The pandemic has highlighted the need for a renewed focus on building critical infrastructure, said
Bruno Carrasco, Hanif Rahemtulla, and David Bloomgarden of the Asian Development Bank.
Carrasco is Director General concurrently Chief Compliance Officer, Sustainable Development and Climate Change Department, Asian Development Bank while Rahemtulla is Principal Public Management Specialist anf Bloomgarden is Public-private partnership (PPP) expert
In their blog, the trio claimed that COVID-19 has hit the entire globe at once, slowing investment in resilient infrastructure that will improve lives over the long term.
Effective governance is critical to ensure infrastructure projects are well planned, funded, and implemented and investing in resilient and adaptive infrastructure after COVID-19 can help us reignite global growth, attain the Sustainable Development Goals (SDGs), and lessen climate risk.
Asia and the Pacific, according to them needs to invest an estimated $26 trillion for water and sanitation, telecommunications, power, and transportation from 2016 to 2030. This includes about $200 billion a year to mitigate climate change and $41 billion a year to make infrastructure more resilient.
Governments need to make sure public spending is efficient. They must use their scarce resources to target economic, social, environmental, and climate priorities.
According to the IMF, developing countries in Asia and the Pacific lose an average of 32% of their investments due to inefficient planning and development. To be fiscally sustainable, infrastructure investment should be linked with budgets and medium-term spending plans.
Governments around the world are under intense fiscal pressure, and this will likely get worse the longer COVID-19 hampers economic growth, while we wait for populations to get vaccinated.
Stronger early planning, along with monitoring, can help decision-makers understand the long-term effects of infrastructure projects and take climate impacts into account. This means having a rigorous process to appraise and select projects by assessing the economic, social, fiscal, environmental, and climate-related costs and benefits. Planning and monitoring systems should be based on a long-term infrastructure vision that includes an assessment of needs.
Projects should also account for the full life cycle of assets, to ensure value for money. In the medium to long term, the net benefit on average of investing in more resilient infrastructure in developing countries is $4.2 trillion globally with $4 in benefit for each $1 invested, according to the World Bank report Lifelines: The Resilient Infrastructure Opportunity.
Stronger early planning, along with monitoring, can help decision-makers understand the long-term effects of infrastructure projects and take climate impacts into account.
Amid growing budget pressures, governments will need to mobilize private finance along with public investment.