EU’s Global Gateway
In competition with China, the European Union (EU) has pledged to give €300 billion to countries around the world in order to help them rebuild their infrastructure. The EU’s Global Gateway is a ‘global investment plan’ that will offer options to countries that are currently dependent upon China’s Belt and Road Initiative and also provide different opportunities through the United States’ and G7’s Build Back Better World initiative. These three different strategies and initiatives will all work in cooperation but also compete with each other to increase infrastructure in underdeveloped countries around the world and bring jobs and opportunities to raise people out of poverty.

The announcement comes after the meeting of the G7 in June 2021, where the members had agreed to launch an infrastructure partnership to meet global infrastructure development needs and will build off of the success of the 2018 EU-Asia Connectivity Strategy. The EU announced on December 1, 2021, that it will direct €300 billion equal to $340 billion to public and private infrastructure investments over the next 6 years through 2027.

Global Gateway Projects

With the announcement of the Global Gateway Strategy, the EU has also laid out how it will divide the money into different sectors such as digital, transport, energy and health. In a press release from the European Commission, it is written that the Global Gateway will “boost smart, clean and secure links in digital, energy and transport and strengthen health, education and research systems across the world.” Europe is also hoping that the Global Gateway will help improve its strategic interests and most importantly boost its supply chains which Europe noticed the instability throughout the COVID-19 pandemic. The plan will focus on providing physical infrastructure such as “fibre optic cables, clean transport corridors and clean power transmission lines.”

EU’s Global Gateway Strategy vs. China’s Belt and Road Initiative

Although the official announcement of the Global Gateway did not mention China or its economic development plan called the Belt and Road Initiative, this new deal comes into direct competition with China’s economic development plan which critics question for forcing already underdeveloped countries into unsustainable levels of debt. Further, the EU’s version will provide financing for countries “under fair and favorable terms in order to limit the risk of debt distress.”

How China’s Belt and Road Initiative Works

China’s Belt and Road Initiative focuses mainly on offering assistance to foreign countries in the form of loans and thus the loans are the only way the countries can improve their infrastructure. Compared to the EU’s $340 billion plan, China plans to spend up to $1 trillion for its plan, which began in 2013. The projects approved with funds from the Global Gateway must support high standards to keep workers safe and properly paid for their work. The money for the plan will come from the European Fund for Sustainable Development Plus. This can provide €40 billion guaranteed while giving grants up to €18 billion through external programs.

How the Global Gateway Works

The Global Gateway is bringing together the EU and its member states with financial and development institutions such as the European Investment Bank (EIB) and European Bank for Reconstruction and Development (EBRD) while also mobilizing the private sector to create an even larger impact. In addition to financial contributions for projects, the EU will also offer technical aid to their partners to enhance their ability for credible projects. The Global Gateway will provide a much-needed option to countries that have limited choices for foreign economic development aid. In the case of Sri Lanka, it had taken part in China’s Belt and Road Initiative to build the Hambantota Port. However, when Sri Lanka turned out to be unable to repay its loan, China forced the nation to “hand over a majority stake and  99-year lease on the port to a Chinese firm.”

Conclusion

The EU’s Global Gateway is a necessary achievement for the advancement of progress for countries and their citizens around the world. This is a true achievement of the G7 and will go a long way in supplying sufficient projects and infrastructure to lift people out of poverty around the world. With the support of the European Union and its focus on lifting people out of poverty and competition building foreign countries, the Global Gateway should be able to aid in the reduction of poverty around the world.

– Julian Smith
Photo: Flickr

Irrigation Systems in AfghanistanIrrigation has been an integral component of agriculture since the Mesopotamian era with farmers around the world relying on irrigation methods to water vegetation. For economies that depend on agriculture to foster growth, having sufficient irrigation systems is very important. Accordingly, the improvements to irrigation systems in Afghanistan have boosted the economic standing of Afghan citizens.

