Global Gateway and Belt and Road Initiative in Southeast Asia

Key takeaways:

In 2021, the European Union launched its Global Gateway project, committing it to mobilize up to €300 billion of investments between 2021 and 2027 to help tackle issues from “fighting climate change to improving health systems and boosting competitiveness and security of global supply chains.” In January 2024, it released its strategy for the EU-ASEAN Global Gateway, a scheme to invest €10 billion in the region by 2027. The focus is on green transition, sustainable connectivity, and cooperation in protecting intellectual property rights and higher education. While these are mostly region-wide efforts, some bilateral projects are also being developed as part of the Global Gateway, such as the Philippines Digital Economy Package (including the expansion of the Copernicus project in Southeast Asia) and the Lao National Road 2. Both focus on disaster risk preparedness and sustainable and resilient transport. However, amid all of this, the EU has to contend with the presence of another superpower—China—and, indeed, with Beijing’s Belt and Road Initiative (BRI), China’s vast infrastructure fund. In Southeast Asia, the BRI meant the opportunity to finally invest in major infrastructure projects that the countries did not have the means for. In many countries, this allowed for the strengthening of the transport infrastructure, with the Jakarta-Bandung High Speed Rail in Indonesia and the Boten-Vientiane railway in Laos. 

While the Global Gateway provides an alternative investment opportunity for Southeast Asia, the EU must reconcile its role with that of China and the BRI. Indeed, the new EU Commission recognizes that China is increasingly a geopolitical challenge for the EU, and the narrative is growing that the Global Gateway is a “better option” for funding compared to the BRI. Yet, can Europe provide the investment Southeast Asia needs, let alone provide a better alternative to the BRI? 

Belt and Road Initiative and environmental issues

According to a recent study by Carnegie China, which measured country-specific attitudes and responses to different projects, Southeast Asia is not homogeneous in their views of China and the BRI. Some countries, like Thailand, initially favored the initiative but have become more worried about the BRI being used by Beijing as a “debt trap.” In the Philippines, meanwhile, the BRI was not seen as crucial for economic growth and, in fact, was blamed for introducing illicit Chinese capital into the country, mainly funneled through the gambling business. The impact of the BRI was regarded very positively in Indonesia, although there are now fears similar to those in Thailand, according to another study.

A notable example of a BRI project that has seen lots of controversies due to its environmental impact is that of the hydropower project in the Batang Toru rainforest in Indonesia. This project was legally challenged because of the predicted negative environmental impact and, for this very reason, lost the support of the World Bank for funding, It nonetheless proceeded with the support of the Bank of China and a Chinese state-owned insurer (Sinosure), contributing to what are recurring episodes of environmental and biodiversity destruction in the region. 

Global Gateway’s response: promoting green projects

Although it was inevitable that the Global Gateway would be compared to the BRI, given its scale and scope, it is distinct because it is described as being guided by a “European way.” That can mean many things, but several pillars frame the vision: transparency, promoting good governance, and improving human rights (in which Europe attempts to be a global leader). A . E environmental protection and sustainability are also at the heart of the vision with a focus on digitalization more apparent in the recent year.

For now, though, Southeast Asia does not appear to be convinced by the EU’s offer. While it’s recognized as a crucial trading partner and an important third party in the US-China competition, Southeast Asian elites have a diminishing belief that the EU will “do the right thing” internationally, according to the annual State of Southeast Asia surveys. This is exemplified by trade disputes with ASEAN countries – specifically Indonesia and Malaysia. Overall, the EU might need to concretely understand what countries in the region can comply with at a regulatory level instead of imposing standards in trade and production of goods  that are “unilateral and unrealistic” for the region, and that contribute heavily to the belief that the European leaders do not understand how to have a mutually beneficial partnership. 

With a new lineup in the European Commission confirmed in November, the EU can improve the Global Gateway, which some see as having achieved little—and, indeed, very little compared with the BRI. To do this, Brussels must rebuild trust while focusing on environmental issues. 

Engaging with each other and engaging with the region

In 2021, China announced that it would halt all planned investments in coal-fired energy and focus instead on renewables. Two years later, Beijing announced that it would promote “smaller, greener and more beautiful” initiatives under the guise of “greening” the BRI. Beijing’s environmental shift has repercussions for how the EU frames the Global Gateway. Indeed, the EU may not be able to compete with a BRI that prioritizes stronger environmental goals, yet it can complement it by pumping even more money into the region’s sustainable causes and ensuring that the BRI is not the only option for countries trying to find resources for their infrastructure projects. 

Additionally, while some may claim that the Global Gateway is simply not doing or investing enough to rival the BRI, research by Bruegel, a think tank, shows that the EU is possibly correct in not investing “fresh” money—producing new capital for the region—but is reshaping existing projects in Southeast Asia to make them more coherent under the Global Gateway banner and is concretizing its vision in a way that is more structured and driven. 

Gaining more trust is key. It is crucial for the EU to settle trade disputes with countries in the region. The WTO has now ruled in favor of the EU in the palm oil dispute brought to the international organization by Malaysia, yet trade disputes with Indonesia over the same issue are ongoing despite talks progressing over a free trade agreement. Showcasing that Europe is willing to meet Southeast Asia in the middle, supporting them with green solutions instead of bringing forward more disputes is crucial. That being said, Europe needs to be careful to not repeat “messianic” attitudes and avoid being seen as replicating past colonial practices. There is a lot of potential for the two regions to engage: as building upon the shared values of multilateralism and rule-based order  are essential building blocks for a successful partnership and GG can underpin them.

The post Global Gateway and Belt and Road Initiative in Southeast Asia appeared first on CEIAS.