This Policy Paperanalyses the EU’s Global Gateway initiative. Since this is a youthful programme still undergoing construction, the purpose of the exercise is to put forward recommendations for a design and execution geared towards its (1) geostrategic potential and (2) its impact on development, its ability to generate (3) innovative financing and (4) a greater and tighter coherence in initiatives and coordination among its stakeholders. To this end, its challenges and opportunities are explored in these four dimensions, both for the initiative in general and for official Spanish aid policy and the Spanish private sector. These same challenges and opportunities are also viewed through the lens of two specific projects in the fields of climate transition (a hydrogen project in Chile) and digital connectivity (the BELLA programme).
The challenges lying in the way of Global Gateway’s success are manifold and of various kinds. Just three examples are: (1) striking the perennially delicate balance between impact on development and the profitability needed for the intervention of the private sector; (2) managing strictly rules-based but slow processes in the EU institutions; and (3) incorporating partner countries’ development priorities more broadly and effectively.
The Global Gateway is thus destined to transform European development aid and with it, at least partly, that of its member states.
This joint paper, which benefits from the input of an already extensive literature on the project and the opinions of some 20 interviewees, enables a series of recommendations to be put forward, compiled at the end of the document. These recommendations revolve firstly around the governance of the strategy, referring to possible improvements in its flexibility, its intermediate decision-making levels, the clarity and transparency of its processes (including those related to the participation of its various stakeholders), and the need to coordinate and bear in mind other initiatives that could overlap with this one (both European and external), and the balance between flexibility and guarantees in the execution process.
Secondly, with the initiative’s impact on development in mind, greater alignment is recommended with the EU’s development priorities, in particular the social objectives, something that also has a bearing upon private participation, such that it features transparent evaluation mechanisms and ways of involving the local private sector, thereby fostering the EU’s image as an all-round donor.
Thirdly, greater involvement on the part of the member states is recommended, using –for instance– contact rounds and the formalisation of processes, on the part of partner countries and other stakeholders such as civil society organisations.
Lastly, it is recommended that communication surrounding the initiative is improved, bringing efforts into line with perceived shortcomings and favouring a narrative that is realistic regarding the tool’s potential, emphasising its collaborative –rather than competitive or reactive– character compared with other global players such as China.
The EU spends almost €70 billion annually on aid to some 150 developing countries, which accounts for around half of the OECD’s official development assistance (ODA) and makes the Union the largest donor worldwide.
Despite the crises of recent decades, the aid given by traditional donors (or the OECD) has kept up a steady rate of growth, surpassing historical records every year. Added to this are the redoubled efforts of the (misnamed) emerging donors, notably China.
In parallel, the global development agenda has shifted from a rather technical and technocratic perspective on development aid, focused on achieving a series of local-level social goals (specified in the Aid Effectiveness Agenda and in the Millennium Development Goals) to another, broader perspective that acknowledges the challenges of development in all their breadth and complexity, expanding their scope to the economic, climate, environmental, political, institutional and security dimensions (all of which are given explicit manifestation in Agenda 2030).
Thus, both traditional and emerging development aid are increasing while the challenges and goals of development are multiplying. The necessity of supplying a development financing agenda that transitions ‘from billions to trillions’ is giving way to the creation and strengthening of mechanisms and instruments that increase public (refundable aid, blending) and private development funding (guarantees, public-private partnerships for sustainable development).
Development aid and cooperation form the flagship of the EU’s external projection, which, governed as it is by a self-styled ‘Geopolitical Commission’, puts in place a series of processes geared firstly towards the de facto ‘communitisation’ of European aid (the disappearance of non-budgetary tools such as the EDF, the creation of NDICI-Global Europe, Team Europe, delegated cooperation) and secondly towards increasing the scale, thematic (digital, climate, transport, education, health and research) and strategic scope (partly in response to China’s BRI) of development initiatives, something that the Global Gateway initiative is turning into reality.
