It should be celebration time for public-private partnerships and other forms of private investment in infrastructure. The pent-up demand for infrastructure in the developing world has never been greater—over double the $900 billion per year being spent now, according to our rough estimates; and governments around the world are falling over themselves to show donors, strategic investors and creditors alike how committed they are to attracting private investment to infrastructure.
Somehow, as we release the 2012 data on private participation in infrastructure (PPI) across the developing world [see: PPI Database], I just can’t get myself to pop the champagne. True, the march into higher levels of investment, uneven as it is, continues. Commitments for PPI totaled $182 billion in 2012 and most developing countries clocked in with at least one private investment. But the total is still less than 20 percent of what the developing world is spending on infrastructure, and less than 10 percent of what is needed to reach growth targets. It is still less than one percent of GDP for developing countries.
If the demand is out there, what are all those investors scared of?