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7 - A massive global infrastructure initiative

from Part II - A Win-Win Path to Recovery

Published online by Cambridge University Press:  05 June 2013

Justin Yifu Lin
Affiliation:
Peking University, Beijing
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Summary

The gap between infrastructure demand and supply is so large in developing countries mainly because of the difficulty raising the long-term financing required. Putting a price tag on this gap requires some heroic assumptions about missing data. A 2011 study estimated annual infrastructure needs in developing countries for 2013 at $1,250 billion to $1,500 billion (in 2008 dollars) under various scenarios. The study estimated the financing available for infrastructure projects in developing countries at about $850 billion. If the same amount continues to be available in the medium term, the estimated infrastructure financing gap would be $400 billion to $650 billion a year.

A global infrastructure initiative to finance bottleneck-releasing infrastructure projects would create much-needed jobs in developed and developing countries. It would generate a demand boost and create space for implementing necessary structural reforms in Eurozone and other high-income countries. And a concerted push for a global infrastructure initiative could contribute to a sustained global recovery from the current crises. It is a global win-win for developed and developing countries alike, today and into the future.

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Chapter
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Against the Consensus
Reflections on the Great Recession
, pp. 78 - 98
Publisher: Cambridge University Press
Print publication year: 2013

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