ROMA – The new EU strategy for investment and global development, the Global Gateway (the program to develop infrastructure in low-income countries in response to New Chinese Silk Road) risks diverting a large part of the resources of European citizens, intended for development aid to the poorest countries, towards large companies.
Over 60% of projects benefit companies. The one reporting it is a new report Of OXFAM, Counter Balance e Eurodadwhich finds that over 60% of the projects examined will benefit at least one European company. In fact, out of 40 projects examined, 25 will support European companies such as Siemens, Moller Group or Suez. While only 16% of all projects in the Global Gateway it will bring investments in key sectors for the development of poor countries such as health, education and research. Furthermore, at least seven companies that are part of the Global Gateway Business Advisory Group – the group of experts established by the European Commission – have signed contracts financed with funds from the Global Gateway.
Geopolitical and economic interests prevail over the fight against poverty. Since the main source of financing of the Global Gateway is the community budget for development aid, which should be used first of all for the “reduction and elimination of poverty in the long term, there is a concrete risk – says Francesco Petrelli, spokesperson and political consultant on development finance OXFAM Italy – that the EU aid budget be allocated, in the multiannual financial framework ’21-’27, more to the defense of European geopolitical and economic interests than to the fight against poverty and the promotion of sustainable development”.
Attention to corporate profits. On this road the Global Gateway it would end up fueling corporate profits with European taxpayers’ money. The EU aid budget does not have this objective. For this reason, the European Union must ensure that the political objectives stated in all the documents approved by the Commission and Parliament are not distorted. Thus private interests are favored, in a context of lack of transparency, to the detriment of both the European taxpayer and local populations, bringing to light serious risks of colossal conflicts of interest.
The idea of increasing EU trade in the Global South prevails. “We looked at dozens of projects – added Alexandra Gerasimcikova, head of policy and advocacy at Counter Balance – finding that the projects Global Gateway are implemented to increase EU trade activities in the Global South, despite the serious social, economic and environmental risks this entails. The high standards the Commission claims to offer the rest of the world often fall short.”
The opacities of the Global Gateway. The research also highlights the opacity of the strategy Global Gateway. For example, there is a lack of public information on projects, financing, contracts or evaluations regarding the protection of human rights and the environment. This makes it difficult to determine to what extent the Global Gateway contributes to sustainable development. “The investment program is largely financed from the EU aid budget: the public has the right to know what these resources are spent on. – underlines Farwa Sial, political advisor at Eurodad – yet, when we tried to investigate the projects, we found an extremely worrying lack of information. We fear that what we have managed to discover and analyze is only the tip of the iceberg.”
Inequalities are increasing and the debt crisis is worsening. Il Global Gateway it also risks increasing inequalities in many fragile countries. In Peru, one of the projects identified encourages the poorest families to take out mortgages for the purchase of agricultural properties, paying a substantial down payment. With the risk of putting them into debt and pushing them even further into poverty. The European strategy also risks exacerbating the debt crisis in several countries.
Projects in 29 of 37 countries. The EU will in fact launch Global Gateway projects in 29 of the 37 most indebted poor countries in the world. These projects favor loans over grants, reducing governments’ ability to meet the needs of the population as they have to repay debt and interest to European financial institutions.
The approach to Latin America. “The approach of Global Gateway towards Latin America, for example, it risks diverting resources intended for the development of the poorest communities vulnerable to climate change to pay for the so-called green transition of the European Union. – concludes Petrelli -. And this happens in one of the most unequal regions in the world. Instead, Europe should listen to the voices of those fighting for a truly fair green transition.”
Negative impacts on the environment. The research also highlights the potential negative impacts of Global Gateway on the planet. Three of the 13 projects analyzed involving the production of hydrogen derived from the use of large quantities of water will be carried out in countries such as Namibia, Chile and South Africa, where this vital resource is in short supply. At the same time, fossil fuel companies such as Total Energies and Enel are members of the Global Gateway Business Advisory Group.
The absence of controls and the risk of increasing conflicts. Finally, there is the risk that some projects aggravate existing crises and conflicts. In Rwanda, the EU has planned a deal for a hydroelectric power project that risks forcing at least 4,500 people from their homes and impacting crops. Another agreement with Rwanda provides for the extraction of raw materials, despite accusations that this fuels the ongoing conflict.
A truly bleak picture. “The picture is truly bleak and derives from the lack of democratic controls and representation on the part of partner countries and civil society. – concludes Petrelli – While the interests of European companies are at the center of the decision-making process through the Business Advisory Group of the EU, the role of partner countries, the European Parliament and civil society has been relegated to that of testimonials”.
Details to know.
1 – In 25 of the 40 projects analyzed (60%) at least one European company benefited from a project Global Gateway. These include large companies such as Siemens, AP Moller Group and Suez.
2 – Il Global Gateway launched 225 projects between 2023 and 2024. The majority of projects concern climate and energy (49%), followed by transport (22%) and the digital sector (13%). Education and healthcare received less attention (7% and 9%).
3 – Il Business Advisory Group of the Global Gateway is made up of 59 large companies and business associations, mainly European. The seven companies in this group that have benefited from Global Gateway projects are Moller Maersk, Enel, Meridiam, Orange, Nokia, Total Energies and Siemens.
4 – One of the founding documents of the EU, the Treaty on the Functioning of the European Unionin Article 208, states that “the Union’s development cooperation policy shall have as its primary objective the reduction and, in the long term, the elimination of poverty”.
5 – Il Neighbourhood, Development and International Cooperation Instrument – Global Europe (NDICI – Global Europe) it is the EU aid budget. It has a total budget of 79.5 billion euros to cover EU cooperation with third countries.
6 – The data ofWRI Aqueduct Water Risk Atlas show that 25 countries, including Namibia, Chile and South Africa, face extremely high water stress every year, regularly consuming almost all available water supplies.
7 – The World Bank lists the Heavily indebted poor countries (HIPC). According to estimates by the African Development Bank, the Ruzizi III regional hydroelectric plan project in Rwanda and Congo will force the resettlement of 4,500 people and will affect properties such as land, crops and orchards.
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