B20 calls on G20 to progress Global Infrastructure Initiative Tuesday 7 October 2014 – Business leaders are calling on the G20 to progress the Global Infrastructure Initiative agreed by G20 Finance Ministers and Central Bank Governors in Cairns in September when they meet again in Washington this week. Mr David Thodey, B20 Infrastructure & Investment Taskforce Coordinating Chair, said the initiative would help facilitate greater investment in infrastructure which was critical for the G20 to reach its ambitious growth target of two per cent above trend over the next five years. “The B20 has made six infrastructure related recommendations to the G20 which if implemented could contribute 100 million jobs and $6 trillion of economic activity to the global economy every year,” Mr Thodey said. “This is equivalent to more than one per cent of the growth target. “We have recommended that the G20 establish an Infrastructure Hub with a global mandate to disseminate leading practice to facilitate the development and delivery of pipelines of bankable, investment-ready infrastructure projects. “This would enable the G20 to increase quality investment with a multi-year infrastructure agenda which is important if major projects are to be considered independently of country electoral cycles. “The proposed Hub would initiate the development of a knowledge sharing platform to address data gaps and create a consolidated database of infrastructure projects, connected to national databases, to help match potential investors with projects. “Importantly, it would leverage and build upon existing infrastructure programs at international institutions and multilateral organisations, including the World Bank.” Mr Thodey said the G20 Finance Ministers & Central Bank Governors have committed to developing the implementation mechanism for the Global Infrastructure Initiative by the time of the G20 Leaders Meeting in November. “Business encourages the G20 to adopt the Infrastructure Hub model as one of the key enabling mechanisms,” he said. G20 countries face a common set of challenges around investment in infrastructure. It is estimated that $60-70 trillion is needed to 2030, equivalent to $4-5 trillion each year. Investment is needed in roads, power, water, telecommunications and transportation as well as hospitals and schools. “At this point only $45 trillion is forecast to be spent, leaving a funding gap. Yet there is a significant volume of private long-term funding available and interest rates are at historically low levels. “Addressing this gap by developing more investable projects more quickly would enable trade, business and better government services and increase employment and economic growth. “But a failure by any country to agree to progress this initiative would result in fewer jobs, weaker economic growth and lower standards of living,” Mr Thodey said. Last week, the IMF’s World Economic Outlook found that for countries with an infrastructure need, now is a good time for an infrastructure push and the impact of such investment is stronger when there is economic slack and investment efficiency is high. The key elements of the B20 infrastructure & investment recommendations are:  Set infrastructure investment targets and establish independent infrastructure agencies to rigorously assess and develop a prioritised list of projects  Establish a Global Infrastructure Hub to promote ongoing improvements by sharing leading practices and approaches, including improving the efficiency of regulatory approvals and standards for transparent procurement  Actively promote diversity in the range of infrastructure investment instruments, encourage the development of local infrastructure investment markets, and facilitate stronger cross-border investments to address declining foreign direct investment in infrastructure