Over 1,000 representatives including policy makers and industry leaders from around 50 countries and regions are gathering in town for an annual dialogue on further international infrastructure cooperation, as the Sixth International Infrastructure Investment and Construction Forum (IIICF) commenced yesterday at the Venetian Macao.
In light of the increasingly apparent trend of regional economic integration, the Forum this year focuses on international infrastructure cooperation innovative models.
In his keynote speech, Sri Lanka’s Minister of Ports and Shipping, Arjuuna Ranatunga, acknowledged a wide recognition of the potential benefits of regional economic integration in magnifying infrastructure cooperation across different regions.
In response to China’s attempts to initiate a “Belt and Road” blueprint, the minister said that his island country is keen to develop into an international shipping hub that networks with the rest of Asia. “We cannot afford to postpone making a decision on this issue, which is already behind by at least ten years,” he said, adding that the theme of this year’s forum is “timely and hosts immense significance.”
“I believe that infrastructure has never been more important to global growth,” said Michael Bear, Chairman of the UKTI Regeneration Investment Organization and UK Special Envoy for Sustainable Urbanization to China.
The diplomat cited analysists’ estimates that USD57 trillion of investment is needed in global infrastructure between 2013 and 2030, simply to keep up with world GDP growth; whilst spending on infrastructure projects will double between now and 2025 to reach USD9 trillion per year.
“Overall, close to USD78 trillion is expected to be spent globally between 2014-2025. To put that into context, this is more than the total estimated value of today’s infrastructure. So there is a great need for new infrastructure which reflects our shifting economic and demographic trends,” he explained.
On the other hand, speakers stressed that investment gaps have become increasingly prominent and thus are a key challenge that needs to be addressed for further international cooperation.
Zambia’s Minister of Mines, Energy and Water Development, Christopher Yaluma, told the forum that “on infrastructure development, Africa alone needs approximately USD93 billion to close the infrastructure gap.”
In Latin America and the Caribbean (LAC), only 2.5 percent of DGP is invested into infrastructure, according to the Inter-
American Development Bank’s Vice President for Private Sector & Non-Sovereign Operations, Hans Schulz. “Yet the region requires 5 percent to stay competitive. That’s an investment gap, and a business opportunity, of USD170 billion annually,” he told the packed forum hall.
The expert indicated that not only is there room for investment, but there is also a broader range of infrastructure and services to be covered. As for the Chinese investment in the LAC region two years ago, almost 90 percent of it was concentrated on extractive activities, particularly mining and hydrocarbons. “Chinese investment needs to grow and diversify to deepen the productive integration with Latin America,” he suggested.
“The key to success in raising enough investment for tomorrow’s essential infrastructure rests in finding the optimum balance between public and private money. Future infrastructure will need to be investment-grade and packaged as genuinely investible opportunities,” Mr Bear also suggested.
Incremental global investment opportunity is also expected to make infrastructure greener and climate-resilient, the speakers repeatedly stressed.
“Climate change is putting tremendous pressure on infrastructure, which can’t quite keep up. (…) To foster long-term development, sustainability in infrastructure design is paramount,” said Mr Schulz.
Apart from “hard” infrastructures such as transport and energy, some regions have long neglected the construction of “soft” infrastructure, such as policies, regulations, systems, capacity, and institutions to support the development and efficient operation of physical structures, Sri Lankan Minister Ranatunga pointed out.
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