infrastructure invesment
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Developing sustainable, quality infrastructure can both strengthen pandemic responses today and support economic recovery tomorrow states a new paper from the Swiss RE Institute.

A focus on “building back better” can address long-standing challenges and resilience.

The coronavirus pandemic is an unprecedented global health and economic challenge. The situation is particularly acute for emerging markets and developing economies (EMDEs), where investment is diverted from long-term priorities such as infrastructure.

First, COVID-19 is exposing the urgent need for better health infrastructure in EMDEs. Second, after the worst subsides, it will be vital that governments work to close their infrastructure investment gaps, emphases the Swiss RE Institute.

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The lesson from previous crises is that governments must guard against rushing to build lower-quality, more expensive, higher-carbon, and less resilient infrastructure assets.

Instead, they have an exceptional opportunity to launch green stimulus packages that prioritise sustainable infrastructure designed to mitigate the next public health crisis, bolster long-term economic growth after COVID-19, and adapt to the effects of climate change.

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Key resilience messages from the publication

  • The consequences of climate change – including rising sea levels, more frequent and extreme weather events, and increasing global temperatures – can have lasting, damaging effects on existing and planned core infrastructure, with a disproportionately damaging effect on small island developing states and least developed countries. 
  • Infrastructure investment plays a crucial role in stabilising EMDEs and providing access to basic services and will become an even more important driver for economic development in the aftermath of the COVID-19 pandemic – as such, priority must be given to not only driving more investment, but also to ensuring that such investments fill critical infrastructure service gaps.
  • Despite the growing need for accelerated investments in sustainable, quality infrastructure, such activity, particularly among institutional investors, remains staggeringly low – hovering at around 0.7% of total private participation across debt and equity investments. 

Get the Close the Gap paper.

By Patrick Saner, Head Macro Strategy, Swiss Re Institute & Fiona Gillespie, Economist Macro Strategy, Swiss Re Institute & Lori Kerr, Senior Infrastructure Finance Specialist, Global Infrastructure Facility & Carmel Ruth Lev, Consultant, Global Infrastructure Facility