Figure 1.1 Public infrastructure investment is a large fraction of both total and public investment in developing countries. Projected needs in Africa are around 5.9 per cent of regional GDP in 2016-2040, more than the current 4.3 per cent. Foreign investment, however, is helping fill in some of the gaps. IPS is an international communication institution with a global news agency at its core, Percentage of investment allocated to infrastructure 60 50 40 30 20 10 Total investment Public investment Low-income countries Middle-income countries Sample: Twelve low-income and eight middle-income As the world’s eighth largest national tourism market Australia offers significant opportunities for investment in tourism infrastructure. Despite infrastructure spending being likened to traditional public goods such as highways, ports and schools, recent policy debate typically denigrates the public sector, instead favouring private finance. The presence of these tourists in areas with limited resources can also help improve local conditions such as roads, transportation and access to modern conveniences. Why Investing in Infrastructure in Developing Countries Will Benefit Us All 08/11/2015 04:20 pm ET Updated Aug 11, 2016 ETHIOPIA - MAY 09: Sinayta Tshoma, a greenhouse worker, age 30, takes a break during a rose harvest at Minaye Flowers Plc flower farm in Debre Zeit, Oromia, Ethiopia, on Friday, May 9, 2008. The plans rarely specify how infrastructure development would enable industrialization, or identify tools to ensure infrastructure investments accelerate structural transformation, economic diversification and growth. Investing in education, health, andsocial protection not only pays off for individuals whose lives are improved, we now have evidence that it contributes directly to economic growth and greater stability for their countries. Many of these areas are historically agrarian, which tends to limit their sources of revenue and cripple their potential for development. Tourism can be helpful for developing countries, but it is hardly a silver bullet for their problems. These measures should lead to eco-friendly, high speed and efficient transport infrastructure leading to the accelerated growth of the country itself. The Employment Paradox in Former Soviet States, How Beautiful Together is Helping Orphans by Capturing the Struggles of Poverty, Action Against Hunger: Innovative Research to End Hunger, The Refugee Olympic Team Gives Hope to Refugees, Congress Acts Against Attacks on Religious Minorities in Afghanistan, Combatting Poverty in Mexico During COVID 19, World Bank Fights the Impacts of COVID-19 in India. Credit: Jeffrey Moyo/IPS. SDG6 by 2030, it is estimated that capital investment needs to triple (to reach USD 1.7 trillion), and operating and maintenance costs will be commensurately higher. Multilateral financial institutions – such as the Asia Infrastructure Investment Bank – are scaling up investment, and several international initiatives – such as the Belt and Road Initiative of China – prioritize infrastructure. Every year, millions of tourists flock to tropical beaches in impoverished countries such as Mexico, the Dominican Republic and Indonesia. For various reasons, infrastructure projects in developing countries are receiving broad endorsement. The prevailing bankability approach tends to avoid addressing how infrastructure can enhance productivity, structural transformation as well as economic and social change in much of the developing world. Infrastructure for structural transformation But, there was too little emphasis on accelerating structural transformation. All rights reserved. Infrastructure and development are better connected when projects are well designed and integrated into a wider development strategy promoting positive feedback among infrastructure, productivity and growth. BORGEN Magazine is produced by The Borgen Project, an influential humanitarian organization working to make global poverty a focus of U.S. foreign policy. Infrstructure is important to economic development for five reasons. The private sector will invest in the tourism infrastructure required to service visitors, such as accommodation, attractions, tour product and restaurants, if basic public infrastructure is provided. UNCTAD’s analysis of over 40 developing countries’ national development plans suggests too much emphasis on infrastructure projects – which appeared in 90 per cent of them – as business opportunities. While tourism is undoubtedly helpful for poor countries’ economies, it can also bring added challenges to these developing nations. Foreign assistance in the developing world needs to go beyond the beach. Foreseeing the demand that may occur during seasons is crucial in determining how much money should be invested in … The short answer is yes. Copyright © 2020 IPS-Inter Press Service. All rights reserved. TDR 2018 advocates putting infrastructure investment at the centre of national developmental strategies with more political will, experimentation and planning discipline. - Terms & Conditions. The following are common types of economic infrastructure. American infrastructure in selected, built, maintained, operates and paid for in a diverse and fragmentary fashion. KUALA LUMPUR and SYDNEY, Oct 9 2018 (IPS) - Infrastructure investment is necessary, but hardly sufficient to enable developing countries to transform their economies to achieve sustainable prosperity, according to this year’s UNCTAD Trade and Development Report: Power, Platforms and the Free Trade Delusion (TDR 2018), released in late September. Private investment (both foreign and domestic) in tourism is directly related to the availability of adequate infrastructure (roads, water supply, telecommunications and power supply) and the involvement of the Government of Tanzania in the provision of essential public infrastructure is crucial for the expansion of the tourism industry. As infrastructure develops, tourism should increase – but the environment might suffer. ... Australian Tourism Open for Investment Download; Investor Update. But bankability will not close the financing gaps for infrastructure investment. Regional, racial and educational factors can all serve as barriers to a person’s participation in the tourism industry. The industry also reduces the native country’s autonomy as it relies wholly on external factors such as foreign consumers and the climate. Tourism threatens countries when they become too dependent on this singular source of revenue. Tourism can be a useful source of income to help developing countries improve conditions and invest in the future, but these countries should be careful to lean toward diversification of their economies instead of dependence on tourism. There is a general concern however about the poor condition of local infrastructure and the insufficient capacity at the decentralized level to develop and sustain this infrastructure. While foreign money from tourism helps people in developing countries, it may not help them all equally. At its most basic level, tourism brings much needed foreign money into these countries’ economies. Your contribution will make a huge difference. Would you consider a $20.00 contribution today that will help to keep the IPS news wire active? Albert Hirschman’s discussion of ‘unbalanced growth’ showed that sequencing and experimentation could better balance public infrastructure and private investment, thus breaking vicious circles standing in the way of development. 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