Advancements in Bamyan Province

A decade ago, the Bamyan Province located in Central Afghanistan determined a need for irrigation upgrades after canals flooded villages and crops. To combat this problem, the Irrigation Restoration Development Project (IRDP) oversaw the renovations of canals in two Bamyan Province communities in 2009. Some of the rehabilitations included “lining the Balkhi canal bed and sides with concrete, installing metal gate valves at weak points prone to flooding” and building small footbridges at strategic points of the canal. According to IRDP Bamyan provincial manager, Amin Zaki, improving water management will “help rural farmers improve their livelihoods and raise their standard of living as a result.” Given that 90% of Bamyan’s citizens rely on agriculture, the benefits of the advancements rippled through the communities. The advancements help create economic and living improvements for “more than 600 households in the four villages —Foladi, Nawrozi, Qhazan and Sia Khar Bloq—served by [the] Balkhi canal.”

Dokani village farmers close to the Balkhi canal were even able to switch their dominant crops because of the irrigation upgrades. Instead of growing baghali beans, the farmers currently grow potatoes and wheat, which are higher-earning crops. Overall, more than 425,000 households profited from the IRDP renovations, and in future years, the organization is looking to tackle two additional water management projects in Bamyan.

Crop Improvements in Kabul Province

The Kabul Province also possessed poor irrigation systems, which caused disputes over water distribution. To make improvements, in 2017, the On-Farm Water Management Project renovated the 8-kilometer long Pazhak canal and the 3.5-kilometer long Qara Qhochi canal. The projects benefit hundreds of households by increasing the speed at which water reaches the farms, improving the maintenance process of the canals and enhancing crop diversity. Thus, farmers are using the benefits to farm more land and grow crops they previously did not have enough water to provide support. As this demonstrates, improvements to irrigation systems in Afghanistan are extremely important.

Recent Turmoil

After the United States withdrew troops from Afghanistan in 2021, the Taliban significantly expanded its power. According to CNN, the Taliban now controls “17 of Afghanistan’s 34 provincial capitals, all of which have been captured” in one week as of August 13, 2021. Some of the ramifications of the Taliban’s growing control include the removal of girls from school, forced marriages of women to Taliban fighters and horrific bloodshed in battle areas. Despite the economic progress made through improvements to irrigation systems in Afghanistan, the Taliban’s recent seizure of provincial capitals threatens the advancements.

Looking Forward

As food and fuel prices increase following the Taliban’s blockage of import routes and hundreds of families face displacement from their homes, Afghanistan’s economic and governmental stability is in question. While the past decade has demonstrated the positive impact a rehabilitation project can have on the Afghan people, continued aid from global leaders could help ensure that the country’s progress does not dissipate in the coming months.

– Madeline Murphy
Photo: Flickr

USAID’s Intervention in Sierra Leone
Sierra Leone’s decade-long civil war (1991-2002) commenced a humanitarian crisis that severed its relationship with the international community. The conflict decimated the country’s infrastructure, stinted its agricultural economy and killed over 50,000 citizens. At its end, the war left a legacy of destruction and bequeathed to its predominantly young citizens a highly underdeveloped economy with no strategy for reconstruction. As a result, for the last century, Sierra Leone has desperately needed economic aid for reconstruction to repair its infrastructure and stimulate economic productivity. In response, USAID has worked alongside Sierra Leone’s administration, granting foreign aid to help with development and poverty alleviation. Following USAID’s intervention in Sierra Leone, the country evolved and is slowly incorporating itself back into the international community. 

Infrastructural Development

Infrastructural development fosters steady trade and higher profits and enhances the economy. Consequently, it increases wages and results in a higher quality of life for people.

In recent years, the relationship between infrastructural development and poverty alleviation has become noticeable in Sierra Leone. In 2015, the United States Government’s Millennium Challenge Corporation gave the underdeveloped country $44.4 million to rebuild infrastructure, homes and highways. As a result, Sierra Leone has made significant strides, creating a network of highways as well as the Freetown Port, which could increase boat traffic by 30%. In 2021, the United States International Development Finance Corporation (DFC) also pledged to give $217 million for a new power plant in Freetown, “providing power generation to meet approximately 24 percent of projected electricity.”

With the help of foreign aid, Sierra Leone also published the “New Direction” manifesto, an infrastructure plan that will connect valuable mining belts through a series of roads and construct a new railway line through its provinces. Infrastructural development has also let Sierra Leone adopt humanitarian initiatives, evident in its establishment of the Ministry of Water Resources in 2013. Although the project has a pending deadline, it promises to provide 21,000 m3 of portable water, which will serve 420,000 citizens located in the East of Freetown communities.

