Joe Biden heads to India this week with a rare task

President Joe Biden heads to India this week with a rare task for U.S. leaders — courting the developing world.

Biden’s trip to the G20 meetings in New Delhi marks the most concerted effort by the United States in decades to win the favor of so-called developing nations — more than 70 countries, concentrated in the Southern Hemisphere, with high debt burdens and poverty levels.

‘Bidenomics’ is going global. The world is skeptical.
At the G20 meeting, the administration will unveil its plans to counter growing Chinese influence with a new approach to economic development that prioritizes climate action and inclusive growth. But countries burned by decades of Western-imposed austerity aren’t convinced.

Those nations, long neglected by Washington, are critical to Biden’s economic agenda. He’ll need to increase trade with many of them — from Bolivia to Indonesia and the Democratic Republic of the Congo — to secure the raw materials and components needed for his domestic manufacturing renaissance. And he will need their buy-in for his campaign to rewrite the rules of the global economy to encourage fair trade between democracies, and penalize China’s state-led industries.

Biden’s plan is to buy them off. The administration says the U.S. and other Western nations — not to mention their financial institutions — need to boost their financing of infrastructure projects in the developing world. That, they hope, will provide a down payment to keep those nations from floating further toward Beijing’s orbit, even in the absence of traditional trade negotiations that Biden has eschewed since taking office.

The administration “is seeking to enhance its value proposition” to developing nations, national security adviser Jake Sullivan told reporters during an August preview of the G20 trip, “broadly through investments in the kinds of things that these countries are looking for,” like roads, ports and clean energy infrastructure.

That investment-first strategy marks a dramatic shift from decades of U.S. economic policy that largely focused on removing tariffs and other trade barriers in hopes that private U.S. companies would rush in and industrialize poorer nations. That was the broad thinking behind the establishment of the World Trade Organization at the turn of the century, but administration officials say that agenda has now run its course.

“We don’t see tariffs as being at the core of trade policy. We don’t see trade policy as being at the core of international economic policy,” deputy national security advisor for International Economic Affairs Mike Pyle said at a late June appearance at the Carnegie Endowment. “Just as the agenda with other industrial economies begins with investment, so too the agenda for the developing world begins with investment.”

It’s a playbook Beijing has already pursued for more than a decade. China has pumped a trillion dollars into infrastructure and development projects in over 130 nations around the world in its Belt and Road Initiative — building not just ports and bridges, but goodwill among many nations.

“We start at a significant deficit” compared to China, said former Biden NSC international economics lead Peter Harrell. “The U.S. government for many years has not really had a sustained focus” on developing nations.

That situation has national security officials terrified that many world nations will side with Beijing in everyday trade and in times of crisis — like any future conflict in the Taiwan Strait. The refusal of many developing countries to take Ukraine’s side after Russia’s invasion has only heightened those fears.

“Seeing that lack of support for Ukraine and lack of opposition to Russia in [developing nations] has really crystallized in the administration’s minds on the need to be out there quite aggressively, working to build relationships,” said Harrell, who served on the NSC during the start of Russia’s war, before stepping down last fall.

Quesada

2023-09-08 18:00:50 UTC by Dyana Hansen in Quesada

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