The Global Gateway strategy has been criticised for its lack of ambition, in the sense that it is largely limited to repackaging pre-existing initiatives. However, if it is possible with a mere ‘repackaging’ to lend internal coherence and strategy to an official development assistance programme that, for example, is 10 times greater than its Chinese equivalent, the impact in terms of development and the EU’s external influence may be considerable. Moreover, this initiative relies on the new European NDICI-Global Europe instrument, which already represents a significant change with regard to the ambition of European cooperation policy.
The Global Gateway is thus destined to transform European development aid and with it, at least partly, that of its member states, bearing in mind moreover its potential ‘communitisation’ effect. The implications for the Spanish private sector and for the Spanish aid programme are manifold, in as much as it affects their financial cooperation tool and the private sector’s ways of participating in development initiatives, this coming at a critical time in the reform of development cooperation.
The following section describes the Global Gateway initiative in the context of European aid undergoing transformation and as a response to the China’s BRI. The second section reviews the challenges and opportunities of the Global Gateway in terms of its impact on development, geostrategic potential, capacity for financial innovation and the EU’s internal coherence and coordination. The third section places the focus on the same challenges and opportunities for the specific cases of an energy transition project (hydrogen in Chile) and a digital connectivity project (Bella). The last section offers a series of recommendations relating to the governance of the strategy, its impact on development, its ownership by all the stakeholders and its communication efforts.
What is the Global Gateway?
The EU’s development cooperation
Recent years have seen a tendency towards the integration and geopoliticisation of European development cooperation, with development objectives gradually being incorporated into other foreign policy objectives (Olivié & Santillán, 2021). This approach thereby converges with the one adopted by other development actors, and it aligns with some member states’ cooperation activities more than others, such as the financial cooperation of France and Germany. This evolution, reflected by the breadth of the various objectives included in the 2017 New Development Consensus, is particularly evident in the adoption in 2021 of Global Europe and the Neighbourhood, Development and International Cooperation Instrument (NDICI) (ibid).
This instrument, responsible for financing and executing the EU’s development activities over the 2021-27 financial cycle, absorbs the mandates of various previous instruments into a single tool. These include, among others, the European Development Fund, aimed at countries in Africa, the Caribbean and Pacific (ACP) and Overseas Countries and Territories (OCTs), which had the exceptional characteristic of being financed outside the budget (now something that only applies to the OCTs); the European Neighbourhood Instrument; the Financing Instrument for Development Cooperation, which channels aid towards Asia, Central Asia, the Middle East, Latin America and South Africa; and the Instrument contributing to Stability and Peace (European Commission, 2018).
The Global Europe-NDICI instrument additionally has a European Fund for Sustainable Development Plus (EFSD+), successor to the European Fund for Sustainable Development (EFSD), which provides financial support to development investments throughout the world. Lastly, the EFSD+ is accompanied by an External Action Guarantee, which absorbs the European Investment Bank’s external loans mandate (ibid).
The unification of all these instruments into Global Europe-NDICI gives this new instrument a much broader geographical and thematic outlook, as well as a mandate that exceeds the traditional development objectives, such as the eradication of poverty, and includes geopolitical and security notions such as stability and peace (European Parliament and Council, 2021). As well as in the breadth of objectives, the geopolitical focus of European cooperation is reflected in the weight that the Neighbourhood acquires in this context. The NDICI regulations include a series of specific provisions for neighbourhood issues, which include controlling migratory flows and the earmarking of relatively considerable funds to this issue (€19 billion, the second highest amount after the €29 billion assigned to the whole of Sub-Saharan Africa) (ibid).
A final manifestation of the integration and geopoliticisation of aid is in its financing. With the Global Europe-NDICI instrument also absorbing the former EDF, European development cooperation is now financed entirely be EU budgets, thereby assigning a greater role to the European Commission (dubbed the ‘Geopolitical Commission’ by President von der Leyen) (Olivié & Santillán, 2021) and, to a certain extent, to the European Parliament (Burni et al., 2021). Moreover, its €79.5 billion (European Parliament and Council, 2021) exceeds the total sums assigned to the previous instruments, despite not including the UK’s contribution, indicating the growing importance being placed on the EU’s external projection.
