Queensland police patrol near the Brisbane Exhibition
Brisbane - AFP
The world's top development banks on Thursday threw their support behind G20 plans for a global infrastructure hub to spur growth and create jobs, saying it is key to helping tackle poverty.
The Group of 20 of the world's biggest developed and emerging economies agreed in September to establish the Global Infrastructure Initiative, expected to be based in Sydney, to share information about matching investors with projects.
Its main purpose is to cut red tape and close the "information gap" between potential investors and infrastructure projects as the G20 looks to spur world economies by shifting from government-led growth towards private sector-led growth.
It was welcomed in a joint statement by the African Development Bank, Asian Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the Inter-American Development Bank, the Islamic Development Bank, World Bank and IMF.
"We stand ready to bring our experiences and skills to the G20's work on infrastructure and to support a proposed new global infrastructure hub," they said ahead of a G20 leaders' meeting in Brisbane this weekend.
"Infrastructure is key to tackling poverty and promoting inclusive growth. Well-functioning infrastructure is essential to overcome bottlenecks to growth in emerging and developing economies, and as an enabler of private sector led growth.
"No country has developed without access to well-functioning infrastructure," they added.
"At a time when the outlook for global growth is disappointing, investment in infrastructure can play an important role in boosting short-term demand, as well as bolstering longer-term supply capacity."
The multilateral development banks provide over US$130 billion of financing for infrastructure annually, and said they were developing new platforms to mobilise private finance on a larger scale through regulatory reforms.
The needs are immense with the funding shortfall for infrastructure projects in emerging and developing economies broadly estimated at over US$1 trillion per annum.
"It is vital that we -– the multilateral banks –- work together to address the US$1 trillion per year infrastructure financing gap in developing and emerging economies," World Bank president Jim Yong Kim said in emailed comments to AFP.
"Our combined resources, experience and financing instruments can make a huge difference in closing the gap.
"We can make a significant contribution to reducing poverty and boosting shared prosperity, if we are to mobilise this enormous untapped capacity, to help build a credible pipeline of viable and bankable projects in emerging markets and developing economies."
The hub has been one of Australia's main proposals during its presidency of the G20 as the grouping looks to meet a two percent increase to its combined growth over five years through economic reform and infrastructure investment.
The push to raise private sector investment in infrastructure comes as many governments are reining in public spending in a bid to cut their budget deficits.