In its final statement for the G20 Finance ministers and central bank governors, the T20 acknowledged that 2021 ‘marks a turn in the rich history of infrastructure investments and financing issues within the G20, in a time of more complex crisis than 2008.’
As ‘the recovery of economic activity remains highly divergent across and within countries and exposed to downside risks’ it is tempting to regret the G20 Finance Ministers and Central Bank Governors paid too little attention to the substantial novelty introduced by the T20 and instead preferred to support roadmaps, guidelines, and tools largely developed prior to the Covid-19 crisis. While the T20 has managed to demonstrate through over a dozen policy briefs how infrastructure investments could contribute to system change towards a new sustainable economy and balanced recovery, the G20 Finance track has merely ‘taken note’ of the G20 High Level Conference on Local Infrastructure Investment organized on the 27th of September 2021 in Genoa. While over €12 trillion of relief and recovery plans have been issued across the globe, exploring new directions is no small stake.
It is not just the group of think-tanks. The G20 Science engagement group (S20) has acknowledged that current and future responses to pandemic (and other) risks are ‘constrained by knowledge and technological asymmetries, infrastructure, culture, and politics’. The Social Science and Humanities engagement group (SSH20) has also highlighted that ‘worldwide interdependence by itself does not guarantee resilience’. The engagement group of the global business community (B20) has been even more straightforward in its final communiqué calling to ‘enhance investment in sustainable infrastructure and urban regeneration.’
The converging recommendations and the shared sense of urgency among key G20 engagement groups with constituents from very different backgrounds points to new solutions across immediate and longer-term initiatives, with infrastructure playing a critical role.
Throughout 2021, Italy’s G20 Presidency has supported the development of interactions among engagement groups and leading institutions. From the virtual High-level Conference on Public-Private Infrastructure Investment in June to the T20 Financing Sustainable Infrastructure Roundtable in Turin and the High-level International Conference on Financing infrastructure for Recovery held in Rome in September, the D20 Long Term investors club, with institutions such as the Cassa Depositi e Prestiti (CDP) has also played an active convening role. The joint communiqué of the D20, B20 and T20 issued late September in Rome was the first of its kinds in the G20 context, emphasizing the conditions for long-term sustainable growth and some corresponding mechanisms.
We can only second the proposal of creating ‘a permanent dialogue mechanism across the G20 on infrastructure investment to support the recovery’. Infrastructure investment is becoming one the main drivers for geopolitical and economic competition, with tensions and risk factors redoubled by the socio-economic impacts of the Covid-19 pandemic and the worst economic recession since the end of World-War II. Such a concrete approach to system transformation and recovery ‘from the bottom-up’ including sub-national governments and cities in global efforts to achieve inclusive and affordable low-carbon infrastructure is a novelty. It is also triggered by necessity, as illustrated by the latest available research such as from the European Investment Bank (EIB) or OECD, with the B20 going as far as calling for ‘coordinated projects of urban and suburban regeneration’.
Working at the cross-roads of global supply and value chains, digitalization, and land-management, the future of work and ecosystems, agendas and regulatory environments is also the main thesis of Intersecting. This global editorial, research and policy project was launched during the Covid-19 pandemic by the Global Solutions Initiative (GSI) and GIZ, joined by the Asian Development Bank Institute (ADBI), the center for social and economic research at the University of Indonesia (LPEM FEB UI), OP Jindal University in India. Over two dozen leading universities and research centers such as the Fondazione Bruno Kessler in Trento, the Oxford PEAK program, the New School in New-York, the Moscow University of Transportation (MIIT) or RIS in New-Dehli, have also contributed to the program, which will explore issues of resources and circular economy, the future of work and creative economy and the future of multilateralism and south-south and triangular cooperation, till 2024.
The gaps between the results of the cooperation among think-tanks and other engagement groups and financial institutions on the one hand and the final recommendations of the G20 Finance ministers after their meeting in Washington DC mid-October on the other hand, might not be as worrying as it looks.
There is no easy way out of a decade of institutional efforts to recover from the 2008 crisis through monetary policies and mechanisms such as the Financial Stability Board which the pandemic economic consequences have disrupted. There is no easy way out of a decade of underinvestment in social infrastructure across the globe. On the contrary, intersecting the mobilization of capital markets for sustainable data and infrastructure, resilience, urbanization and social infrastructure, offers many possibilities of renewing global local and cross-border policy frameworks to meet people expectations and a hunger for social and environmental justice and equitable welfare.
For instance, moving towards a G20 Pact on Sustainable Urbanization that would build on the outcomes of the Italian G20 presidency in the fields of infrastructure, climate and energy, culture and development, and supplement the United Nations Secretary-General initiative on the future of cities could meet both the needs to sustain demographic growth in major emerging economies and address system change opportunities globally. This should also broaden the perspectives of a future pandemic preparedness treaty and address a major failure of the New Urban Agenda adopted in 2016 and silent about infectious diseases and pandemic risks.
The joint meeting on Infrastructure investment and financing of the Italian and Indonesian T20 related taskforces November organized in the aftermath of the Rome G20 Leaders’ Summit is a good indication of possible areas of progress through continuous cross-cutting dialogues on infrastructure and development in the G20, which should henceforward also prevail in conjunction with the German and Japanese presidencies of the G7/T7 in 2022 and 2023.
Nicolas Buchoud is President of the Grand Paris Alliance for Metropolitan Development and Co-Chair of the T20 TF7 on Infrastructure Investment and Financing.