Rye Country Day School
High School Student
Globalization through technological innovation and trade agreements has beckoned an unprecedented potential for prosperity in the modern world. This potential is most significant for the developing world, where support from international communities can improve standards of living and spark sustainable economic growth. However, the benefits of globalization are most often felt in high and middle income countries, where investment is seen as less risky and return on investment more likely. At the crux of low standards of living, polarity of economic wealth, and hampered economic growth in developing countries is infrastructural deficiency. So, during this 21st century I hope to see the expansion of infrastructure development efforts in developing countries.
The scale of the problem that poor infrastructure creates is too extreme for many citizens of high income countries to fully comprehend. According to the United States Agency for International Development estimates, 2.6 billion people in the developing world do not have access to electricity. Almost 800 million lack access to water, and close to 2.5 billion lack access to basic sanitation. Only about 20% of people in developing countries have internet access. The University of Bonn’s Center for Development Research expands upon these figures, estimating that only 70% of the population in developing countries have access to an all-season road (the situation is even more dire in Africa, where only 33% of the population lives within two kilometers of an all-weather road). According to Germany’s international news source Deutsche Welle, thirty African countries experience regular power outages. Indeed, the breadth of the infrastructural issues the developing world faces makes it difficult to fathom how there could be a solution.
The urgency for a solution is great as well. Every year, the infrastructural gap grows between developing countries and high income ones, exacerbating future efforts to solve the problem and steepening the price tag for effective projects. The issue should not be seen as one that should be solved when high income countries have regained comfortable stability from the tremors of 2008 – by then, it could already be too late. Past economic crises and recessions have proven to be cyclical events that have been resolved though policy adjustments and market forces and need not impede the secular drive to further develop infrastructure in underdeveloped regions of the world.
The benefits of infrastructure investment are significant. First, the multiplier effect of projects strengthens economies and raises the standard of living. Infrastructure projects create jobs and provide stimulus to struggling economies, much like FDR’s New Deal did in post-Depression America. Further, infrastructure projects often require follow up projects to expand the new network, multiplying the amount of jobs created and extending wealth into suburban areas. Second, proper infrastructure investment can help the developing world avoid the fiscally cheap but environmentally costly energy sources that have induced climate change. Wind and solar power have become possible partial solutions. Twenty-first century developing countries can learn from the mistakes of 20th century superpowers; with proper financing, developing countries need not rely on dirty coal and fossil fuels. Though the cost upfront may be greater, the net cost of climate change and environmental damage if the proper infrastructure is not implemented dwarfs the upfront cost. Third, better infrastructure means more trade. According to Calestous Juma, Professor of the Practice of International Development at Harvard Kennedy School, nearly half of the hungry people in Africa are farmers. With irrigation, roads, and networking, farmers relying on antiquated subsistence can reach new customers on an international scale and grow their wealth. Infrastructure growth would do well to lessen economic inequality in developing countries.
All of the benefits listed above are not points of contention. If there were no barriers to financing projects, the problem would be solved already. But the barriers to funding infrastructure projects are the greatest obstacle for feasible prosperity. According to the Centre for Climate Change Economics and Policy, investment in infrastructure will need to increase from approximately $0.8-0.9 trillion per year currently, to approximately $1.8-2.3 trillion per year by 2020. This is an enormous request; few developing countries can afford to work toward that target now, and private sector and international help runs the risk of spiraling debt. The biggest share of infrastructure investment is domestic and is paid for by “user fees” or taxes. Countries seeking to invest in projects run the risk of overburdening their populace with taxes, precipitating an economic collapse before the economic benefits of improved infrastructure can be felt. Indeed, the financing of infrastructure is a complex balancing act.
The solution is a unified effort by the developed world to aid the developing world. Efforts have already been made by high income countries, most prominently China, to invest in infrastructure growth in African and mid-Asian countries. According to the World Bank, China is the biggest financer of infrastructure projects in Africa. According to George Fang, China head of mining and metals at Standard Bank, “China is adding infrastructure capacity to link resources in countries as diverse as Mauretania, Sudan, DRC, Cabon, Angola and Zambia.” The United States has also been involved in infrastructure projects, namely the construction of South Sudan’s first power plant in 2011. These efforts may be too small to combat the grand scale of infrastructure needs. I hope to see a coalition of wealthy and well established nations create a multilateral infrastructure plan in developing countries. Foreign direct investment can be paid back by the incredible gains that will be had if the job is done right. Once developing countries have the foundation necessary for sustainable growth, they can also pay back the original investors in trade tariff exclusions. A multilateral cooperative effort by wealthy countries to beckon economic prosperity throughout the world would contribute to camaraderie between rival nations (like China and America) and lead to long term growth to the benefit of posterity. The hour has come for nations to act as a global community and not solely as preservers of their own national interests. I am sure we would find that global coordination to combat an issue like infrastructure deficiency is certainly in the long term national interest.
Too often is America the subject of foreign disdain. We are the most powerful country in the world, with the largest economy and military. Our 20th century was one of economic growth, militarization, and global leadership in the interest of freedom. Adhering to our national progress, I hope that the 21st century is one of active global leadership; not just American growth, but global growth. I hope to see America act in concert with other economic powers to achieve something for the benefit of all peoples. Efforts to establish sustainable infrastructure that is resilient to climate change and sparks an era of growth in developing countries would brand us once again as international leaders; a country for the pursuit of happiness for all.