Key Infrastructure Investment Programs: Assessing the Belt and Road Initiative, EU’s Global Gateway, and Infrastructure Investment and Jobs Act

Evaluating progress, criticisms, and what’s next for these critical government initiatives

From repairing existing highways and bridges to building new corridors for freight and commerce, infrastructure projects around the world are proceeding apace thanks to trillions of dollars in investments from global powers—with strings attached.

Both China and the European Union (EU), for instance, are using infrastructure funding to vie for influence across the developing world—with differing approaches. China’s massive Belt and Road Initiative (BRI) has historically eschewed more sustainable projects in favor of loans to support rapid development, though accusations of debt-trap diplomacy and human rights abuses have followed in its wake. While the EU’s Global Gateway program professes to be a more equitable and eco-focused alternative, its funding and progress pales—at least for now—in comparison to China’s decade-long effort.

The US, on the other hand, has focused investment inward with the Infrastructure Investment and Jobs Act, providing the resources to rebuild the country’s aging infrastructure across transportation, energy, and telecommunications. This year’s presidential election, however, could put the effort in jeopardy.

Here’s what to know about where each program stands and what may come next.

China’s Belt and Road Initiative

What It Is

China developed the BRI, one of the largest infrastructure projects ever conceived and a key element of its foreign policy, to create an expansive transportation and telecommunications network to support trade across continents. It has also supported large infrastructure projects in developing countries—such as the New Gwadar International Airport in Pakistan and the Jakarta-Bandung high-speed rail line in Indonesia—extending China’s diplomatic reach and influence, though progress appears to be slowing after more than a decade of investment.

Facts and Figures

• Established in 2013

• Divided between six economic corridors for trade and investment connectivity

• At least 150 countries accounting for 40 percent of global GDP are members of the BRI, with:

  • 44 in sub-Saharan Africa

  • 34 in Europe and Central Asia

  • 25 in East Asia and the Pacific

  • 22 in Latin America and the Caribbean

  • 19 in the Middle East and North Africa

  • 6 in Southeast Asia

• China has spent an estimated $1 trillion on BRI projects and could ultimately spend up to $8 trillion over the course of the initiative, according to some projections

• Projects include railroads, highways, power plants, airports, telecommunications networks, port infrastructure

Criticisms and Controversies

Exploitative practices: Critics have accused the initiative of engaging in debt-trap diplomacy, a practice that involves extending loans to impoverished countries that are likely to default, straining their economies and allowing the creditor to assume greater influence over the country. Countries most indebted to China over BRI debt—Pakistan, Kenya, Zambia, Laos, and Mongolia—are struggling to pay it back while maintaining other critical infrastructure like schools and electric grids.

Environmental harm: Projects funded by the BRI have been criticized for harming the environment through pollution and diverting critical resources like water and soil, particularly in developing countries vulnerable to climate change and environmental degradation. China is alleged to be especially lax around environmental project standards compared to their Western counterparts; and to be funding a number of coal-fired power plants and approving projects with minimal environmental impact assessments.

What’s Next?

China appears poised to shift to smaller, greener investments.

The decade of high-debt, large-scale BRI projects seems to be coming to a close, with future investments likely to involve more investment from Chinese companies to compensate for the decrease in development loans.

Case in point: Chinese loans to emerging economies from the country’s two primary trade policy banks hit a historic low during the pandemic; the size of loans has also fallen in recent years, from $534 million between 2013 and 2017 to $378 million from 2018 to 2021. Meanwhile, high interest rates over the past few years have led to China amassing considerable debts—a contributing factor to the country’s negative credit outlook.

This in part explains why Chinese officials have signaled an interest in pursuing more environmentally friendly projects on a smaller scale, putting an end to coal-burning power plants and requiring more robust environmental assessments.

European Union’s Global Gateway

What It Is

The Global Gateway program provides support for critical infrastructure projects (e.g., those involving mining, green energy, and transportation). The initiative aims to provide an alternative to China’s BRI, vowing to bring quality investments without undermining the autonomy of participating countries. The program began with a focus on Africa—for instance, through flagship projects like the AfricaConnect4 digital infrastructure initiative—though many believe it hasn’t delivered on its aims to date.

Facts and Figures

• Established in 2021

• Committed to providing up to €300 billion in funding

• Project funding is divided into three regions: Sub-Saharan Africa; Latin America and the Caribbean; and the Middle East, Asia and the Pacific

• 90 key projects have been funded around the world as of 2023

• Project partnerships focus on five areas: climate and energy, digital, education and research, health, and transport

Criticisms and Controversies

Flagging progress: Investigative reports allege that concrete progress on Global Gateway has been slow, with bureaucratic snags and a lack of clarity around how the program will be administered. EU diplomats have expressed concerns that conflicting perspectives from EU countries and agencies about how investments are allocated will further impede progress—a critical issue given that the program is almost a decade behind the BRI, with considerably less funding available.

Wavering Commitment: Critics point to a perceived lack of commitment from Europe’s major economies, which may make it difficult to promote the initiative as a true competitor to the BRI. For instance, the first “Global Gateway Summit” in October 2023 saw lower-level political representation from countries like Germany and France. A virtual gala for the initiative held in the metaverse—which cost more than €350,000—attracted just six attendees.

What’s Next?

The EU is looking to build momentum through new funding and projects.

In late 2023, the EU announced new agreements with developing countries around the world. These include hundreds of millions of euros for building sustainable supply chains for critical raw materials, renewable energy infrastructure such as wind farms and hydropower plants, railway improvements, and port infrastructure.

US Infrastructure Investment and Jobs Act

What It Is

The US Infrastructure Investment and Jobs Act (IIJA) offers substantive funding in support of transportation, telecommunications, energy, and other sustainable infrastructure investments. The package has spurred a wave of green construction and essential updates to aging infrastructure around the country, such as improvements to the Hudson Tunnel into New York City and new battery manufacturing facilities in Nevada.

Facts and Figures

• Established in 2021

• Contains $1.2 trillion in funding for projects, including $550 billion earmarked for new investments and programs to improve connectivity, promote economic growth, and create more durable and sustainable infrastructure

• Provides funding for projects involving safety, public transit, broadband, ports and waterways, airports, water infrastructure, power generation and distribution, and cybersecurity

• Has funded more than 46,000 projects since its inception

What’s Next?

The law is hitting its stride at the halfway point.

The IIJA will expire in 2026, meaning that the legislation is at roughly the halfway point. There has been considerable progress in distributing funding around the country, and agencies will award grants and funding to eligible projects through the remainder of the legislation. Funded projects are likely to extend well beyond 2026, compounding the law’s impacts, though the result of this year’s presidential election could impact the availability of additional funding.

Construction leaders gearing up to seize IIJA opportunities should consider the following:

• Grants expertise will be important: $180 billion of IIJA funds will be provided through a competitive grant process that will allot funds based on the strength of applications, rather than on metrics like population size. To receive funding, states and local governments will have to assess which programs to apply for and craft applications that demonstrate a clear vision and accountability.

• IIJA funds won’t be an immediate windfall: While competitive grantmaking is on the rise, a significant amount of funding has yet to be awarded due in part to the sheer complexity of the bill—it has over 450 unique funding categories. Because the responsibility for securing project funding falls primarily on state and local governments and agencies, construction leaders should be thinking in years, rather than months.

• Politics could impact project funding: Construction companies will have to stay abreast of the evolving political landscape. The outcome of this year’s presidential election could reshape how federal, state, and local governments cooperate.