What happened?

On 28 June, the G7 leaders from Canada, France, Germany, Italy, Japan, the UK, and the US concluded their three-day summit in Germany's Bavarian Alps. Germany, the host, also invited the leaders from India, Indonesia, South Africa, Senegal, and Argentina. Representation from the EU, UN, WTO and IMF also took part in the summit. The agenda included: global economy, sustainable planet, energy security, climate, economy, food security, health, counter-terrorism, and gender equality. 

On 28 June, the leaders announced the Partnership for Global Infrastructure and Investment (PGII). The communique released by the G7 said: "Through our Partnership for Global Infrastructure and Investment, we aim to mobilize USD 600 billion over the next five years to narrow the global investment gap. We will step up our cooperation globally, including through working towards new Just Energy Transition Partnerships with Indonesia, India, Senegal and Vietnam, building on our existing partnership with South Africa."

What is the background?

First, the focus on Ukraine. The G7 was to discuss developmental projects, but the Ukraine war dominated it. The summit coincided with Russia's bombing of Kyiv. The support from G7 amounts to USD 2.8 billion in humanitarian assistance and USD 29.5 billion in financial aid.  

Second, the China focus. The economic initiative of the Build Back Better World (B3W) was announced by the US at the G7 summit in June 2021. It was designed to provide an alternative to China's Belt and Road Initiative (BRI) for the G7-backed infrastructure development of low- and middle-income countries. 

Third, the climate and energy crisis. The G7 Ministers of Climate, Energy and the Environment met on 26–27 May 2022 in Berlin. Given the climate crisis, and the continued failure to adhere to the Paris Agreement and limit the global temperature increase to 1.5°C above pre-industrial levels, the G7 was looking to take concrete steps on managing the climate crisis. Russia's war on Ukraine has worsened the energy security globally. Ahead of the summit, Germany’s chancellor Olaf Scholz said moving away from fossil fuels was of great importance given Russia’s fossil-fuel-funded war.

What does it mean?

First, the growing divide between Russia, China and the West. The summit reaffirmed their strong stance against Russia. Second, nod to the global south. Just Energy Transition Partnerships in already under progress in South Africa and will be extended to Indonesia, India, Senegal, Vietnam. This signals the G7's new focus on the Global South as an important economic partner. It also is a step to increase the group's sphere of influence across a region beyond the member countries. Third, concerns about China. The communique attempts to challenge China by the members referring to the human rights violations in Tibet and Xinjiang while also rejecting the country's claims in the South China Sea.