Such initiatives will allow for trade efficiency and economic independence, which will augment Sierra Leone’s economy, alleviate poverty and let the government provide for its citizens. USAID’s intervention in Sierra Leone has resulted in infrastructural reconstruction initiatives, which will continue to fuel economic and social uplift.

Economic Productivity

To further assist economic growth, the United States invested $12 million for development in Sierra Leone’s agricultural sector, which accounts for 60% of the country’s GDP. These funds will let Sierra Leone buy the technology and equipment it needs to expand its agricultural sector onto previously uncultivated lands, which make up 75% of the country. Such an expansion would decrease the percentage (80%) of foodstuffs it imports from other countries and allow for further economic self-reliance. A thriving agrarian sector would also derive higher profits and provide the funds for higher quality fisheries, improved mining techniques and other large-scale business enterprises.

Overall, these economic developments, which USAID’s intervention in Sierra Leone spurred on, have positively affected its economy, which has increased 5.1% to a GDP of $4.2 billion. In 2016, labor employment grew to 2.472 million, contrasting the 1.985 million employed in 2004. Recently, only 4.47% of the total labor force did not have employment. These numbers hold a bright future for Sierra Leone’s economic productivity and, as such, promise to eradicate the poverty that has long plagued its borders.

Medical Institutions and Aid

USAID’s intervention in Sierra Leone has also involved disease relief by aiding the country’s medical sector. In 2014, an Ebola outbreak contaminated 14,124 Sierra Leoneans, killing 3,956 people. In response, USAID established the Pillar II activities and investments, where U.S. organizations and partners gave $2.4 billion to Sierra Leone’s government, and West African countries, to contain the fatal disease. Significantly, 60% of these funds went into Sierra Leone’s medical sector, effectively strengthening the country’s healthcare system and putting an end to the spread of Ebola. USAID continues to support Sierra Leone’s medical field, beginning the Strengthening Post-Ebola Health Governance (SHG) program in 2017, which gives healthcare services and establishes Village Development Committees (VDCs) to oversee health services throughout the country.

By helping improve Sierra Leone’s health services, USAID not only saves lives and neutralizes viral diseases but also contains them before they infiltrate the international community. USAID’s intervention in Sierra Leone has let the country prosper and move away from its dark past. Sierra Leone’s civil war ravaged its infrastructure and economy, while Ebola exposed the weakness of its medical sector. However, organizations such as USAID have significantly impacted reconstruction, thereby promising a brighter future for countries that have been long underdeveloped.

Although USAID’s intervention in Sierra Leone has proved beneficial, more progress is necessary. Funding from countries and organizations will be beneficial for Sierra Leone so that it can prosper well into the future.

– Jacob Crosley
Photo: Flickr

city planning and poverty reductionWhen Bogotá, Colombia, elected Enrique Peñalosa mayor in 1997, Mayor Peñalosa faced an uphill battle. Informal settlements, faulty public transportation and congested roads increased poverty and reduced the quality of life for Bogotá’s citizens. Mayor Peñalosa had a plan, though, and his success in fusing city planning and poverty reduction provides a blueprint for developing world mayors around the globe.

Bogotá’s Challenges in the 1990s

Bogotá faced many challenges as a city in the 1990s. With a lack of city planning, informal settlements dominated the landscape. Nearly 200,000 illegal water connections existed and only 60% of the population had access to the main sewer system. Fearing crime and the bustle of moving cars, many could not enjoy the streets on which they lived, with impoverished neighborhoods lacking accessible public spaces.

With these challenges, Peñalosa knew there was only so much he could do. He realized that in his one term as mayor, he would not be able to lift every citizen of Bogotá out of poverty. Thus, he decided to look at the implications of poverty. To him, development constituted a “better way of living, not being richer.” The lack of access to water, food, housing, transportation and green space, which the wealthy class enjoyed in plenty, constituted poverty, not just a low monthly income. By addressing those issues directly, Peñalosa could combine city planning and poverty reduction without aiming to increase wages.

