By Andrea Shalal

WASHINGTON (Reuters), – Janet Yellen from the U.S. Treasury asked the World Bank and other multilateral lending institutions to boost infrastructure investment in developing market countries. The move was part of a coordinated effort made by G7 wealth democracies to combat China’s Belt and Road project, which is estimated to cost more than a trillion dollars.

According to a Treasury Department statement, Yellen hosted a meeting of Group of Seven development and finance ministers as well as presidents of multilateral banks Tuesday in order to talk about infrastructure investment in low- or middle-income countries.

It stated that Secretary Yellen had closed the event by calling on the MDB leaders – with the support of their shareholders – to take bold and innovative steps to improve quality infrastructure. This included plans for mobilizing new capital in six months.

The G7 economies – the United States, Canada, Britain, Germany, Italy, France and Japan, plus the European Union – last year kicked off a concerted drive to narrow the $40 trillion gap in infrastructure funding https://www.reuters.com/world/g7-counter-chinas-belt-road-with-infrastructure-project-senior-us-official-2021-06-12 facing developing nations by 2035.

G7’s initiative “Build Back a Better World” (B3W), aims to mobilise private and public sector investment in climate and health. It could also be a counterweight for the Belt and Road Initiative, (BRI) that was launched in 2013 by Chinese President Xi Jinping.

Treasury announced Tuesday’s meeting featured top G7 ministers and leaders from the African Development Bank and Asian Development Bank as well as the European Bank for Reconstruction and Development and the World Bank.

“We know that infrastructure investment – when done right- drives sustained and sustainable growth … and is essential to deliver basic services to people, to keep trade flowing, and to create jobs,” Yellen told the meeting.

She encouraged participants to use public money to mobilise private capital, and she also suggested that they explore the possibility of collective action.

Chrystia Freeland, Canadian Deputy Prime Minster and Finance Minister, stated to participants that this initiative may play a critical role in encouraging social and infrastructure investments in those countries who most need them. It also ensures gender equality.

David Malpass, President of World Bank shared information about the new climate-related diagnostics tools of the bank and stated that they will encourage investments in climate-smart infrastructure to adapt and reduce greenhouse gas emissions.

Malpass has been critical of the non-disclosure agreements Chinese lenders require. He also reiterated his call for more transparency regarding debt and lending, as countries expand their infrastructure.

Yellen stated that she was looking forward to hearing new targets for private capital mobilisation from multilateral development banks and to their suggestions on expanding funding for infrastructure projects.