Is the Global Infrastructure Hub more than a G20 legacy monument?
By Hugh Jorgensen, Research Associate and Tristram Sainsbury, Research Fellow, both at the Lowy Institute’s G20 Studies Centre.
Infrastructure has been a priority of the Australian G20 presidency, but we haven’t seen much in terms of bricks and mortar proposals. Until now.
Writing in The Australian earlier this week, David Uren and David Crowe report that the Australian Government has gained G20-wide endorsement of a Global Infrastructure Hub. Likely to be based in Sydney, Uren and Crowe write that the Hub ‘will develop a database of projects and try to get more agreement between governments on ways to cut the cost of transactions when private sectors bid for government tenders.’ While the Hub has been given a non-renewable four-year time limit, the Prime Minister believes it will be ‘a way of getting (Australia’s) generally speaking, quite innovative approach to infrastructure before other countries.’
In September, Finance Ministers stated lofty ideals for the G20’s infrastructure agenda, with objectives including developing a knowledge-sharing platform, addressing data gaps, and developing a consolidated database of infrastructure projects connected to national databases, to help match potential investors with projects. Somewhat vaguely, the Ministers left the ‘implementation mechanism’ to be announced by national leaders in November.
If the Hub succeeds in delivering on these ideals, it will make for a welcome addition to global infrastructure financing. The B20, a collection of business leaders, has lent enthusiastic support to the proposal, and has optimistically estimated that the Hub could lead to an additional US$2 trillion of infrastructure funds being sourced by 2030, mostly through the matching of governments with investors. The B20 believes the Hub ‘could’ also produce an additional US$600 billion in annual economic activity and 10 million jobs per year.
Yet the announcement does raise a few questions.
What will the Hub do …read more