At the same time, efforts to make the EU’s external and development action more coherent and integrated (especially in the wake of the need to join forces in response to the COVID-19 pandemic) led to the adoption in 2020 of the so-called Team Europe approach to European cooperation (European Commission, nd-b). This is an attempt to enhance the EU’s visibility in the world as an actor, if not as monolithic, then with internal coherence and with closer and more effective collaboration among its members, and to present itself as such to its external partners (ibid).
Thus the recent evolution of the EU’s development cooperation policy encompasses the latter and the rest of European foreign policy within a single vision and strategy, thereby combining their objectives, stakeholders, power dynamics and impact.
In this geostrategic context, accentuated moreover by the impact of the pandemic on development and the mere seven years that remain until 2030 –the deadline for meeting the Sustainable Development Goals– the Global Gateway initiative has emerged. It was announced by the President of the European Commission, Ursula Von der Leyen, in September 2021 as a tool for responding to the need for ‘sustainable and trusted connections that work for people and the planet’ (European Commission, 2021b). In other words, the Global Gateway seeks to promote the EU’s external action in the areas of connectivity and infrastructure, and seeks to attain this objective by mobilising an investment of €300 billion in the digital, climate and energy, transport, health, education and research sectors (ibid).
It is important to emphasise that the Global Gateway is an exercise for boosting the visibility, image and coherence of the EU’s external action through its international cooperation, which is presented as a ‘positive offer’ for its partners on the grounds that it carries a series of advantages such as its sustainability and its regulatory focus (European Commission, 2021a). In line with this focus, the initiative will officially rest on six principles: democratic values and high standards; good governance and transparency; equal partnerships; green and clean; security focused; and catalysing private sector investment (European Commission, 2021b).
With this, according to von der Leyen herself, the EU aspires to underpin its role in the world order, thereby responding to the rise in the worldwide presence of China especially in sectors related to infrastructure and digital connections, as will transpire in what follows (Pandita, 2023). Therefore, the Global Gateway initiative does not entail a new package of financing but rather clarifies, unifies and coordinates European external action, financed by means of already-existing funds and instruments, using a Team Europe approach (European Commission, 2022b).
The mobilisation of resources that has been announced thus refers to funds that will come first from the Global Europe-NDICI instrument and its EFSD+ and External Action Guarantee. In addition, financing is envisaged from other instruments such as the Instrument for Pre-Accession Assistance III, Interreg, InvestEU and Horizon Europe, as well as those funds that each member state’s cooperation can mobilise through combined financing (ibid). Lastly, the possible creation of a European Export Credit Agency is also being contemplated to boost the competitiveness of European companies in partner countries (Szczepański, 2023), although for now there has been no tangible progress on this proposal.
At all events, getting the strategy under way has been a slow affair. Initially it was decided to include a series of European projects in Global Gateway that would serve as flagbearers and foster the EU’s visibility on the ground and in the eyes of its partners. This first selection includes projects such as the Medusa fibre optic cable for connecting Europe and North Africa, the extension of the BELLA fibre optic cable between Europe and Central America and the Caribbean, the Trans-Balkan Electricity Corridor in eastern Europe, the green hydrogen and critical raw materials partnerships with Namibia and Kazakhstan and the green hydrogen partnership with Egypt, among others (Guerrero, 2022); more projects were subsequently added to this selection (Grupo Spri, 2023).
The Global Gateway and the Belt and Road Initiative
When it was announced in 2013, the Belt and Road Initiative (BRI) reflected various Chinese interests, notably the search for new markets for sectors with obvious overcapacity, such as construction, and enhancing its geopolitical and regulatory influence. Its rapid spread, covering virtually the entire planet, despite having originally been conceived for Eurasia, is due to the fact that there was an enormous demand for infrastructure financing that was not being satisfied by traditional actors.