Formalizing Informality

One of the biggest problems urban populations face in the 21st century is informality. As of 2019, according to the United Nations, nearly one billion people live in informal housing or slums. Informal housing commonly leads to community marginalization and decreased access to food and water distribution networks. Fortunately, city planning and poverty reduction strategies can rectify these situations, and, Peñalosa did just that.

During his tenure as mayor, Peñalosa formalized 322 neighborhoods and provided nearly 700 sewers for informal settlements, drastically improving the livelihoods of those living in these neighborhoods. Utilizing many city planning strategies, he also provided better transportation access so that those living in these neighborhoods could access the amenities of the wider city. His strategy of focusing on formalizing and connecting informal settlements rather than increasing wages allows for a greater return on investment as the wider access to the city will naturally boost the quality of life.

Sustainability and Public Spaces

Peñalosa entered his tenure as mayor with the goal of developing Bogotá around people and not cars. In a city where just about 30% of people drove cars, designing a city entirely around this vehicle would be illogical. He especially wanted public spaces suitable for the most vulnerable, the elderly and children, aiming to reduce poverty by increasing standards of living.

Peñalosa focused on three types of public spaces for reducing poverty. He first focused on a common city planning and poverty reduction strategy: transportation. In his tenure he built roughly 220 miles of protected bike lanes, opening up the streets to more than just cars. He also formalized the public transportation network to allow more equitable access.

His second strategy for city planning and poverty reduction covered educational space, building libraries and public schools to accommodate 200,000 new students. The educational infrastructure serves as one of the most important tools in fighting poverty and boosting literacy.

Third, he focused on leisure spaces, ordering the construction and restoration of public parks. Access to these three spaces combined —  transportation, educational facilities and leisure spaces — can greatly reduce the impacts of poverty. Furthermore, the public status of these amenities meant that access would not depend on an individual’s wage.

Implications for Fighting Poverty

Mayors around the world can use Peñalosa’s tenure as a blueprint for their own cities. The strategies for city planning and poverty reduction that Peñalosa used were innovative at the time, but further research has shown their efficacy worldwide. Formalizing informal areas and expanding green space has become a norm for urbanists across the globe. While not without its flaws, Peñalosa’s strategy to combine city planning and poverty reduction helped fight poverty by focusing on raising living standards rather than pure income measurements.

– Justin Morgan
Photo: Wikimedia

mega ports in Morocco
Morocco’s geographic location gives it an advantage when it comes to developing the country’s economy. Morocco borders the Mediterranean Sea to the north and the Atlantic Ocean to the west, making it the closest African country to Europe. Mega ports in Morocco are among the many infrastructure developments that are revolutionizing the country as Morocco proceeds to build and expand its transportation infrastructure to connect the two continents.

Tanger Med

The Tanger Med port adopted its name from the port’s home city of Tangier in northwestern Morocco. Because of its important geographic location, Tangier has played a significant role in trade between Africa and Europe since ancient times.

The first site, known as Tanger Med 1, has two terminals. The first terminal started in 2007 after the King of Morocco, King Mohammed VI, laid the first stone in 2002. Following that, the second terminal started just one year later. Tanger Med 1 has a capacity of 3.5 million 20-foot equivalent units (TEUs). The terminals created 6,000 jobs at the port and an additional 70,000 jobs in the trade zone area.

After the establishment of Tanger Med 1, the King gave the order for a second container port, Tanger Med 2, with an investment of $1.5 billion. The port contained two more terminals, beginning construction officially in 2015. In the summer of 2019, Tanger Med 2 formally opened. Tanger Med became the largest port in the Mediterranean region, exceeding Valencia and Algeciras’ container ports with six million TEUs. Because of the outstanding performance of Tanger Med, the first of the mega ports in Morocco and the biggest in Africa, the government decided to build similar mega ports in other cities.

Nador West Med

Nador West Med is the second of the mega ports in Morocco. With almost half of its construction complete, the port will be fully ready by the end of 2022. The project will cost $13.8 million, consisting of new infrastructure and an industrial port.

