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Sustainable infrastructure as an opportunity for transformative change

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The challenges posed by global health, economic and climate emergencies transcend national boundaries and test collective capacities to deal with risks, build resilience, and reduce inequalities within and between countries. If governments and multilateral financial institutions are serious about sustainable infrastructure investment being intrinsic to a resilient recovery, the agenda for sustainable infrastructure and its financing mechanisms must be rooted in human rights and socioeconomic transformation and contribute to climate resilience, instead of being over-preoccupied with returns on private investments. This also implies a greater focus on the democratic governance of infrastructure.


Multilateral and bilateral investment agreements, as well as project contracts providing privately financed infrastructure often lead to the compromise of the governments’ human rights obligations and the obligation to regulate for public policy purposes and protect the population in relation to private investments. This became even more visible during the Covid-19 pandemic, even as death tolls rose exponentially, governments taking action to fight economic collapse were faced with hefty lawsuits by foreign investors.


While it is relevant to work with the private sector to deliver on the SDGs, mobilising private capital should not become a goal in itself. A narrow focus on financing gaps neglects the longer-term underlying structural issues in uneven global development, and do not cover the “other infrastructure gap,” which specifically refers to sustainability and human rights considerations. Numbers say nothing about what infrastructure is needed, by whom, and for what purpose. As the pandemic forced us to undertake a deep rethinking of current systems and policy choices that have not delivered on their promises, its learning can serve as an opportunity for transformative change. Infrastructure is rightly placed as central to strategies aimed at sustainable development and socioeconomic transformation. But the question of which development models it serves and leads to still has to be further explored.


If we embark on an exercise of collective imagination about what a future with vibrant local and regional economies, sustainable food production, public low-carbon transportation, equity and climate resilience looks like, we might conclude that an overreliance on mega-infrastructure projects and export corridors might not take us there. As part of this exercise, we may also recognise private investors’ search for quick returns might be incompatible with the type of infrastructure that bridges the present and the type of resilient and just future we want to build.


Perceiving sustainable infrastructure as a public good might entail considering types of infrastructure that actually serve to reduce countries’ commodity dependence. Depending on the context, it might mean infrastructure oriented towards regional integration or connectivity between rural small-scale farms and urban markets; it might be focused on long-term development impacts, transparency, public participation and accountability instead of focused on private profit. For this to be possible, at least three key elements have to be considered: fiscal and policy space, public investment, and industrial policies.


First, systemic solutions that address the barriers to domestic resource mobilisation by countries in the global south – including debt cancellation, international cooperation to address tax abuse and achieve tax justice, financial sector regulation and capital market controls – must be pursued. This will expand countries’ fiscal and policy space to finance sustainable infrastructure projects and can in turn contribute to economic diversification and industrialisation, leading to less dependence on aid and commodity trade.


Second, it is key to unlock public investment in infrastructure. This can be done by reclaiming the role of public development banks (PBDs). PDBs, particularly national and subnational institutions, can (and should) play a crucial countercyclical role in the financing of sustainable infrastructure projects. These institutions can tap into global and domestic financial markets to provide ‘patient’ capital that promotes strategic investments for economic development, such as infrastructure projects, or for projects that address social and ecological challenges, such as financing renewable energy and investing in agro ecological food systems. While PDBs should work with private investors, both as a source of capital and as a recipient of support, public policies and the public interest should prevail.


Third, it is imperative to promote sustainable infrastructure as part of broader industrialisation policies. After decades of neoliberal policies in developing countries showing few signs of delivering economic diversification, strong productivity growth or technological upgrading, and with many suffering a growing informalisation of economic activity, industrial policy began to return to the policy conversation. A diversified, dynamic, inclusive and sustainable industrialisation is at the very heart of socioeconomic transformation, without which the SDG agenda remains a patchwork of goals that do not address the financing means for self-sufficiency and self-determination.

Fourth, it is key to address the problems associated with private sector engagement in infrastructure projects, either in direct private sector-led projects or in PPPs. Private Investors can play a relevant role in infrastructure development, but mobilising them requires applying the right policy instruments. These have to be designed, implemented and monitored in the public interest, and regulated by the state, with transparency and democratic accountability at the core.


Compiled/reproduced by Samantha Abeywickrama based on a publication titled “Reclaiming Sustainable infrastructure as a public good” jointly published by Society for International Development and European network on debt and development.

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The views, thoughts, and opinions expressed in this article reflect the author’s views, and not the wider views of the Alliance for Sustainable Infrastructure.











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