Politics is hindering infrastructure investmentby Paola Subacchi / May 22, 2014 / Leave a comment
Published in June 2014 issue of Prospect Magazine
To promote and support infrastructure, policymakers need to set up a framework that allows the public and private sectors to work together on big projects © Paul Waite
This article is the second part of our special report on infrastructure. Click here to read the first article in the series, “the money’s not the problem.” Click here to read the third article in the series, “building bridges.”
Having been long neglected, investing in infrastructure is back on the policy agenda. It is featuring prominently in debates ahead of this year’s G20 in Australia, and is seen as a way to unlock the potential of many developing countries. Institutional investors and pension funds tend to favour long-term projects, such as infrastructure, because of their potential to generate a steady revenue stream over several years—essential to meet pensions providers’ long-term liabilities. Is there a way to unlock this money and meet the demand for building new infrastructure and maintaining existing ones while, at the same time, supporting economic growth?
Infrastructure projects are necessary not only to a country’s long-term development but also to modernise its economy. Up-to-date, well-maintained and efficient infrastructure—from transport to communication networks—increases productivity and improves the standard of living. Building and maintaining infrastructure also has an impact on economic growth…