Our Perspectives


Infrastructure for Development: Show me the Money!

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Solar panels in GazaA Renewable energy generation project, implemented by UNDP and funded by the OPEC Fund for International Development (OFID), installed solar panels in schools and maternity clinics in Gaza. Photo: UNDP/PAPP

According to the Oxford University Said Business School, we are facing an unprecedented infrastructure mega-project investment era, amounting to 6-9 trillion US$ annually, or 8% of the global GDP. Whether it involves revamping old infrastructure, developing new sources of energy, providing access to social services and utilities to more people (with the paradigm of universal access in sight) or developing our communications infrastructure, it is easy to be in favour of more, and better, infrastructural development.

The issue is not for poor countries alone to struggle with. President Obama wants to upgrade the US roads, bridges and ports by imposing new taxes on overseas earnings by American companies. Little can be said against infrastructure as a public good. The problem is how to interest private finance in that public good.      

As the Secretary-General said in his post-2015 agenda Synthesis Report last December, “Urgent action is needed to mobilise, redirect, and unlock the transformative power of trillions of dollars of private resources to deliver on sustainable development objectives.”

Infrastructure makes life better, economies more competitive, and while being built, offers jobs to the value chain. On the other side, however, infrastructure also massively consumes cement and increases emissions. It is one of the most gender-unequal labour markets. Infrastructure entails risks of non-prior or informed consent by the populations directly affected. It has had a consistently difficult relationship with taxation, transparency, and social and environmental safeguards and norms. Infrastructure, if not well managed, can generate unmanageable sovereign debt.

The Sustainable Development Goals will most probably have a goal on infrastructure, similar to Goal 9 in the Open Working Group Outcome Document, which requires our new infrastructure to be resilient, sustainable, of superior quality, and targeted at development, human wellbeing and access to better living standards. In particular, it calls for infrastructure development in poor and vulnerable countries.

Infrastructure reconstruction in countries affected by violent crises and extreme climate events needs to remain a vector of international solidarity – keeping the “building back better” mantra in mind.

Investments in energy, water, and infrastructure that allow producers to reach the market remain the highest priority, together with social, midsize infrastructure. We need long highways and IT infrastructure, but we still need rural schools in the villages and clinics in the suburbs of our megacities.

 

Poverty reduction and inequality Development Finance Sustainable Development Goals Agenda 2030 Private sector Private sector Magdy Martínez-Solimán Sustainable development Aid

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