training, it's about technical assistance, it's about investing in people, before you invest more firmly in the hardware. What is the percentage of projects in raw materials, connectivity and research for Latin America? Senior EU official #1: I would recommend you don't look at this list, and then start looking for percentages in terms of how much is energy, how much is digital, how much is transport, and so on. Why? Because we have not been looking at this list from that angle. The purpose has not been to present you with a balanced package, not geographically balanced, nor thematically balanced. The list you see now has been purely selected in terms of maturity of delivery. So the only question we asked ourselves, when we look at the more substantial database of projects we have, is ‘which are the projects where in the course of 2023, something tangible will happen?’ So you can't draw conclusions from this list in terms of ‘ok, vis-à-vis Latin American and the Caribbean the EU is maybe doing digital or mainly doing energy.’ Because the list provides you with a very narrow snapshot. What is the Global Gateway going to do to stop Europe financing Chinese companies building these kinds of projects? What can you do concretely to change procurement rules on a project, when you are often in co-financing with other major global development banks? Senior EU official #1: It's about how you design qualifications for the tender, in the case of public procurement. It's about what kind of benchmarks you put in the criteria, the relative weight of those criteria. So there's things you can do there. And secondly, it is about also making sure that bidders participate. That's why, as we design further the rollout of Global Gateway, on a project basis, we are discussing with our member states, with the private sector. If we want to do electric buses in certain parts of the world, we want to make sure that those who produce electric buses in our parts of the world, indeed, are equipped and want to participate in those tenders. And the same applies obviously even more so in the digital world where we want to work with trusted partners.