Although measured optimism is in order for the 2023 New Delhi Summit’s infrastructure performance, further ambition and action-oriented commitments are needed to adequately address the global infrastructure financing gap
Mobilising infrastructure financing is key to unlocking socioeconomic development and advancing sustainable, inclusive growth. Infrastructure development has been on the G20’s agenda since the leaders’ first meeting, and has acquired renewed geopolitical sensitivity in recent years. For developing countries, overcoming the financing gap for sustainable, accessible, affordable infrastructure is an ongoing challenge. G20 leaders have thus called for private financing to complement public investment and the multilateral development banks’ support. They also consider the governance of the Global Infrastructure Hub and the complementarity of international organisations with infrastructure portfolios. India’s G20 presidency has further drawn attention to the global health infrastructure and digital public infrastructure for technological transformation. But how has the G20 performed on infrastructure development and how can it improve its performance at the New Delhi Summit?
G20 leaders first addressed infrastructure development at Washington in 2008, with 30 words for 1% of the communiqué. At the 2009 London Summit, leaders produced 113 words (2%). They only devoted 20 words (0.2%) at Pittsburgh in 2009 and 56 words (1%) at Toronto in 2010. At the 2010 Seoul Summit this surged to 919 words (6%). Subsequently, infrastructure consistently took up about 4% of the communiqué’s words through to 2013.
Then at the 2014 Brisbane Summit it soared to 2,245 words (25%). This pinnacle was followed by steadily declining proportions: 1,200 words for 9% at Antalya in 2015, 740 words (5%) at Hangzhou in 2016 and 1,349 words (4%) at Hamburg in 2017. There was a slight resurgence in 2018 at Buenos Aires with 718 words (8%), followed by a decline: 590 words (7%) at Osaka in 2019 and 343 words (6%) at Riyadh in 2020. This increased slightly at the 2021 Rome Summit, with 784 words (8%). At the 2022 Bali Summit, G20 leaders gave 1,306 words (13%) to infrastructure, a peak surpassed only at Brisbane in 2014.
The G20 made 51 collective, politically binding, future-oriented commitments on infrastructure development. The first came in 2014 at Brisbane, which made 28 commitments, for 14% of the commitments made that year. Subsequently, 4% of the commitments 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 commitments. At the 2021 Rome and 2022 Bali summits, 2% of commitments were on infrastructure.
The G20 Research Group has calculated that members’ compliance with the nine assessed infrastructure commitments averaged 70%, slightly below the 71% compliance across all subjects. Compliance on infrastructure has varied widely. In 2014 it was 98%, but decreased to 48% in 2016. It rebounded to 83% in 2018 and to 93% in 2019. The two assessments for the 2020 summit averaged 58% compliance, while the one from 2021 had 88%.
Causes and corrections
How can the G20 improve its compliance on infrastructure?
First, commitments involving the private sector or a specialised agent achieve higher compliance across all subjects. Commitments that refer to the private sector average 90% compliance. On infrastructure, the highest compliance came with the commitment on the G20 Principles for Quality Infrastructure Investment with 93% (although a similar commitment made in 2020 scored 70%, likely due to the diversionary shock of Covid-19). However, commitments on mobilising private sector resources for infrastructure financing averaged only 70% compliance. This suggests the need for further consensus on the specificity and method of private capital mobilisation for infrastructure investment.
Second, G20 commitments across all subjects achieve higher compliance when referring to a core international organisation in relation to implementing a G20 initiative or policy outcome. Institutional references situate G20 commitments in broader global debates and offer longer-term horizons than individual G20 presidencies. As G20 members deliberate the future of the Global Infrastructure Hub (established at the highest-complying 2014 Brisbane Summit), they should consider how its work can be embedded effectively in the landscape of infrastructure international organisations, which should work in coordination with one another.
Third, as part of the G20 finance track, the Infrastructure Working Group convened four meetings under India’s G20 priority of ‘Financing Cities of Tomorrow: Inclusive, Resilient and Sustainable’. Discussions have focused on mobilising subnational and municipal funding for sustainable infrastructure, operationalising the G20-endorsed Quality Infrastructure Investment Indicators, infrastructure as an asset class, infrastructure taxonomies and innovative methods of mobilising financial resources for infrastructure investment.
Further to these efforts, raising these issues to the ministerial-level for the first time under Brazil’s 2024 G20 presidency would improve the effectiveness of G20 infrastructure governance. The G20 Research Group’s findings show a positive correlation between same-subject ministerial meetings and higher compliance with summit commitments.
In all, although measured optimism is in order for the 2023 New Delhi Summit’s infrastructure performance, further ambition and action-oriented commitments are needed to adequately address the global infrastructure financing gap.