A shared agenda for businesses and governments

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Government leadership in building infrastructure is critical for competitiveness. A majority of CEOs identified the priority for the governments of all countries outside of Western Europe and Japan, where infrastructure is well developed, and of China – where the government allocated almost US$600 billion of stimulus spending for infrastructure projects over the past two years, according to PwC’s 14 Annual CEO Survey.

The role of private capital in financing infrastructure is unavoidable: an estimated US$3 trillion per year needs to be spent on infrastructure across the globe in the coming decades, according to a recent report from the World Economic Forum.

However, businesses can provide more than cash: they have expertise, and the abilities to execute and manage risks. This is part of what makes PPPs attractive. As Berthold Leetfink, Deputy Secretary General of the Ministry of Economics, Agriculture and Innovation in the Netherlands told PwC, “At least for the Netherlands, and I think for many other countries, planning and building infrastructure is very much in the hands of government. But it’s obvious that the private sector has a lot of knowledge in terms of building cheaply, efficiently or in a more environmentally friendly way.” As an example, a PPP project in 2009 to connect a 12-mile regional rapid transit line in Vancouver (Canada Line) was completed several months ahead of schedule.

Needless to say, businesses also have a key expectation for their governments: to tackle fiscal deficits to restore stability to the markets in a way that is mindful of the fragile environment for global growth. Public revenues are of course expected to be part of the equation: a majority of CEOs expect taxes will rise, led by 65% of CEOs in Asia and 70% in Latin America.

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3 thoughts on “A shared agenda for businesses and governments”

  1. Liviu: Of course it is correct that Private sector can/could contribute more than money but the disconnect between much of industry and Governments has grown to the extent that a mistrust of Public procurement practices has been shown to be justified. Governmental structure, strategy, integrity, openness, etc. ALL, rightly, in the spotlight and the cracks are showing.

    When considered with other local/global events that have hurt business, I feel that until individual Governments get their own houses in order AND stop trying to micro manage macro issues – global financial – there cannot be much scope to suggest that we are even close to “stability”

    David

    1. David, thank you for your comment. I agree that there is no way the private sector will put on the table more than it has to until there will not be a measurable return in infrastructure or other facilities. A fare view that should be correctly understood by Governments as well… starting with public procurement :)

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