G20 defends commitment to better infrastructure in Global South countries
At a meeting at the G20 House in Brasília, the Infrastructure Working Group established priorities for countries and cities, especially poor nations and those in the Global South, in facing global challenges in the region. By focusing on financing, poverty reduction and cross-border projects, the group highlighted infrastructure as a key element towards a more equitable and resilient future.
GT Coordinator Marden Barboza presented Brazil's priorities, and the guidelines that are to shape the document to be presented at the Summit of Heads of State in November, in Rio de Janeiro. “The proposals were well accepted by participants, and we will suggest a number of practical actions to be implemented by countries,” explained Barboza. The coordinator also presented priorities referring to infrastructure, such as sustainability and inclusion. According to him, “a country may have a solution to a problem that can be implemented in another, reducing costs and being more efficient,” he argued.
There are also strategies to make global infrastructure more resilient through practical actions to reduce the impacts of climate change. Investments in infrastructure are capable of impacting poverty reduction, of correcting market failures, and of promoting well-being in regions that are most in need.
A further challenge was raised by the group: the reduction of exchange rate risks. Barboza explained that creating mechanisms to reduce the risk of exchange rate fluctuations is crucial. To him, “developed countries, which have a smaller demand for infrastructure, may invest in countries that need these resources, but are subject to the risk of devaluing local currencies.”
Brazil’s President Luiz Inácio Lula da Silva made a similar observation at the opening of the 78th UN General last year, when defending the need to rethink financial models and mechanisms. Lula criticized neoliberalism as a model that “aggravated the economic and political inequality that plagues democracies today.”
Another priority is to make improvements to infrastructure as a way of boosting economic growth. To effectively contribute to poverty reduction, infrastructure services must be available to all citizens, regardless of their income. The group is expected to send recommendations concerning project coordination and financing, all focused on multilateral financial institutions such as development banks.