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G7 Partnership for Global Infrastructure and Investment

G7 Partnership for Global Infrastructure and InvestmentG7 is an organization comprised of seven of the world’s most advanced and powerful economies: the United States, Canada, France, Germany, Japan, Italy, the United Kingdom and the European Union. The leaders of these nations recently came together to announce a new G7 partnership for global infrastructure and investment. The partnership will include a funding program of $600 billion with a focus on improving global infrastructure, medicine and technology. This international funding partnership is promising to improve the lives of millions, especially in the world’s impoverished and developing nations.

G7 Promises Relief for Global Economy and Low-Income Countries

In 2021, at the G7 summit, President Biden announced a plan to enhance the economic and infrastructure needs of developing nations, as well as support the economies of the United States and its allies. This initiative was part of Biden’s Build Back Better plan.

In June 2022, after a year of collaboration between the leaders of the G7 nations, President Biden announced the partnership for global infrastructure and investment, a $600 billion initiative of global infrastructure investments between the seven countries by 2027, according to The White House.

The collaboration will officially launch the Partnership for Global Infrastructure and Investment (PGII). This should strengthen and diversify the supply chain, as well as improve the quality of life for millions of people in developing countries. The United States will contribute $200 billion over the course of five years, The White House reported. This makes it one of the most extensive contributions to low-income and developing countries in recent years, especially after facing global economic setbacks from the pandemic.

Some of the projects cited in the initiative are an industrial mRNA vaccine plant in Senegal, solar projects in Angola, a sub-sea cable linking South Asia and Europe, a linking port from Christmas Island and a modular nuclear reactor plant in Romania.

G7 Funding Program Demonstrates Effective International Cooperation

The G7 partnership for global infrastructure and investment is in part motivated by the United States and other economic powerhouses’ desire to compete with China’s Belt and Road initiative. China’s infrastructure initiative focuses on road transportation, bridges and mining, which economists estimate to cost $1 trillion.

In the G7 funding program, Biden references a wider range of goals including clean energy, gender equality, health care and communication technology. President Biden and the other G7 leaders are hopeful that the new G7 funding program will have a more direct positive impact on the lives of the impoverished, the global economy and the climate, The Guardian reports. Prior to the G7 summit, the United States, the European Union, the United Kingdom and Japan had each announced their individual global infrastructure investment plans.

In November 2021, President Biden met with multiple world leaders to ensure their plans could cooperate to create a more powerful global investment plan that would have a greater impact, according to The Guardian.

G7’s Commitment to Poverty Reduction

The G7 Partnership for Global Infrastructure and Investment marks one of the most cohesive and extensive international investment plans in recent years. The PGII will support the clean energy initiative, U.S. national security and digital infrastructure. This initiative could offer relief to the 689 million people living in extreme poverty.

The COVID-19 pandemic has pushed the poverty rate up to 9.1% in 2022 from 7.8% in 2019, signaling a dire need to support people in developing nations by offering them improved digital communication, access to medical supplies and health care, emergency COVID-19 relief and economic support. President Biden asserts that the United States’ partnership with G7 could change millions of lives across the world and the global economy could experience some relief after the pandemic.

– Ella DeVries
Photo: Flickr

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The Build Back Better World Initiative

Build Back Better World Initiative
Congress has been negotiating the size and scope of a domestic infrastructure bill for most of Joe Biden’s presidency. Still, action is necessary to further infrastructure abroad. The U.S. and its allies in the G7 recognize this need and have launched the Build Back Better World Initiative (B3W) to address global infrastructure challenges. A closer look at the initiative provides insight into the state of infrastructure in low and middle-income countries around the world.

The Infrastructure Gap

Infrastructure connects people and goods, which allows economies to scale and grow. Forming highways, ports, bridges, railways, pipelines, sewage systems and more, infrastructure projects are vital for transport, communication, energy and health. Infrastructure projects are the foundation of economic development and are vital to the Sustainable Development Goals (SDGs), including universal access to water and electricity. 

Infrastructure projects are also important for developing nations because the projects can be a major source of employment, spurring economic growth and allowing workers to gain new skills. The White House currently estimates that the infrastructure needed in low and middle-income countries globally totals more than $40 trillion.

Infrastructure gaps are significant because the gaps hinder economic growth. According to World Bank research, “Every 10% increase in infrastructure provision increases [economic] output by approximately 1% in the long term.” In other words, spending on infrastructure grows an economy. Further, as environmental challenges continue to threaten nations around the world, the World Bank says that even small investments in climate-resilient infrastructure can save trillions of dollars in recovery efforts.

