As the world's population continues to grow, more and more countries are beginning to realize the importance of improving infrastructure. The 2012-2013 Global Competitiveness Report repeatedly cites infrastructure as the single biggest hindrance to doing business in India, well ahead of corruption and bureaucracy. To address the needs of urbanization and global business, governments around the world are spending large amounts of money on infrastructure projects.
Emerging markets are looking to upgrade transportation and water systems. For example, China will spend an estimated $368 million on the Hainan power grid project, which will link the southern island of Hainan to mainland China. India, which already has one of the world’s largest road networks, plans to develop 35,000 km of highway by 2014 in order to support the country’s rapidly growing population. In northeastern Brazil, the people are suffering from the worst drought in half of a century, and therefore, the government is planning to divert water from the São Francisco River into a 297-mile network of canals, which would serve 12 million people across cities and farms in four states.
While emerging markets are adding new infrastructure, developed countries are dealing with the problem of limited funding capacity for replacing aging infrastructure. Europe is well-known for its impressive railroad systems, but some of its public transportation systems have become outdated. The UK government has set an ambitious agenda to improve its public transit system, but finding enough funding stands in the way of full execution.
Overall, improving infrastructure is one of the most important challenges for countries to overcome, but having sound infrastructure in place can give a country a huge advantage in the global marketplace. To find out more information about global infrastructure, check out the new globalEDGE newsletter!