The first phase of the Nador West port will include a 1,520-meter container dock for larger ships. It will also include a 600-meter dock for general goods to serve larger merchant ships. Furthermore, the Nador West Med port will have oil and chemical tankers, each able to carry approximately 170,000 tons.

New road construction will expand the route from six meters to nine meters and fortify the pavement. Nador West Med will have a tremendous socio-economic impact on the region. Once the port opens, it will reduce the unemployment rate with more jobs, allow for easy entry to the region and provide tax benefits for the country.

Dakhla Atlantic Port

Another port, the Dakhla Atlantic Port, will be built in Dakhla, located in a long, narrow peninsula in the southwest of Morocco. In 2020, the King announced significant investments that will cover the southern region of Morocco, including a mega port in Dakhla. This port will enhance many sectors such as fisheries, mining, energy, tourism and agriculture, processing approximately 2.2 million tons of goods yearly. With a cost of roughly $1.1 billion, the port will elevate direct commerce between Africa, Europe and the Americas following its completion in 2026. It will also include a space of 1,650 hectares for industrial and logistical services.

Certainly, mega ports in Morocco are boosting the country’s economy with a powerful presence in the region. Due to its strategic geographic location, Morocco’s ports allow the establishment of more investments and create a significant number of jobs. Moving forward, these mega ports should continue to bring many benefits for the country and the region.

– Zineb Williams
Photo: Unsplash

internet access in MoldovaMoldova is among the European countries with the highest poverty rate. However, it has made significant progress in reducing poverty since becoming independent from the Soviet Union, with the national poverty rate decreasing “from 28% in 2010 to 13% by 2018.” Furthermore, over the past two decades, Moldova’s GDP has risen by an annual rate of roughly 4.6%, largely due to consumption and the significance of remittances. Although COVID-19 has stalled progress in poverty reduction, potentially even reversing progress, there is hope for Moldova to get back on track to economic growth and advancement. Widespread internet access in Moldova may help the country strengthen and recover.

Small Country, Vast Internet

Despite the tiny country’s high poverty rate, internet access in Moldova ranks among the best in the world. Roughly 90% of Moldova’s population enjoys “superfast gigabit internet access.” While “the United States is twice as urbanized as Moldova, its gigabit coverage” reaches only 18% of the population. Only South Korea and Singapore, both much wealthier and more urbanized than Moldova, boast better coverage. The rest of the top 10 countries for gigabit coverage rank among the world’s 40 wealthiest nations globally. Meanwhile, Moldova ranks as only the 98th wealthiest nation in the world.

Since the dismantling of the Soviet Union in 1991, the international community has provided Moldova with grants and loans aimed at spurring economic growth and reducing poverty. The privatization of telecoms was a prerequisite in a developmental assistance offer from the World Bank in the late 2000s. To fulfill the condition, “a fiber optic cable was laid across” the Dniester River in 2009. Thanks to the new infrastructure, internet access became widespread as 99% of Moldovan communities were able to connect to the fiber optic network. Fiber optic cable also connects Moldova directly to Frankfurt in Germany, a major European digital hub.

Emigration and the Benefits of Connectivity

Moldova has high emigration rates —  as much as a quarter of the population live and work in Russia and other European countries, often illegally. As a consequence, Moldova is highly dependant on remittances. Many Moldovans working abroad purchase computers and send them to their families in Moldova for communication purposes. These communication methods require internet access, boosting the demand for internet access in Moldova even further.

Thanks to Moldova’s excellent internet speeds and connectivity, many countries have begun outsourcing IT and call center jobs to Moldova. Italy, in particular, outsources many jobs to Moldova because many Moldovans speak Italian as a second language. These outsourced jobs serve to ignite economic growth in Moldova, providing citizens with employment opportunities and a way out of poverty.

Internet Access and Poverty Reduction

The internet is recognized as a tool that contributes to the social and economic development of a country. Internet access aids in the “delivery of essential services such as education and healthcare.” Through the internet, people have access to remote job opportunities that were once out of reach. Furthermore, the internet not only expands people’s access to job opportunities but also creates a demand for jobs in the technology and engineering sectors.

According to the World Bank, increasing “internet penetration to 75% of the population in all developing countries” would contribute up to $2 trillion to their combined GDPs. Furthermore, this rate of penetration would generate “more than 140 million jobs” globally.

