The task of preparing a viable, feasible, and sustainable infrastructure project can be a daunting one filled with many challenges. Throw in the need to incorporate an element of connectivity and the challenges only multiply in number and complexity. Indeed, during the annual meeting of the Global Infrastructure Connectivity Alliance (GICA), held in January 2018 at the OECD headquarters in Paris, GICA members identified several of these challenges, including the need to share best practices, ensure robust project preparation, and address the financing gap.
While multilateral development banks (MDBs) and international financial institutions (IFIs)—including GICA members Asian Infrastructure Investment Bank (AIIB), Eurasian Development Bank (EDB), Asian Development Bank (ADB), and the World Bank Group (WBG)—have the experience and financial or analytical tools to help, actually finding or accessing these resources can be difficult.
Is there a way to bridge this knowledge gap?
Blog reader: “Dan! The government is one big system. Why didn’t your blog on the latest research on the quality of governance take this into account?”
Dan (Rogger): “Well, typically frontier papers in the field don’t frame their work as ‘modeling the system’ [which do?] However, Martin Williams at the Blavatnik School of Government hosted a conference last week on ‘Systems of Public Service Delivery in Developing Countries’ that directly aims to discuss how research can take into account the systemic elements of governance.
Across the digital economy in Indonesia, both IT giants and smaller companies have the same complain: digital talents are hard to find. Obert Hoseanto, an Engagement Manager from Microsoft Indonesia, said the company recently contracted only five people for an internship program, out of a pool of hundreds of applicants.
But those applying for jobs are also struggling, with many realizing the difficulties of meeting the needs of their employers. Natali Ardianto is learning the ropes at tiket.com, a thriving start-up, “by doing”, he said. “Only 30% of the curriculum of my education was useful for the company I joined,” he explained.
A recent workshop held by the Coordinating Ministry of Economic Affairs and supported by the World Bank strived to develop a better understanding of this skills gap, by bringing in insights from the private sector, education experts, and global practitioners.
Sun or rain? Most of us rely on the daily weather forecast to know what to wear or whether to bring an umbrella. However, for millions of people living in flood prone areas, timely and accurate forecasts, as well as early warning, can impact more than just clothing choices –they can help minimize flooding impacts.
Floods are the most frequent and damaging among natural hazards. Between 1980 and 2016, floods led to economic damages exceeding US$1.6 trillion, and more than 225,000 people losing their lives. Compounded by rapid urbanization and climate change, these losses will likely increase, especially in fast-growing countries.
Photo: Creativa Images | Shutterstock
Critically constrained public resources on the one hand, and huge existing infrastructure needs for basic services on the other, make private participation in emerging markets and developing economies (EMDEs) not just critical, but in fact, imperative. Crowding in private finance is essential to spur economic development and meet the twin goals of shared prosperity and elimination of extreme poverty, as well as to achieve the Sustainable Development Goals.
The Private Participation in Infrastructure (PPI) Database, with data spanning over almost 27 years, has become a powerful tool and measure for gauging the level of private investment in infrastructure in EMDEs.
Photo: Felix_Broennimann | Pixabay Creative Commons
Infrastructure is a key driver for growth, employment, and better quality of life in emerging markets and developing economies (EMDEs). But this comes at a cost. Approximately 70% of global greenhouse gas emissions come from infrastructure construction and operations such as power plants, buildings, and transport. The Overseas Development Institute estimates that over 720 million people could be pushed back into extreme poverty by 2050 as a result of climate impacts, while the World Health Organization projects that the number of deaths attributable to the harmful effects of emissions from key infrastructure industries will rise from the current 150,000 per year to 250,000 by 2030.
Does this mean we need to build less infrastructure? No. But part of the solution lies in low-carbon infrastructure.
On Thursday, April 5, the World Bank-Singapore Infrastructure Finance Summit will take place – the eighth time that the World Bank, the Government of Singapore, and the Financial Times are partnering to hold this annual event.
The Summit has gone from strength to strength each year, and helped pave the way for the many infrastructure-themed events across the reigon. This year, as Singapore’s chairing of ASEAN brings its ministerial meetings to the city-state, finance ministers from across Southeast Asia will join the Summit, and their presence underscores the importance they attach to sustainable infrastructure development.
In the infrastructure domain, “price” is a prism with many façades.
An infrastructure economist sees price in graphic terms: the coordinates of a point where demand and supply curves intersect.
For governments, price relates to budget lines, as part of public spending to develop infrastructure networks.
Utility managers view price as a decision: the amount to charge for each unit of service in order to recover the costs of production and (possibly) earn a profit.
But for most people, price comes with simple question: how much is the tariff I have to pay for the service, and can I afford it?
Photo: ItNeverEnds | Pixabay Creative Commons
The digital economy has emerged as a key driver of growth and development across the world. According to Huawei and Oxford Economics, it accounted for 15.5% of global GDP in 2016 and this share is expected to increase to 24.3% by the year 2020—growing 2.5 times higher than the overall growth of the global economy.
However, along with rapidly increasing digitization, we are witnessing an exponential increase in cyber risks. These have potentially huge financial impacts that could place entire economies and societies in jeopardy. Such threats now typically include privacy breaches, cyber fraud, denial-of-service attacks, and cyber extortion. There are many examples just within the last few years. For instance, a cyber attack on Ukraine’s power grid in 2015 caused serious power outages, and in 2016, the Central Bank of Bangladesh lost $81 million in a cyber heist. That same year, more than 3.1 billion records were leaked globally.
While traditional approaches such as establishing computer emergency response teams and national cyber security agencies are important, there is a need to engage more actively with both public and private entities through new institutional structures, new technologies, and new business models. Cyber risk insurance is one tool that can help address these challenges.
Photo: Grzegorz Zdanowski / Pexels Creative Commons
Some regard institutional investors—with their deep pockets—as the white knights filling the huge investment gaps in infrastructure development in emerging markets and developing economies (EMDEs). The IMF estimates that some 100 trillion dollars are held by pension funds, sovereign wealth funds, mutual funds, and other institutional investors. Unquestionably, the long-term nature of their liabilities matches the long-term financing requirements of infrastructure projects. So, it’s no surprise that institutional investors are seen as the white knights of infrastructure finance.