U.S. President Joe Biden and Group of 20 (G20) allies announced plans in New Delhi to build a rail and shipping corridor linking India with the Middle East and Europe, a landmark corridor aimed at boosting economic growth.
“This is a big deal,” said Biden. “This is a game changing regional investment and … huge steps forward.” The corridor was outlined on September 9 at the annual G20 summit of the world’s top economies. It envisions to help boost trade, deliver energy resources, and improve digital connectivity.
Analysts consider the new economic corridor connecting Asia, the Middle East, and Europe as a challenge to Beijing’s Belt and Road Initiative (BRI) economic ambitions aimed at expanding global trade. At the summit, the U.S. and the G20 allies collaborated to address issues affecting developing countries, global food security, the conflict in Ukraine, global health challenges, climate change, and digital transformation.
China and Russia skip G20
The United States had the opportunity to strengthen the G20 as an international forum as the Chinese President Xi Jinping and Russian President Vladimir Putin chose not to attend the summit and sent their representatives instead.
Biden said he was disappointed by Xi’s decision. When asked about the Chinese leader’s absence, Biden said that the summit “is going well” though “it would be nice to have him here.”
Ukraine President Volodymyr Zelenskyy, who has been frequently seen at international summits since the Russian invasion of Ukraine more than 18 months ago, was not invited by Modi’s government to the gathering.
The joint statement laid out views on climate change and economic development and opposed the use of nuclear weapons. However, the G20 stopped short of explicitly condemning Russia’s invasion of Ukraine as Russia and China, as members of the G20, resisted stronger language in a final statement.
Biden announces new projects to generate economic growth and jobs
President Biden announced several new projects to generate economic growth and incentivize new investments. These include railway and shipping corridors that would connect India with the Middle East and ultimately Europe.
“It’s about creating jobs, increasing trade, strengthening supply chains, boosting connectivity, laying foundations that will strengthen commerce and food security for people across multiple countries,” Biden said. “When we invest in low middle-income countries, all countries benefit,” Biden added. “When we invest in emerging economies, all economies benefit, and when we invest in the future of people anywhere, people everywhere benefit.”
Together, the United States, India, Brazil, and South Africa reaffirm our shared commitment to the G20 – delivering solutions for our shared world. pic.twitter.com/a5SNjR0h4E
— President Biden (@POTUS) September 9, 2023
Economic opportunities and investments
At the 2023 G20 Summit in New Delhi, President Biden and Indian Prime Minister Modi co-hosted a group of G20 leaders to accelerate investments and the development of economic corridors through the Partnership for Global Infrastructure and Investment (PGI). The meeting included the leaders from the United States, the European Union (EU), France, Germany, India, Italy, Japan, Mauritius, the United Arab Emirates (UAE), Saudi Arabia, and the World Bank.
Indian Prime Minister Narendra Modi, European Commission President Ursula von der Leyen, and other leaders joined Biden in the announcement. Von der Leyen called the project a “green and digital bridge across continents and civilizations.” She added that it includes cables to transmit electricity and data.
India-Middle East-Europe Economic Corridor
A transformative partnership linking India to Europe through a railway, ports, and the Middle East, facilitating global trade, clean energy distribution, and telecommunications.
“Enhancing connectivity with all regions has been a key priority for India,” Modi said. “We believe that connectivity is a means to not only increase mutual trade between different countries but also increase mutual trust.”
The project to connect India to Europe would include India, Saudi Arabia, UAE, Jordan, Israel, and the European Union, said Jake Sullivan, U.S. national security adviser.
The agreement comes amid Washington’s careful diplomacy to engage with Saudi Arabia, encouraging it to normalize ties with Israel. If a normalization deal is reached, Israel could be included in the railway project, first envisioned during a meeting of the I2U2 forum of the US, Israel, the UAE, and India, according to Axios.
Lobito Corridor Development
The allies also announced the expansion of the Lobito Corridor connecting the Democratic Republic of Congo, Zambia, and Angola, with support from the European Union and a focus on critical minerals, clean energy, digital access, agriculture, and economic diversification.
Speaking of the ‘Trans-African Corrido’ connecting the Angolan port of Lobito with landlocked areas of the continent, Biden called it a “game changing regional investment” and said, “Both of these are huge, huge steps forward.”
In another key development, the G20 welcomed the African Union as a permanent member of the G20, reflecting Africa’s importance in the global economy.
For a #G20, which is more inclusive and more vocal for Global South!
— G20 India (@g20org) September 9, 2023
PM @narendramodi warmly invites President @_AfricanUnion & Comoros Azali Assoumani to join other G20 leaders as African Union becomes a permanent member of the G20.
A key outcome of #G20India. pic.twitter.com/ScLTGkQ4G1
Economic Cooperation with India
The PGI includes a range of economic cooperation projects with India with a focus on renewable energy. U.S. Development Finance Corporation (DFC) approved financing of up to $425 million for a solar manufacturing facility in Tamil Nadu. India and the United States are collaborating on a renewable infrastructure investment fund to accelerate the deployment of greenfield renewable energy, battery storage, and emerging green technology projects in India. The two countries would mobilize public finance and philanthropic efforts to accelerate the adoption of 10,000 electric buses in India, diversifying the e-mobility supply chain.
The economic cooperation also includes health manufacturing and support for insulin production in India to make it accessible globally. The U.S. and India would also collaborate on secure telecommunications and 5G/6G technology development.
Biden’s Ambitious Agenda for the G20
At the G20 Summit in New Delhi, U.S. President Biden committed to addressing global challenges and fostering sustainable and inclusive growth in various areas through international cooperation within the G20 framework.
According to the White House, the United States plans to build on the progress achieved during India’s G20 Presidency, followed by Brazil’s Presidency in 2024 and South Africa’s Presidency in 2025. The U.S. will host the G20 in 2026.
World Bank Reforms: The U.S. is leading efforts to reshape multilateral development banks, with a focus on the World Bank. President Biden rallied G20 partners to increase the Bank’s capacity through concessional financing and operational reforms to make the bank a better and bigger institution.
Debt Relief: President Biden called on the G20 to provide meaningful debt relief to low- and middle-income countries facing economic crises. Leaders in New Delhi committed to resolving ongoing debt distress cases such as in Ghana and Sri Lanka. The U.S. is advocating for new solutions to convert unsustainable debt into transformative investments and promoting climate-resilient debt clauses.
Global Infrastructure Investment: President Biden announced the Partnership for Global Infrastructure and Investment (PGI) to develop economic corridors and scale high-quality investments, including the India-Middle East-Europe Economic Corridor.
Climate Action: The G20, which is collectively responsible for about 80% of global emissions, is committed to tripling global renewable energy capacity by 2030. They aim to peak global emissions by 2025, urging all countries to include economy-wide targets covering all greenhouse gases in their Nationally Determined Contributions (NDCs). A Global Biofuels Alliance was also launched.
Digital Transformation: At G20, President Biden urged to address the barriers to inclusive access to technologies and to shape regulatory and governance approaches to maximize benefits. Biden called for an approach that includes a commitment to responsible AI development, deployment, and use, to leverage AI to solve pressing challenges while protecting people’s rights, safety, and personal data.