Widespread internet access in Moldova may help the country to bounce back from the COVID-19 pandemic. With the added assistance of international powers already investing in the country, Moldova can pick up where it left off and continue its trend of poverty reduction.

Courtney Roe
Photo: Flickr

Build Back Better World Initiative
Congress has been negotiating the size and scope of a domestic infrastructure bill for most of Joe Biden’s presidency. Still, action is necessary to further infrastructure abroad. The U.S. and its allies in the G7 recognize this need and have launched the Build Back Better World Initiative (B3W) to address global infrastructure challenges. A closer look at the initiative provides insight into the state of infrastructure in low and middle-income countries around the world.

The Infrastructure Gap

Infrastructure connects people and goods, which allows economies to scale and grow. Forming highways, ports, bridges, railways, pipelines, sewage systems and more, infrastructure projects are vital for transport, communication, energy and health. Infrastructure projects are the foundation of economic development and are vital to the Sustainable Development Goals (SDGs), including universal access to water and electricity. 

Infrastructure projects are also important for developing nations because the projects can be a major source of employment, spurring economic growth and allowing workers to gain new skills. The White House currently estimates that the infrastructure needed in low and middle-income countries globally totals more than $40 trillion.

Infrastructure gaps are significant because the gaps hinder economic growth. According to World Bank research, “Every 10% increase in infrastructure provision increases [economic] output by approximately 1% in the long term.” In other words, spending on infrastructure grows an economy. Further, as environmental challenges continue to threaten nations around the world, the World Bank says that even small investments in climate-resilient infrastructure can save trillions of dollars in recovery efforts.

The Build Back Better World Initiative

Partnering with G7 nations, the U.S. launched the B3W to alleviate some of the problems associated with infrastructure gaps. The White House will look toward not only its allies but the private sector for hundreds of billions of dollars in funding for infrastructure investment. The administration says that it will leverage partnerships with the private sector because “status quo funding and financing approaches are inadequate” to meet the size of these challenges. 

The focus for projects is four distinct areas, including climate, health, digital technology and gender equity. The aim is to reach all around the world with different partners, but, USAID and other U.S. development groups will take leading roles. However, there is still an understanding that local needs will be a priority, as “infrastructure that is developed in partnership with those whom it benefits will last longer and generate more development impact.” 

The Biden administration has stressed the importance of good governance in foreign assistance and has already noted the importance of using B3W as a way to encourage full transparency with monitoring tools, common contracts and metrics for evaluation.

The Build Back Better World Initiative and US Interest

Foreign assistance supports U.S. strategic interests, which is why Deputy National Security Advisor for International Economics Daleep Singh has indicated support for the initiative. In recent years, especially when the U.S. has taken a step back from foreign affairs, China has accelerated spending on global infrastructure with the Belt and Road Initiative. 

However, Singh indicates that the point of the initiative is not to inflame hostilities or work as an anti-China group but rather to provide an alternative to Belt and Road financing. The goal is to “rally countries around a positive agenda that projects our shared values.” B3W supports U.S. interests by providing an alternative and showing that the U.S. is once again ready and willing to be a good partner for the world.

With Congress working on a domestic infrastructure package, it is important to not lose sight of the critical need for sustained and significant investment in infrastructure around the world. Infrastructure projects connect the world, making it safer and healthier. Funding infrastructure around the world as part of the Build Back Better World Initiative aligns with U.S. strategic interests. Hopefully, this initiative will encourage bridging gaps and becoming a more connected world.

– Alex Muckenfuss
Photo: Flickr

Impact of COVID-19 on Poverty in the Philippines
One cannot say enough about the impact SARS-CoV-2 or COVID-19 has had on the Asian continent. Claiming the lives of some 3 million globally and infecting close to 140 million people around the world, the COVID-19 pandemic has affected the entire world. With the Philippines being among the first to witness the brunt of the virus, the impact of COVID-19 on poverty in the Philippines has been significant. After imposing lockdown measures in mid-March, President Duterte of the Philippines has maintained an iron hand of control as numbers have continued to rise.

