The impact of the pandemic is beyond human health. Economies worldwide suffered from a reduction in income, a rise in unemployment, and disruptions in transport, service, and manufacturing industries.
The IPWEA article “How two local authorities in America plan to use infrastructure stimulus funding” says:
“Governments see infrastructure spending as a powerful way to stimulate their economies following the pandemic. Using public funds to create worthwhile assets is good for keeping people employed, providing increased sharemarket value, and supporting the wellbeing of communities.”
The article shares how the two US municipalities plan to spend the stimulus investment to stimulate their economies.
It cites the 2014 IMF study, which finds that an increase in capital spending of 1% of GDP leads to a 0.4 GDP rise and 1.5% rise four years later.
Countries like the UK, Australia, and the US are making significant infrastructure investments, particularly in water infrastructure, broadband infrastructure, roads, and rail, to support employment in the post-pandemic recovery that otherwise might have taken years to implement.
IPWEA asked senior decision-makers from the two US municipalities – the City of Ames and the City of Goldens on how they plan to spend their stimulus investments to benefit their communities, and below are a summary of their responses:
- Tracy Peterson, the municipal engineer for the City of Ames in Iowa, says that the city’s priority is to replace the community’s 100-year-old cast iron water mains, construct new pipes and hydrants, and fix their water main breaks and water quality issues. The city’s next priority project, according to Peterson, is to improve Ame’s roads and footpaths.
- The City of Golden in Colorado is looking to use their stimulus funds to improve the road network and extending its fibre network, according to Jeff Hansen, the city’s Finance Director. “The City recently completed a grade-separated interchange at Highway 6 and 19th Street. Completing a similar interchange at Highway 6 and Heritage Road is the next project along the corridor to help solve this issue. On the other hand, the impacts of the pandemic – with more people working from home and kids attending school remotely – has made broadband a high priority in Golden and across the country,” says Hansen.
The International Transport Forums (ITF) Covid-19 Transport brief says that using infrastructure investment has been a tried and tested method to spur economic growth successfully.
The brief states that this was one of Keynes’s main policy measures for recovery from the 1930s depression that authorities later adopted as one of the US “New Deal” foundations.
Experience from the century’s global financial crisis has taught that austerity measures following a crisis are counterproductive.
According to the report, countries that can borrow public investments to restart their economies should do so.
The following are some of the takeaways from the ITF brief to guide public infrastructure investments:
- policymakers should prioritize projects that can deliver jobs in the short and long term,
- invest in projects that are already in the pipeline,
- governments need to properly estimate and budget the life-cycle consequences of investments,
- interventions should follow IMFs TTT principle – timely, targeted, and temporary, stimulus packages should aim to advance decarbonization, social equity, and resilience.
Countries that have been badly affected by the pandemic can follow the examples of some countries that invest in their infrastructures, improving and building them to stimulate recovery from the crises.
Past lessons and studies can also show how the country’s leaders and development planners can do this successfully.
Source Citation:
How two local authorities in America plan to use infrastructure stimulus funding. (2021, July 16). Insite. Retrieved from https://insite.ipwea.org/how-two-local-authorities-in-america-plan-to-use-infrastructure-stimulus-funding/?_zs=eWSVl&_zl=FRBx1
Covid-19 Tansport Brief. (2021, March 3). International Transport Forum. Retrieved from https://www.itf-oecd.org/sites/default/files/infrastructure-investment-covid-19.pdf
[…] Infrastructure investment has always been viewed as key to creating good jobs and boosting economic recovery. But as history shows us, infrastructure investments should go beyond economic costs and benefits and consider social equity, environmental health, and sustainability. […]