{
  "title": "Bridges to Growth, Not Roads to Nowhere: Scaling Up Infrastructure Investment in Low-Income Countries",
  "publication": "IMF Blog, December 3, 2010",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2010/12/03/scaling-up-infrastructure-investment-in-low-income-countries",
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  "summary": "For low-income countries, the absence of reliable infrastructure—roads, railways, ports, but also power supply—has become an increasingly binding constraint on growth.",
  "sections": [
    {
      "heading": "Overview and context",
      "content": "- For low-income countries, the absence of reliable infrastructure—roads, railways, ports, but also power supply—has become an increasingly binding constraint on growth.\n- Investment in infrastructure can raise productivity, boost growth, and help reduce poverty, but getting investment decisions right is complex.\n- Many low-income countries showed a lot of resilience during the global economic crisis. A global recovery is now underway, but it remains fragile and uneven.\n- Dynamic emerging market economies are more robust and are new development partners with relevant experience in scaling up investment."
    },
    {
      "heading": "Key statistic on financing needs",
      "content": "- The World Bank has estimated that, in sub-Saharan Africa alone, the total financing need is around $93 billion per year.  \n- One third of this is still unfunded."
    },
    {
      "heading": "Major messages from the IMF-sponsored conference on scaling up infrastructure investment",
      "content": "- Stronger framework for public sector investment decisions\n  - Countries need to develop a coherent strategy for scaling up infrastructure that maximizes the growth potential.\n  - Countries need to follow through on their investment strategies through a strong institutional framework that:\n    - keeps implementation in line with the strategy,\n    - ensures that projects are properly appraised and good projects selected,\n    - sees that adequate resources are budgeted so that investment projects can be completed and maintained.\n  - Good governance and strong public financial management systems are critical.\n  - Countries need to be savvy about how they finance the scaling up:\n    - ensure that the fiscal revenue base is strong and growing—through tax reform and good revenue administration—so that the public sector can more easily afford the debts it takes on,\n    - ensure that all borrowing indeed finances investment, and hence growth, not consumption,\n    - adopt a good debt management strategy to ensure that the overall amount and type of debt that the country assumes is within its capacity to repay.\n\n- Support for capacity building\n  - Multilateral institutions and donors can help with financing, but their contribution to capacity building is equally important.\n  - From the IMF’s perspective, capacity-building support includes:\n    - helping countries design budgets consistent with infrastructure plans,\n    - building capacity to manage their debt,\n    - developing better tools to assess the likely growth returns from investment.\n  - New development partners have practical experience to share. Example given:\n    - The Chinese have had a lot of success in planning coherent investment, constantly reassessing infrastructure gaps and reorienting resources, and ensuring that infrastructure projects are linked up (for example, if they build a port, they also build roads and railways that lead to the port).\n\n- A bigger role for the private sector\n  - Governments should define strategy and identify gaps, but in some areas it is sensible to rely mostly on private sector investment.\n  - Energy and telecoms are examples where a mixture of public and private sector investment can work.\n  - Tapping private sector equity financing allows investment to be scaled up beyond what the government might be able to afford.\n  - It is crucial that governments create an enabling environment—good tax system, good governance, and a sound legal framework—to give confidence that the environment will allow a proper return on private investments."
    },
    {
      "heading": "Implication and next steps highlighted",
      "content": "- The conference set the stage for ongoing dialogue about how low-income countries can increase the volume and quality of investment in a sustainable way.\n\nBridges to Growth, Not Roads to Nowhere: Scaling Up Infrastructure Investment in Low-Income Countries — Hugh Bredenkamp, Roger Nord, December 3, 2010\n\n---\n\n\n References\n\n- conference\n\nSource: https://www.imf.org/en/blogs/articles/2010/12/03/scaling-up-infrastructure-investment-in-low-income-countries"
    }
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    "Authors: Hugh Bredenkamp, Roger Nord",
    "Published: December 3, 2010",
    "For low-income countries, the absence of reliable infrastructure—roads, railways, ports, but also power supply—has become an increasingly binding constraint on growth.",
    "Investment in infrastructure can raise productivity, boost growth, and help reduce poverty, but getting investment decisions right is complex.",
    "Many low-income countries showed a lot of resilience during the global economic crisis. A global recovery is now underway, but it remains fragile and uneven.",
    "Dynamic emerging market economies are more robust and are new development partners with relevant experience in scaling up investment.",
    "The World Bank has estimated that, in sub-Saharan Africa alone, the total financing need is around $93 billion per year.",
    "One third of this is still unfunded.",
    "Stronger framework for public sector investment decisions",
    "Support for capacity building",
    "A bigger role for the private sector",
    "The conference set the stage for ongoing dialogue about how low-income countries can increase the volume and quality of investment in a sustainable way.",
    "[conference](http://www.imf.org/external/np/seminars/eng/2010/spr/lic/index.htm)"
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