The EU’s flagship project to exert influence over the developing world is prioritising domestic business over fighting poverty, campaigners have warned.
A report issued on 9 October by Oxfam, the European Network on Debt and Development (Eurodad) and Counter Balance says the EU is too focused on commercial interests as it seeks to replicate the success of China’s Belt and Road investment scheme.
“The presence of European companies in the majority of analysed projects points to a high risk that the Global Gateway prioritises the promotion of opportunities for European businesses in the Global South over development objectives such as poverty reduction”, said the report, which analysed 40 EU projects.
Global Gateway aims to mobilise public and private funds for Africa, Latin America, Asia and the Balkans, in areas such as the digital and green transition, transport, research and education.
When it came out in 2021, the EU presented it as an answer to Beijing’s Belt and Road, a billion-euro investment in roads, ports and major infrastructure that allows China to exert geopolitical and economic influence over developing countries.
But a key business advisory group to the initiative lacks transparency, the NGOs say.
The group, a consultative body to the European Commission, is made up of 59 European companies and business associations – such as Alstom, Bayer, ENEL, Telefonica and Total Energies – “excluding companies from the south” of the globe, Alexandra Gerasimcikova, Head of Policy and Advocacy at Counter Balance, told reporters during a press conference.
According to the European Commission, between 2021 and 2023, the initiative mobilised investment of €179 billion for 225 flagship projects, €50bn of which came from the European Commission and €129bn from EU Member States, the European Investment Bank and the European Bank for Reconstruction and Development (EBRD).
In response to the report, Marlene Holzner, Head of Unit at the European Commission’s Directorate for International Partnership, said that the Global Gateway had been conceived as a “paradigm shift” in development aid, away from a system of grants that had failed to win over developing countries in the past.
“If we work with banks, we can do ten times more projects”, said the official, adding that member states pushed for the shift as they reduced development aid in favour of support to Ukraine and the defence industry.
Gerasimcikova also warned that contradictory policies behind the Global Gateway allowed commercial objectives to hide behind the mask of supporting development.
Pointing to the recent EU-Chile trade deal, “an assessment by the commission concluded that the agreement might lead to a reduction of jobs in 24 sectors, out of 31 sectors, most of them in manufacturing”, she said.
“The Global Gateway needs to be reformed ... to actually mean it provides partnerships, not just de-risking European companies and backing up companies in case they fail,” Gerasimcikova said, adding: “This is not development.”
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