Financing the Global Infrastructure Gap

Global infrastructure needs are gigantic, not only for advanced economies but also for emerging ones. In fact, global demand for the funding of infrastructure investments is expected to reach as much as $57 trillion by 2030. New infrastructure investments and the replacement of existing ones can boost global demand and long-term growth at a time when the economic recovery from the global recession is still uneven and fragile. At the same time, as the global economy emerges from the crisis of 2007-09, long-term investors—who together hold around $85 trillion in assets under management—are struggling to find stable alternative assets to treasuries and equities. With private equity and real estate too small to be able to absorb the massive savings investors may need to redeploy, global infrastructure investments look increasingly attractive.

On October 8, the Brookings Africa Growth Initiative hosted a discussion on the global infrastructure financing gap, the rationale and challenges for institutional and other investors, and the potential benefits for the global economy from renewed investment in infrastructure. Panelists included: Erik Berglof, chief economist and special adviser to the president at the European Bank for Reconstruction and Development; Henry Rotich, cabinet secretary for the Kenyan National Treasury; Julia Prescot, partner and chief strategy officer at Meridiam Infrastructure; Michel Wormser, former vice president and chief operating officer of the Multilateral Investment Guarantee Agency at the World Bank, and Amadou Sy, senior fellow in the Brookings Africa Growth Initiative. Sandrine Rastello, Global Economics Correspondent at Bloomberg, moderated the discussion.