G20 performance on infrastructure for development

To improve its performance on infrastructure development, G20 leaders at their summit in Bali can make use of several measures, including producing a stand-alone document and making more references to the private sector

The issue of financing for infrastructure development is a priority of Indonesia’s 2022 G20 presidency and has been on the G20 agenda since the summit’s inception. The financing gap for sustainable, inclusive, accessible and affordable infrastructure is a long-standing global challenge, particularly for developing countries. G20 leaders established the Global Infrastructure Hub in 2014 and have called for mobilising private financing to complement public investment and support from multilateral development banks. Revitalising infrastructure development is also critical for a resilient and robust post-pandemic recovery.

Conclusions

G20 leaders first addressed the issue of infrastructure development at their first summit in Washington in 2008, with 30 words for 1% of the communiqué. At the 2009 London Summit, leaders produced 113 words (2%). G20 leaders did not devote significant attention to infrastructure at the following two summits, with 20 words (0.2%) at the 2009 Pittsburgh Summit and 56 words (1%) at Toronto in 2010. There was a surge at the 2010 Seoul Summit with 919 words (6%). Subsequently, infrastructure consistently took up approximately 3–4% of the communique’s words through to 2013.

The 2014 Brisbane Summit produced 2,245 words (25%). This pinnacle was followed by steadily declining proportions: 1,200 words for 9% at the 2015 Antalya Summit, 740 words (5%) at the 2016 Hangzhou Summit and 1,349 words (4%) at the 2017 Hamburg Summit. There was a slight resurgence in 2018 in Buenos Aires with 718 words (8%), followed by a decline: 590 words (7%) at the 2019 Osaka Summit and 343 words (6%) at the 2020 Riyadh Summit. At the 2021 Rome Summit attention spiked again to 1,232 words for 12%, a percentage surpassed only by the 2014 Brisbane Summit.

Commitments

The G20 has made 51 collective, politically binding, future-oriented commitments on infrastructure development. The first infrastructure commitments came at the 2014 Brisbane Summit, with a significant 28 commitments accounting for 14% of the commitments made that year. Subsequently, 4% of commitments made at the 2016 Hangzhou Summit were on infrastructure. At the 2017 Hamburg, 2018 Buenos Aires and 2019 Osaka summits, 1% or less of the commitments addressed infrastructure. Infrastructure accounted for 3% of the 2020 Riyadh Summit commitments. At the 2021 Rome Summit 2% of the commitments were on infrastructure.

Compliance

The G20 Research Group’s assessment of compliance with the seven assessed priority infrastructure commitments among the 51 total found an average of 78%. This is higher than the G20’s 71% compliance across all subjects. Compliance has varied widely each year. Compliance with the 2014 commitments was 98%, but plunged to 48% for 2016. It remained high at 83% for the 2018 Buenos Aires Summit and 93% for the 2019 Osaka Summit. The two assessments for the 2020 Riyadh Summit averaged 58% compliance. By June 2022, compliance with the one assessed commitment from the Rome Summit was already 88%.

Corrections

How can the G20 improve this compliance?

First, commitments that involve the private sector or a specialised agent have higher compliance. Commitments that refer to the private sector average 90% compliance. The highest compliance came with the commitment on the G20 Principles for Quality Infrastructure Investment with 93% (although in 2020 a similar commitment scored 70%, which is likely due to the diversionary shock of Covid-19). However, commitments that refer to mobilising the private-sector resources averaged only 70% compliance, slightly below the overall average.

Second, more attention to and agreements on infrastructure contribute to higher performance. The four highest complying summits, averaging 83% compliance, produced a total of 3,896 words on infrastructure and 33 infrastructure commitments. The three lowest complying summits, averaging only 63%, produced only 1,801 words and 12 commitments. Furthermore, the highest complying summit – Brisbane in 2014 with 98% compliance – established the Global Infrastructure Hub and produced a stand-alone document, the G20 Note on the Global Infrastructure Initiative and Hub. 

For success at Bali, G20 leaders should therefore give much more attention to infrastructure, including producing a stand-alone infrastructure document. They should make more infrastructure commitments that refer to the private sector and quality infrastructure to implement the G20 Principles for Quality Infrastructure Investment. They could further improve performance by including infrastructure in the preamble of their communiqué, including quantitative or chronological targets on resource mobilisation and collaborating with multilateral organisations.

The 2021 Rome Summit produced the second highest levels of G20 conclusions on infrastructure. The Indonesian presidency has hosted several Infrastructure Working Group meetings with an emphasis on post–Covid-19 development. Looking ahead to India’s 2023 presidency, the G20 should elevate these working groups to the ministerial level – an unprecedented gathering in the G20’s history.

In all, an optimistic forecast is warranted for the 2022 G20 Bali summit’s infrastructure performance.