G20 nations are mulling a range of new plans to turbo-charge
infrastructure finance in low income economies.
South Korea has proposed setting up a high level panel to
look into ways to harness large scale private
capital flows to invest in infrastructure in lower income
countries, according to a draft development action
The document, drawn up by the G20s Working Group on
Development, highlights a range of infrastructure investment
proposals that will be considered by leaders in Seoul.
South Korea is also looking to launch an Infrastructure
Investment Facility (IIF), which will work together with bodies
such as Nepad, the African Unions economic development
program. The IIF will be capitalized by G20 members, debt
finance from the international financial institutions and
funding from other public and private investors.
Developing economies in the G20 are also calling on the IMF
to differentiate clearly in their fiscal surveillance between
state infrastructure spending and other outlays such as public
sector salaries. Argentina is lobbying for 10% of future
special drawing rights (SDRs), the IMFs accounting unit,
to be transferred to the International Development Association
(IDA), the World Banks concessional lending arm.
The UK is pushing for a Climate Public Private Partnership
fund, which will be capitalized by private investors and will
invest in regional climate funds, which will in turn invest in
low carbon infrastructure, according to the draft
The UK is also calling for a Green Africa Power initiative
to increase energy capacity through long-term power purchase
agreements to renewable energy developers, which would provide
security of payment. The GAP would also set up corresponding
off-take agreements with national utility companies.
The proposals have been thrashed out in consultation with
multilateral organizations and aid experts through the newly
created G20 Working Group on Development, in a bid to create
consensus on a global anti-poverty agenda.
The strategys comprehensive approach to development
has strong backing in many quarters of the aid community.
South Korea has established a long-term development
vision with strong consultative processes between rich and poor
countries, said Dirk Willem te Velde, economist at the
Overseas Development Institute (ODI).
Its pillars are infrastructure, private investment and job
creation, human resources development, trade, financial
inclusion, growth resilience and food security, governance
(tax) and knowledge sharing.