The BRI has been in decline since a flurry of investments and diplomatic activity in 2016-2017, coinciding with the first Belt and Road Forum for International Cooperation. After a second forum in 2019 and the emergence of COVID-19, China’s political leadership has downgraded its visibility, as is evident from the drastically reduced mentions in Xi Jinping’s speeches (Chen, 2022), and the downgrading of the biennial forum in 2021 to a ministerial-level meeting. With its initial impetus having passed, the BRI has stalled and it remains to be seen whether a third forum to be held in 2023, on its 10th anniversary, will lend any fresh impetus. The size of an eventual resuscitation of the BRI appears limited because the appetite for the initiative, both inside and outside China, has waned.
Partner countries with memoranda of understanding on the BRI have been left disappointed, and they face debt problems accentuated by the COVID crisis. This is linked to regulatory problems with the initiative, such as its lack of transparency. Notable too is the traditionally semi- or non-concessional Chinese approach –accounting for 81% of its development financing prior to 2017 (Malik et al., 2021, p. 13)– and the ratio of loans to donations (the former outweighing the latter by factors of up to 31 to 1), and the fact that Chinese projects have significantly contributed to the foreign debt of countries such as Djibouti, Angola, Laos, the Maldives, Mongolia (Buchholz, 2023), and Montenegro (Hurley et al., 2018, p. 18). It has also been evident how the resistance of local communities can scupper projects that do not fulfil the appropriate regulatory or social and environmental sustainability standards, witness among others the legal suspension –followed by a permanent cancellation– of the first coal-fired power plant in Kenya (Yi, 2021) with more than US$1 billion of Chinese financing. More generally, it is estimated that up to 2021, 35% of projects in the BRI portfolio (Malik et al., 2021, p. 13) faced serious implementation problems, including public protests, corruption scandals, breaches of employment law and environmental problems; these are problems that, as will be set out below, the Global Gateway should be sure to avoid. Moreover, many of these projects have been of doubtful profitability for China, where the authorities have become less keen to finance grand infrastructure projects and more assiduous about managing the economic and reputational risks arising when they fail. This has led to a plethora of official strategies being published geared towards transforming the BRI into a more sustainable initiative with projects of higher quality. The Chinese authorities also believe that we are facing an international context of growing geopolitical risk, which is inconducive to investments in large infrastructure projects and requires the prioritising of greater industrial and technological autonomy on the part of China.
A clear example of the reduced level of ambition in infrastructure projects financed by China is the Brazil-Bolivia-Peru Bi-Oceanic Corridor. This grandiose project is now viewed from a more modest perspective, focused on the gradual development of infrastructure at the national level whenever possible, and postponing intra-regional connectivity to a time when more favourable political circumstances may prevail. The South American case highlights the limits of a vertical approach –based on agreements with central governments– when it comes to implementing projects, given the difficulty of striking an agreement with all the interested parties, including sub-national governments and local communities (Gong, 2023). The emphasis of the BRI has shifted from traditional large infrastructure towards small projects or projects linked to the digital and green transitions, and from loans to investments. This shift is not unrelated to the pressure of international norms and standards and also reflects the influence of recipient countries. Cases involving the cancellation of mega-projects (Berger, 2018), as in Malaysia (Zainuddin, 2021), or the renegotiation of debts and guarantees (Griffin, 2022), as in Ecuador (de la Torre et al., 2022), suggest a willingness on the side of partner countries to redefine asymmetrical relations with China, while simultaneously offering the latter the chance of resetting the way its projects are undertaken.
Meanwhile, in September 2021 China launched its Global Development Initiative (GDI) to bolster its international profile as a provider of development aid. Although it remains to be finalised, this new initiative is already supported by more than 60 countries within the framework of the Group of Friends of the GDI at the United Nations (Ministry of Foreign Affairs of the People’s Republic of China, 2022). This has been launched in parallel and as a complementary initiative to the BRI; while the latter has a more market-oriented approach in which private participation is foremost, the GDI is closer to the ‘traditional’ focus on development cooperation (Mulakala, 2022). Financially, the GDI is financed with aid funds through the China International Development Cooperation Agency (CIDCA) and from Chinese contributions to international programmes and initiatives (Ha, 2023). Thematically, its eight cooperation priorities are: mitigation of poverty, food security, response to COVID-19 and vaccines, financing for development, climate change and ecological development, industrialisation, the digital economy and connectivity (Permanent Mission of the People’s Republic of China to the UN, 2022).
