Online - 14 October 2020: Firstly, let me congratulate the Saudi Presidency for its continuous leadership during this challenging year.
It is increasingly clear that G20 members, like all governments, are simultaneously responding to the evolving health crisis, while also working towards economic recovery nationally and globally.
We welcome the sustained emphasis on infrastructure in pillars three and five of the G20 Action Plan and remain committed to supporting G20 members in the global economic recovery.
Infrastructure-related investments should, and will, become an important element of medium- to long-term stimulus measures to help drive the global economic recovery.
In July, I spoke to you about our report which clearly established the important dual role infrastructure, as part of public investment, could play in the economic recovery firstly as near-term economic stimulus with a 1.5 fiscal multiplier within 2 to 5 years compared to only a 1.0 multiplier for the public spending, and secondly as a way of lifting medium to longer term productivity.
Now, as I am speaking to you, we are finalising preparations for the release our new flagship report – Infrastructure Monitor – which is designed to provide data-driven insights into priority areas of the G20 agenda on infrastructure.
For our 2020 report, we will present findings related to private investment levels in infrastructure, around the world, and the financial performance of infrastructure assets.
This report establishes that worldwide, private investment in new infrastructure only amounts to about USD100 billion a year. That number is smaller than expected, given international efforts around financing for development, and is not growing, even before the COVID-19 crisis started.
It also establishes that the financial performance of infrastructure investments is different to other asset classes and has been better than is generally understood. While other asset classes, such as corporate debt, tend to get riskier over time, infrastructure becomes more stable. This has important implications for investors and regulators and is a building block on the road to infrastructure as an asset class.
In addition, to practically boost private sector participation in infrastructure, and as an agreed priority of the Saudi G20 Presidency, the GI Hub has prepared a reference note that presents a unique and comprehensive framework to classify the various private participation models and investor types. In the paper we identified the revenue, risk management, and financing ‘levers’ that governments can pull to optimise how their infrastructure projects get funded and built.
This work presents practical solutions to address the main pain points for quality infrastructure and is supported by more than 60 detailed case studies that showcase projects from G20 economies and beyond that were successfully implemented. The case studies often highlight the critical role of multilateral development banks in enabling these projects as well as the close collaboration between the public and the private sector.
I look forward to sharing this work further with you all for the next meeting.
G20/OECD Report on the Collaboration with Institutional Investors and Asset Managers on Infrastructure
