World Bank's infrastructure spending increases
Singapore: The World Bank Group's financing commitments in roads,
bridges, energy, clean water, and other critical infrastructure projects
grew by 45 percent to US$24.2 billion in the fiscal year 2014, up from
US$16.7 billion in the previous year. The jump in financing was due to
increased demand from developing countries.
The increase comes against a backdrop of an overall decline in
private sector investment in infrastructure across the developing world.
Such investments - including those through public-private partnerships -
are considered critical in reducing poverty.
Commitments to Public-Private Partnerships (PPPs) and fully private
projects declined by nearly 20 percent, from US$181 billion in 2012, to
US$146 billion in 2013, according to World Bank Group estimates.
The increase in World Bank Group financing marks the highest level of
infrastructure-related lending by the World Bank Group since 2011, with
the bulk of investment focused on energy and transport projects.
However, with global demand for infrastructure estimated at US$1-1.5
trillion annually above current investment levels, much larger
commitments from the private sector are necessary to help low and
middle-income countries boost growth and reduce poverty.
"It is clear developing countries badly need more infrastructure and
we are stepping up with more financing to provide clean drinking water
for families, electricity so that children can study at night, and
better roads for farmers to take goods to markets," said World Bank
Group President Jim Yong Kim.
Kim welcomed efforts to set up a BRICS bank and discussion around an
Asian Infrastructure Investment Bank, saying that if those developments
eventually provided more funding for infrastructure, the poor would
benefit.
"Globally, we need additional funding for critical infrastructure
projects, and so we welcome efforts that will lead to more long-term
financing for transport, energy, clean water and sanitation projects.
Our real competition is ending extreme poverty as soon as possible
and our shared goal is to build opportunities and improve the lives of
the poor," Kim said.
Kim was visiting Singapore where the World Bank Group focuses on
leveraging risk instruments, credit enhancement and guarantees to
promote public and private investment in infrastructure. The Bank Group
includes IBRD, provider of development loans to governments; IDA, the
fund for the poorest countries; IFC, a private sector arm; and MIGA, an
investment guarantee arm.
Singapore is the final stop of a five-country East Asia tour by
President Kim, which included visits to China, Japan, the Philippines
and Vietnam.
In Singapore, President Kim met Prime Minster Lee Hsien Loong,
Emeritus Senior Minister Goh Chock Tong and Minister of Health Gan Kim
Yong, to reinforce the World Bank Group's partnership with the island
state on a range of initiatives, including mobilising infrastructure
investments.
President Kim stressed the importance of the proposed development of
a Global Infrastructure Facility to work with private and public
financing partners, bolster the pipeline of viable investments and help
fill the huge gap in infrastructure financing. Kim pointed to
Singapore's expertise in infrastructure financing as one area where the
country can share the lessons of its remarkable economic success with
neighboring countries.
"Singapore's success in urban planning, economic development, public
housing and health care contain important lessons," President Kim said.
"The World Bank Group is working with Singapore to help bring the
lessons to countries around the world," he said.
Kim said the World Bank Group has created new global practices that
are specifically designed to help transfer global development solutions
from countries such as Singapore to the rest of the world.
Singapore Prime Minister Lee Hsien Loong welcomed the partnership
with the World Bank Group.
"Singapore values our partnership with the World Bank. We look
forward to enhancing our cooperation with the Bank and to sharing our
experience with other countries," said Prime Minister Lee Hsien Loong.
In the 1960s and 1970s, Singapore received14 World Bank loans to
improve its infrastructure, environmental management, education system
and development finance.
Today, Singapore is a shareholder in the World Bank Group and a donor
to IDA, the Bank Group's fund for the poorest countries. Singapore has
also invested in IFC's Asset Management Company for infrastructure. |