Our latest Talking Points publication argues for continued investment in infrastructure, despite the global financial crisis.
The worldwide financial crisis has lead to a decline in infrastructure investment by many governments in the OECD. However, the need for continuing investment in infrastructure is irrefutable. The OECD report "Infrastructure to 2030" argues for investment of more than 3% of global GDP.
The financial constraints many governments face for the foreseeable future could provide the perfect opportunity for project finance and PPPs to deliver much needed infrastructure investment. Taking this opportunity will require governments to be courageous in continuing to invest in key infrastructure to meet the needs graphically highlighted by the OECD.
In the long run, those countries that don't invest in infrastructure will find investment going into their OECD neighbours or into countries such as India, Brazil and China, whose allure is already significant. However, those governments that do will reap the benefits of higher GDP growth, improved standards of living for their citizens and higher levels of inward bound investment.