The USA’s long-term prosperity and competitiveness hinges on using its global influence and private capital to address the poor or inadequate infrastructure in developing countries, the Fortune article says.
According to the article, “mobilizing private-sector capital to finance sustainable infrastructure in developing countries, especially across the African continent, makes humanitarian, environmental, and strategic sense.”
The article enumerates why America should invest in Nigeria, or other sub-Saharan African countries, Asia, and the Middle East, and how it would benefit them, which are:
- U.S. retirees can get higher returns on their retirement savings when investing in infrastructure in developing countries than from their pricey domestic stock market and low-interest paying banks.
- President Biden’s and the G7’s Build Back Better World (B3W) Partnership initiative is designed to counter China’s Belt and Road Initiative, which is to exert strategic influence on emerging economies. B3W aims to invest over $40 trillion in infrastructure in developing countries.
- Investing in developing countries’ infrastructure could impact 940 million people without electricity, one billion without access to roads, and infrastructure could address overpopulation problems. While developed countries have aging populations, developing countries’ population growth adds eligible workers to their workforce.
- Financing roads and power in countries with a booming labor supply can trigger decade-long periods of rapid economic growth that would benefit American enterprise and lift the global economy.
- Efficient and climate-friendly infrastructure can boost jobs for the local population. This could discourage them from migrating to the US, easing its immigration pressures.
- U.N. data from 1985 shows that returns on infrastructure investments could be ten times higher than returns on the stock market in wealthy nations; however, the same report also indicates that only 1 in 7 countries has proven efficient investment targets for transportation and power infrastructure.
According to the article, investments in infrastructure should not be done hastily but should be supported with robust data. It mentions that the World Bank has yet to produce a “common, current repository of infrastructure return estimates that governments and private-sector investors can use to make fact-based decisions about where (that is, in which countries and for which specific projects) investment is efficient and profitable.” The World Bank must provide updated data to attract wealthy countries to start investing in developing country’s infrastructure.
Asset management practice can assist the World Bank and developing countries in prioritizing infrastructure projects based on economics, benefits, and risk, ensuring optimal infrastructure investment that will deliver the greatest value amid all financial and other constraints, and advancing infrastructure services’ sustainability.
Implementing asset management in infrastructure projects or plans can make infrastructure investments more attractive and meaningful.
Evolving infrastructure management practice for developing countries includes integrating broader risk management, practice techniques, analysis of disaster risk assessment, disaster risk financing, climate change, climate adaptation, resilience practice, and build back better planning.