Resource information
As the world recovers only slowly from
the 2008 financial crisis and Europe is facing a looming
debt crisis, concerns have increased that the "new
normal" -- a period of high unemployment, low returns
on investment, high risks, and low growth -- may become
protracted in advanced economies. If growth remains weak,
unemployment rates and debt levels will be slow to recede.
Consequently, the global recovery may continue to be fragile
for years to come. What the world needs now is a
growth-lifting strategy. This strategy could take the form
of a global infrastructure initiative. Since debt levels are
high, governments in the United States and Europe could
increase demand and support growth through investments in
bottleneck-releasing infrastructure projects that are
self-financing. An infrastructure initiative should,
however, go beyond the borders of advanced countries and
include developing countries. Economic and social returns to
infrastructure investments tend to be high in developing
countries, which have become increasingly important drivers
of global growth. At the same time, infrastructure
investments require capital goods, most of which are
produced in high-income countries. Scaling up infrastructure
investment in developing countries could therefore help
generate a virtuous cycle in support of a global recovery.