The Build Back Better World Initiative

Partnering with G7 nations, the U.S. launched the B3W to alleviate some of the problems associated with infrastructure gaps. The White House will look toward not only its allies but the private sector for hundreds of billions of dollars in funding for infrastructure investment. The administration says that it will leverage partnerships with the private sector because “status quo funding and financing approaches are inadequate” to meet the size of these challenges. 

The focus for projects is four distinct areas, including climate, health, digital technology and gender equity. The aim is to reach all around the world with different partners, but, USAID and other U.S. development groups will take leading roles. However, there is still an understanding that local needs will be a priority, as “infrastructure that is developed in partnership with those whom it benefits will last longer and generate more development impact.” 

The Biden administration has stressed the importance of good governance in foreign assistance and has already noted the importance of using B3W as a way to encourage full transparency with monitoring tools, common contracts and metrics for evaluation.

The Build Back Better World Initiative and US Interest

Foreign assistance supports U.S. strategic interests, which is why Deputy National Security Advisor for International Economics Daleep Singh has indicated support for the initiative. In recent years, especially when the U.S. has taken a step back from foreign affairs, China has accelerated spending on global infrastructure with the Belt and Road Initiative. 

However, Singh indicates that the point of the initiative is not to inflame hostilities or work as an anti-China group but rather to provide an alternative to Belt and Road financing. The goal is to “rally countries around a positive agenda that projects our shared values.” B3W supports U.S. interests by providing an alternative and showing that the U.S. is once again ready and willing to be a good partner for the world.

With Congress working on a domestic infrastructure package, it is important to not lose sight of the critical need for sustained and significant investment in infrastructure around the world. Infrastructure projects connect the world, making it safer and healthier. Funding infrastructure around the world as part of the Build Back Better World Initiative aligns with U.S. strategic interests. Hopefully, this initiative will encourage bridging gaps and becoming a more connected world.

– Alex Muckenfuss
Photo: Flickr

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G7 Alliance to End Educational Poverty in Developing Countries

Alliance to End Educational Poverty
The G7 Alliance, otherwise known as Group of Seven, is a global intergovernmental organization made up of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. The key principles of this organization are freedom and human rights, democracy and the rule of law and prosperity. The organization promotes sustainable development through “a community of values” by convening at yearly G7 summits. Most recently, the G7 has entered an alliance to end educational poverty in developing countries. 

The G7 Alliance and Goal 5

The G7 Alliance derives from Goal 5 of the G7 Alliance’s Global Goals. The goal is to achieve gender equality. The G7 hopes to do this by ensuring equal access to quality primary and secondary education for both boys and girls. Together, the priorities aid in the path to end poverty in developing countries by 2030.

The G7’s 2021 effort toward Goal 5 includes sending 40 million more girls to school within the next five years. To achieve this, G7 countries will allocate $15 billion to support women and girls’ education in low- and middle-income countries. This movement also includes action to aid in an additional 20 million girls across the world learning how to read by 10 years of age.

Many developing countries already neglected education, especially for women and girls, before the COVID-19 pandemic. The pandemic inflicted a new set of conditions that worsened education reform in countries that need it most. Prior to the COVID-19 pandemic, 132 million girls around the world lacked access to an adequate education. Additionally, only one in four countries has equal likelihoods of upper-secondary school attendance for boys and girls.

According to Save the Children, the effects of the pandemic have threatened to reverse the gains that many areas have made regarding girls’ education in recent years. About 11 million girls are currently at risk of completely losing their access to education. In Ethiopia alone, the COVID-19 pandemic forced over 26 million children to leave school due to school closures. 

Moving Forward in the Alliance to End Educational Poverty

The G7 Alliance’s commitment toward Goal 5 is one of the largest in terms of scope and projected impacts. However, the Alliance has yet to decide the details of where the funding must come from and where the funding must go.

The G7’s alliance to end educational poverty is placing education at the forefront of policy reform and international aid as countries adjust to the constant new norms that come with each day of the COVID-19 pandemic. This priority could positively affect global economics and accelerate overall global recovery and wellbeing.

– Kylie Lally
Photo: Flickr

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5 Ways that Global Poverty Affects Women

women are more affected by global poverty
Women often make up the backbone of home and society, however, global poverty often affects women the most. Women across the globe are still fighting for equality in their workplaces, general society and in their own homes. This inequality is a significant factor why women make up the bulk of the impoverished population in the world.

According to data that the U.S. Census Bureau released in 2017, the maximum rate of poverty for men was 7% while the minimum poverty rate for women was 9.7%. Depending on the race and demographics, this rate only tends to increase. Here are five ways that global poverty affects women.