The Impact of COVID-19 on Poverty in the Philippines

The resulting lockdowns due to the virus have created a significant downturn in the job market, thus exacerbating the impact of COVID-19 on poverty in the Philippines. At the beginning of the pandemic, the Philippines’ unemployment rate hovered around 5%, but it has now worsened due to lockdown measures. According to the Philippines Statistics Authority, unemployment rose to 17.6% in April 2020 due to the COVID-19 pandemic. Moreover, it is a figure that could rise as lockdown measures continue, leading to increased levels of poverty and hunger.

As a result of increased unemployment, poverty has risen, with expectations determining that almost 3 million Filipinos would enter poverty by the end of 2020. The impact of COVID-19 on poverty in the Philippines is temporary but the right measures and lifting lockdown measures as rates and vaccinations roll out could alleviate it.

Infrastructure Projects in the Philippines

While rising poverty rates, increasing hunger levels and stagnating GDP have been common for industrializing countries in this pandemic, the Philippines sees the woes as potential wins, opportunities to flip its eager human capital into a kickstarter for economic growth. Vivencio Dizon, the Presidential Adviser for Flagship Programs, said that “Infrastructure, a neglected aspect of the Philippines represents an opportunity for the country to reclaim some of its lost economic potential.”

Duterte’s government has reviewed almost $80 billion worth of physical infrastructure projects. Many government officials in the Filipino government are confident that these projects will help mitigate the impact of COVID-19 on poverty in the Philippines as many are looking towards the future. One of the projects is the “Build Build Build” program, a project that will involve building infrastructure across the Philippines. A combination of over 20,000 smaller infrastructure projects like the construction of airports, roads, seaports, hospitals, administrative centers and more will demand both highly skilled and low skilled labor to coordinate and enact and oversee construction projects across the rural and urban areas in the country.

Looking Ahead

Despite the impact of COVID-19 on poverty in the Philippines, the country’s infrastructure projects may help provide employment to its citizens. Through the implementation of the “Build Build Build” program, the Philippines may find its way on the road to economic recovery.

– Alex Pinamang
Photo: Flickr

Nigerian InfrastructureNigeria is located in West Africa and shares a border with Niger to the north and the Atlantic Ocean to the south. The hundreds of different languages spoken in the country characterize its diverse population. The country benefits from a relatively large population and economy but it still has a high poverty rate. Reducing the poverty rate will require better Nigerian infrastructure that will expand the economy to reach the countries rural population.

4 Facts About Nigerian Infrastructure

  1. A public-private partnership is the core strategy. The government has acknowledged the importance of private sector help to reduce the infrastructure deficit which has been a thorn in the side of an economy that shows immense potential. The Nigerian vice president, Yemi Osinbajo, clearly outlined what the government believes the role of the private sector should be as it pertains to improving Nigerian infrastructure. He pointed out that the private sector, which accounts for 92% of the country’s GDP compared to the public sector accounting for a mere 8% of the GDP, shows the limits of public expenditures and budgetary allocations. Osinbajo says it could require $3 trillion over 30 years in infrastructure investment to resolve the infrastructure deficit. Osinbajo included that the country would see a lot of benefit from large investments from the private sector whether it be from local or foreign resources.
  2. The president is promoting private investment in infrastructure. President Muhammadu Buhari of Nigeria recently approved the creation of a new development firm called Infra-Co, which will be backed by an infrastructure fund worth $2.63 billion. The hope is to improve the transportation and power networks that have held back the 40% of Nigerians living below the poverty line — a staggering number for a country that boasts the biggest economy and population in Africa. It has been reported that KPMG will serve as the transactional advisor to the fund which further legitimizes the government’s plan to boost Nigerian infrastructure through partnership with the private sector.
  3. Nigeria is investing heavily in railway construction. The construction of the Lagos-Ibadan rail created history in West Africa as being the first double-track standard gauge rail in the region. The Lagos-Calabar railway is another large project costing $11 billion and running 1,400 kilometers long, which connects the western and eastern parts of the country.
  4. Other key infrastructure projects. Other infrastructure projects in Nigeria include the World Trade Centre, the Lekki Free Trade Zone and the Abuja Gateway Airport. The World Trade Centre and Lekki Free Trade Zone will create more business opportunities for foreign and local investors and increase tourism and entertainment. It will also boost commercial and residential real estate development. The Abuja Gateway Airport will be an architecturally appealing addition to the Abuja Airport. Its design will include features that symbolize the countries diverse culture. The use of solar power, green roofs and locally made laterite clay will help contribute to an environmentally friendly and modern design. All three of these projects seem to be an attempt to bring about more economic opportunities by making Nigeria’s richest cities more welcoming and luxurious for foreign investors.