In any event, and despite the fact that China takes part in the G20’s common framework for debt treatment (Wei, 2022), significant contrasts continue to exist between the EU and China in this field. A clear example is the lack of transparency in Chinese development financing. It is estimated that unreported Chinese debt in low- and medium-income countries under the World Bank Debtor Reporting System has reached US$385 billion (Malik et al., 2021, p. 57), almost half the debt officially registered under that system. The BRI will also continue to diverge from European development financing if the European intention to finance only projects compatible with global warming limited to 1.5 degrees becomes reality (GIZ, 2022, p. 2), which excludes the possibility of any investment in fossil fuels (Evans, 2022). Although the investment in renewables has increased in absolute and relative terms, fossil fuels still constitute more than half of the total contracts and investment volumes in energy under the Chinese initiative (Wang, 2023). Moreover, despite the ban on financing coal-fired plants outside China, imposed in 2021 (Wang, 2022, p. 13), the participation of Chinese companies and possible Chinese financial and technical support for projects involving coalmines and coal-fired plants was observed in 2022. More significant still is that, through the GDI, China underpins its adoption of a proactive stance to legitimise a model of development that is decoupled from governance and from individual, civil and political rights (Lemoine & Gaafar, 2022). In this context the launch of the EU’s Global Gateway has been overwhelmingly reactive to the geopolitical and regulatory challenges that the BRI represents and the concern it causes in terms of sustainability, including the participating countries’ level of indebtedness. This concern is shared by the EU’s partners, which have launched similar initiatives such as Build Back Betterand with which bilateral and mini-lateral platforms have been set up such as the Partnership for Global Infrastructure and Investment or the EU-Japan Partnership on Sustainable Connectivity and Quality Infrastructure (Esteban & Armanini, 2020). With more than US$1 trillion in payment commitments, the BRI will remain the largest connectivity initiative, but its current flows of new financing, set at around US$60-70 billion per annum (Wang, 2022, p. 5; Wang, 2023, p. 5), are similar to the value of European development aid. Moreover, the Global Gateway could benefit from a competitive advantage by mobilising more private capital, because its technical cooperation allows, among many other things, the key attraction of capital in the planning stage of projects; and by incorporating the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD) as well as national development banks.
 Prior to the pandemic, data from the American Enterprise Institute suggested that the BRI had accumulated up to US$100 of dubious assets (one quarter of the world total since 2005) (OECD, 2018, p. 29). This is combined with an explosion, 60% of their portfolio of international loans (Lu, 2023), in countries with debt crises in 2022, and more than US$200 billion in financial bailouts since 2016 –a fifth of the total payment commitments of the BRI (Douglas, 2023)–.
 These include: Vision and Actions on Jointly Building Silk Road Economic Belt and 21st Century Maritime Silk Road (2015), Green Development Directives for Overseas Investment and Cooperation (2020), and the Guidelines for the Ecological Environmental Protection of Foreign Investment Cooperation and Construction Projects (2022). This is combined with the foreign investment target of the 14th Five-Year Plan being 25% lower than the preceding period (2016-20) (Wang, 2022, p. 21).
 The last three areas overlap with the BRI’s sphere of activity.
 In Indonesia (Wang, 2023, p. 13), the China Energy Engineering Corporation won the tender to build a 1.5 GW power plant on the island of Obira, while the Power Construction Corporation will be involved in a mining project in the province of Central Borneo. In Pakistan, financial and technical support is expected for the construction of coal-fired plants in Gwadar.
Image: The “Global Gateway” inscription on a smartphone screen. Photo: Dati Bendo – EC Audiovisual Services / ©European Union, 2023.