At global level, the investments allocated to infrastructure projects play a vital role in economic development, especially now, when the majority of states is confronting with economic problems and is affected by the negative effects of the global crisis. On this basis, the level of cross-border investments in infrastructure projects has significantly decreased: from USD 12 Trillion five years ago, the current figure is USD 5 Trillion, taking into account that until 2030, the infrastructure needs funds of USD 60 Trillion.
In this context, within the G20 Summit (September, St. Petersburg) the participant states adopted two important decisions: they have confirmed the need of private capital as a background for investments, including long-term; the second decision consists in establishing new instruments and creating new opportunities for investments, as development institutions, in order to sustain infrastructure investments. The major purpose is to eliminate the impediments and to support the investment projects.
In order to stimulate the growth of investment flow and accelerate economic growth, B20* has elaborated three sets of recommendations (in June 2013 within the International Economic Forum), included in the recommendations package for the G20 leaders. The first recommendation refers to the identification and elimination of barriers regarding the free movement of capital, its major objective being cross-border investment activity growth and the provision of equal access to investments for investors around the world.
The second recommendation that has to be taken into account by all the states refers to the stimulation of private investments in infrastructure projects and in other main assets of the economy. Thus, B20 requires the establishment of the G20 Fund for Project Preparation, valuing USD 200 Million. The measure will determine the growth of accessible infrastructure projects and will develop new financial guarantees and will reduce project costs.
The last recommendation aims to increase productivity of investments in infrastructure and green energy projects by encouraging the application and development of international best practices: building an infrastructure research network, including the establishment of a Competence Centre in Moscow; developing a set of public-private partnerships; creating an expert group responsible with the energy sector. The objectives of this recommendation determine capital efficiency growth and save over USD 1 Trillion/year for infrastructure investments.
“The key objective of our recommendations is to create the optimal conditions for global economic growth by promoting investment, especially in infrastructure. Approximately USD 60 Trillion will be required up to 2030 in order to create an efficient infrastructure, this representing more than the value of the entire existing infrastructure. The introduction of international best practices in infrastructure development would save up to USD 1 Trillion, enabling world GDP to grow by at least 3% if these savings were re-invested”, declared Kirill Dmitriyev, CEO of Russian Direct Investment Fund.
As regards Russia (that took over the G20 Presidency for 2013), the country will soon launch important infrastructure projects that will be implemented together with private investors and government agencies. “The Government proposes efficient and important steps for attracting international investors in these projects”, declared Dmitriyev. Russia’s G20 Presidency has as main priority the stimulation of investments for economic and labour force growth, including through infrastructure projects.
* Business 20 (B20) is an informal network of business associations, collaborating in order to maintain a continuous dialogue between the business community, G20 governments, and relevant international institutions.
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