G20 performance on infrastructure investment
Improving compliance with infrastructure commitments will require the G20 to engage the private sector, create targeted initiatives and introduce a regular meeting of infrastructure ministers
Although Brazil has not set infrastructure investment as a priority for the G20’s Rio Summit, the issue is implied by the themes of energy transition, sustainable development and global governance reform. Infrastructure investment is critical for Rio to achieve its goals on climate change, renewable energy and economic growth, alongside global governance institutional reform, by developing financing and support mechanisms for infrastructure development in emerging economies. This is a significant opportunity for Brazil, as G20 host, and for the Global South more generally to influence the global agenda. Addressing the financing gap is essential for sustainable, inclusive and resilient infrastructure, but also for addressing social inclusion and economic development, including a just energy transition.
Deliberation
Infrastructure is a constant topic at G20 summits, featuring in each communiqué since the start. At the inaugural summit in Washington in 2008, the G20 dedicated 30 words (1%) to infrastructure. Between
2009 and 2013, infrastructure accounted for between 0.2% and 6% per summit. A record was set at the 2014 Brisbane Summit, with 25%. Between Antalya in 2015 and Rome in 2021 it ranged between 4% and 9%. It hit another peak of 13% at Bali in 2022, but dropped to 5% at New Delhi in 2023.
Decisions
G20 summits have made 56 collective, politically binding, future-oriented core and related commitments on infrastructure. The first was at the 2014 Brisbane Summit, accounting for 14% of the commitments that year. Leaders made none at Antalya in 2015, 4% at Hangzhou in 2016, down to 1% at Hamburg in 2017 and further down to 0.8% in Buenos Aires in 2018 and 0.7% at Osaka in 2019. The figure rose to 3% at Riyadh in 2020, and levelled off at 2% at both 2021 Rome and 2022 Bali. The 2023 New Delhi Summit made no core infrastructure commitments and four related ones, on digital, health and climate-related infrastructure.
Compliance
The G20 Research Group has assessed nine of the 56 infrastructure commitments for compliance by G20 members. The first commitment analysed was from the 2014 Brisbane Summit, the year the Global Infrastructure Initiative launched. Brisbane achieved 98% compliance. In 2016, two commitments were assessed, averaging 48%. Compliance for 2018 jumped back up to 83% and again for 2019 to 93%. Three commitments from 2020 were analysed, dipping to 58%. Compliance spiked again to 88% for 2021. No infrastructure commitments from 2022 or 2023 have been assessed.
Causes and corrections
Based on this performance, the G20 can improve its compliance with its infrastructure commitments in several ways.
First, it should focus on the private sector. G20 commitments that refer to the private sector average 85% compliance, compared to 68% for those that don’t.
Second, the G20 should develop an initiative or communiqué that addresses infrastructure investment and its financing gap. The effectiveness of such supplementary documentation in G20 summits is evident in the case of the GII from the Brisbane Summit, where the commitment had the highest compliance on infrastructure to date at 98%.
Third, on other issues on the G20 agenda, there is a positive correlation between holding relevant ministerial meetings and achieving high compliance. The G20 should launch – for the first time – a regular meeting of ministers responsible for infrastructure, in addition to the working group meetings. Infrastructure is naturally interconnected across subjects and could benefit from an agenda that outlines infrastructure-specific priorities, including infrastructure investment explicitly.
Conclusion
G20 leaders at Rio should focus on three key areas.
The first is sustainable and green infrastructure development. Against the backdrop of climate change, the G20 should prioritise investment in renewable energy infrastructure, such as solar, wind and hydro projects. Given Brazil’s particularly rich natural resources and existing expertise in hydro, it can offer leadership to pioneer the energy transition towards climate change mitigation and adaptation for sustainable development. The investment priority should also include valuing climate-friendly infrastructure, to promote climate resiliency.
The second is financing. Brazil can lead discussions on innovative financing products, such as green or climate bonds, which can contribute to financing large infrastructure projects. By leveraging these financial instruments, the financing gap can be bridged by directing global capital into fundamental climate-resilient development initiatives.
The third is digital infrastructure. To reform global governance institutions in this digital age, it is also vital to expand digital infrastructure, notably in developing countries. To promote this inclusive strategy, G20 members should invest in infrastructure to help bridge the digital divide. Important digital infrastructure includes 5G network infrastructure, broadband access and smart city technologies. With an emphasis on these investments, Brazil’s G20 can contribute to economic growth with social inclusion.
