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Report: $2 trillion per year global infrastructure deficit

Posted on May 20, 2010

The World Economic Forum's Positive Infrastructure Report finds that the world faces a global infrastructure deficit of $2 trillion per year over the next 20 years. The report analyzes the four largest infrastructure markets — Brazil, China, India and the U.S. and studies how to best deploy public funds made available through global fiscal stimuli packages to advance the issue of infrastructure development.

The report also identifies the role of the public sector as vital in redressing this deficit. It was apparent from all the regions analyzed that infrastructure development was most successful where the public sector had a clear infrastructure development plan on how infrastructure investments would fit into the national economic development plan and where this infrastructure development plan was coordinated at the highest levels, according to the World Economic Forum.

The report highlights the Eleventh Five Year Plan for Energy development by the National Development and Reform Commission of the People's Republic of China as an example of one such plan which sets specific goals for the development of energy infrastructure in China.

The report delineates a critical difference between developed and developing countries. In developing countries the emphasis of the infrastructure development plan has to be on increasing the capacity of infrastructure systems, while in the developed world the emphasis has to be on optimizing existing infrastructure systems through the use of incentive mechanisms such as congestion pricing and through leveraging advanced technologies in systems management.

Additionally, the report finds that the most successful infrastructure projects exist where the private sector has been involved through the full lifecycle of a project in public-private partnerships (PPPs) where the private and public sector cooperate to augment the efficiency of the project. This finding provides a future vision of private sector involvement where PPPs become a vehicle to promote efficiency gains and not fill public sector capacity gaps.

To view the full report, click here.

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