The increased business opportunities created by the heavy investments in Nigerian infrastructure will significantly help the economy. The railways will allow more Nigerians across the country to work better jobs in wealthier cities such as Lekki city. But, the infrastructure spending still needs to expand to the country’s rural parts so that every Nigerian can be involved in the rapidly growing economy. Nevertheless, Nigeria is making developmental strides and its rapid economic progress should be viewed as a success.

Stephen Blake Illes
Photo: Flickr

The North-South Expressway
Vietnam has experienced incredible economic growth since its reforms in 1986. Over three decades, these new economic policies have resulted in an explosion of economic activity and a slash in the rate of poverty. However, Vietnam’s transportation infrastructure is woefully behind many other developed economies. The government responded to this need by creating a nationwide connectivity project, the North-South Expressway.

The Infrastructure Issue

Vietnam has inadequate transportation networks and requires development and investment. Empirically, Vietnam’s 2020 target goal of $27 billion for public investment, mainly dedicated to transportation infrastructure, shows this. The country’s transportation needs have steadily risen since the economic reforms. Road usage in Vietnam has been on an incline with congested streets and car accidents constituting Vietnam’s hidden epidemic. However, transportation investments have lagged behind. An increase in funding is necessary for the country to reap the benefits of efficient transportation.

The North-South Expressway

The North-South Expressway is the solution to this transportation problem. The $17.9 billion project looks to connect all of Vietnam from Lang Son to Ca Mau. The road system will be an expanse of 1,811 kilometers with a toll collection system and a smart traffic system. Travel to important tourism sites, economic zones and other transportation areas will now be feasible with the new expressway. This high-speed travel throughout diverse geographical regions will revitalize the country’s transportation infrastructure. For the first time in Vietnam’s history, the country will be well connected.

Unfortunately, the central government has run into issues with financing the project. Originally, the government split the project into 11 sub-projects, with five being a public-private partnership (PPP). However, only three of the five received financial backing; the remaining two had no investor bids. The government then changed the two unfunded projects to public projects. However, the government’s ability to finance the project on its own is uncertain. The much-needed outside investments have proven hard to obtain. The project itself is attractive but legal ambiguity within the country causes caution and concern in investors. As such, Vietnam’s government has been spurred into implementing new legislation.

Public-Private Partnership Law

The Public-Private Partnership Law (PPPL) aims to fix the legal barriers preventing the execution of The North-South Expressway. The PPPL will be in effect as of January 2021. The law will clarify the process of investing in Vietnam by creating standard form contracts and government guarantees of project fulfillment. The law will also enforce proper foreign currency payment from foreign investors and the use of a risk-sharing mechanism. Essentially, the PPPL elevates and integrates the previously passed laws, decrees and circulars that regulated PPPs into one authoritative law. It will make private and foreign investment in government-sponsored infrastructure projects simpler, less risky and more appealing.

The Light at the End of the Road

Improving transportation networks will have a profound impact on Vietnam. It will increase economic activity through improved connections between consumers and producers and decrease transportation costs. The World Economic Forum estimates a 5% to 25% economic return on every dollar that goes toward infrastructure, such as transportation. More succinctly, developed roads lubricate the flow of goods and people across regions, which increases economic activity.

Additionally, developing transportation networks directly affects society’s most impoverished members. Areas with little economic opportunity would become connected to vital economic centers. As a result, connectivity to social services, such as health care and education, would increase along with economic and social mobility. The economic rewards are well worth the financial investment into transportation infrastructure. The North-South Expressway — with the help of the PPPL — indicates significant poverty reduction for Vietnam in the near future.

Vincenzo Caporale
Photo: Flickr