5 Ways that Global Poverty Affects Women

  1. Gender Wage Gap: The availability of equally paid jobs is critical in making women independent and hence improving any economy. According to the World Economic Forum, the annual average earnings of the men around the world was $23,000 in 2018. In contrast, the global average of annual earnings of women was only $12,000. The international intergovernmental economic organization G7 inferred from collected data that the gender wage gap is prevalent throughout the world. Furthermore, G7 determined that the gender wage gap does not depend on the current financial status of any country. The G7 claimed that the global average gender wage gap was still 17% in the year 2016. Moreover, discrepancies in the wages that employers paid to women, even in developed countries, affected women in economically weaker countries and low-paying jobs significantly.
  2. Job Segregation:  The International Labor Organization (ILO) found that nearly 80% of the female labor force works in the service sectors and less-paid clerical jobs contrary to managerial, professional or leadership roles. More women in administrative positions would bring in diverse and complementing perspectives into the idea pool. An increase in females in administrative positions would also allow an insight into the female consumers’ psyche. All of these benefits, plus an increase in creativity, would consequently increase revenue. In most countries, including many developed countries, the number of women in STEM (Science, Technology, Engineering and Mathematics) is unquestionably lesser than men. Only 28% of employees in STEM fields, which are the fastest-growing with higher paid jobs, are women. In addition to conservative social norms and gender bias, the lack of female role models also contributes to the smaller women labor force in STEM fields.
  3. Motherhood: Pregnancy can often be the tipping point in any woman’s career path. While women may face wage penalties, men might win salary premiums. Women frequently choose to take time off to stay at home and care for their children. However, the career break adversely affects their salaries even after they return to work. From the data that a study in Denmark conducted, a country with high gender equality measures, the salary of women sharply dropped nearly 3% after the birth of the first child and never recovered.
  4. Unpaid Caregiving: Another way that global poverty affects women is that they often don the role of caregivers for the elders and children in a family more than men, which is unpaid work. This extra work, nearly twice to 10 times the work that men do, is worth almost $11 trillion per year. Although women’s unpaid work amounts to nearly four years more work than men, women still earn less at their paid jobs. This is most likely due to the fact that women prefer part-time and easily transferable jobs after having a baby, in order to provide proper care for the child. Policies targeting lower childcare costs might help women in the long run. Additionally, policies focusing on incentives for men in sharing the childcare and domestic chores would also help women greatly. In general, providing any sort of assistance to alleviate the extra work of women would help in the long run. For example, women in Malawi spend 54 minutes a day on average collecting water. Providing labor-saving infrastructure results in less time obtaining water and more paid hours for women. Gender inequality in developing countries costs their economies $9 trillion per year. In Latin America, women’s paid work increased between 2000 and 2010. This resulted in a 30% reduction in poverty.
  5. Gender-biased Illiteracy: In low-income countries, the average literacy rate of men is 70% and 50% for women. In the 2014 World Value Survey, 26% of people across the world said that university education is comparatively more essential for a boy than a girl. A 2016 study in Nepal revealed that the poorer households sacrificed the literacy of daughters for better job prospects for sons.

How Organizations are Helping

Countries around the world have begun to realize that the inclusion of women, especially in leadership roles, is necessary for sustained, overall development. LivelyHoods, a nonprofit organization, noticed that the women were mainly the ones who dealt with household energy. In Kenya, indoor pollution due to smoke from conventional stoves causes 13,000 deaths per year. In an effort to combat indoor pollution, LivelyHoods employed the rural women population in Kenya to distribute life-improving, affordable, clean-energy products to the local population. The network of saleswomen that the organization employed distributed eco-friendly products like solar products, clean-burning cookstoves and many others. Of the top 10% of the salesforce, 90% are women who earn up to $1,000 per month. Over 1,500 trained women employees have distributed 26,000 clean energy products so far. This is an inspiring example of how indispensable women are to global development.

Ideas for Moving Forward

To help impoverished women improve their quality of life, governments could offer publicly financed schemes of extended leaves of absence for new mothers; replace individual taxation with family taxation so that the burden on the secondary earners, who are mostly women, lifts; provide tax benefits for low-wage earners; reduce the childcare cost for working women; encourage businesses to develop better practices like pay transparency and regular wage assessment based on gender; conduct free workshops for women to impart vocational skills as well as to spread awareness of various available job opportunities; offer equal job opportunities to women; conduct workshops in the men’s workplaces to show them how their personal and nation’s economy will flourish by sharing the childcare and domestic duties. Even implementing just a few of these tactics could help reduce the inequality women around the world face.

– Nirkkuna Nagaraj 
Photo: Flickr