U.S. infrastructure investment would create jobs, improve the competitiveness of our goods, and protect public health and the environment
The profit motive plays out differently from one region of our globe to another. For example, in the U.S., corporations seem most concerned with short-term profits, driven by stockholder demand for high dividends.
By comparison, Japan and other East Asian economies are rooted in government-private sector collaboration with an overriding focus on long-term market share growth.
Consider how foresightful Chinese leadership was when they set out to capture the rare metals market over 20 years ago. By 2013, China controlled 95% of global mined production and processing. Why is this important? Rare metals are critical to a number of advanced weapons systems, wireless devices and emerging green technologies. Although the U.S. and other economically developed countries are now beginning to work towards closing the gap, estimates are that within the next few years the Chinese monopoly on this market could potentially undermine U.S. military defense capabilities.
Two extremes–Chinese vs. American infrastructure investment
No less impressive is China’s brilliant, rapid infrastructure development. International critics view some Chinese plans like linking Asia with North America by rail, as wildly unrealistic. Perhaps so… But how realistic is it for the U.S. to tolerate such sub-par investment in our crumbling infrastructure for over 35 years?
Global infrastructure initiatives
Last October, World Bank Group President, Jim Yong Kim, launched an initiative to encourage infrastructure investment in developing countries. He estimates that this Global Infrastructure Facility (GIF) will require up to a trillion dollars of additional investment each year every year this decade, twice what is now planned, primarily through public-private sector partnerships.
Without a higher level of investment, the bank won’t be able to implement its primary mandate of reducing global poverty. Critics doubt GIF’s commitment to improving the lives of the poor because in the past private sector-focused infrastructure plans have placed low priority on poor communities and overlooked environmental and social needs. Attempts to privatize water supply infrastructure, for example, have raised concerns about higher costs and inequitable service for consumers.
U.s. Infrastructure initiatives
Few question that U.S. infrastructure investment would create jobs, improve the competitiveness of our goods, and protect public health and the environment. One example–if we could muster the political will to repair our water supply system, we could radically reduce the loss of more than 46 billion gallons of water that leak out of pipes every day–at a time when chronic drought conditions besiege the West and other parts of the nation.
The Obama Administration launched its Build America Investment Initiative in the summer of 2014 to help local and state governments find ways to raise investment in water, transportation, energy and broadband. With Congressional approval of the Grow America Act so unlikely ($300B+ investment in infrastructure), the following public-private sector strategies offer the greatest immediate promise–
- The Rural Opportunity Investment (ROI) Initiative at USDA is poised to connect projects to investors, improve access to USDA credit programs and level the playing field for public private partnerships;
- A new Center at EPA will invest in drinking water and wastewater systems, working closely with local and state governments, utilities and private sector partners by leveraging federal grants to attract higher levels of private capital into projects.
- A new USDA Rural Opportunity Investment Initiative will encourage rural water, energy, and broadband investment in rural America.
- The Administration has proposed the creation of an innovative new municipal bond, Qualified Public Infrastructure Bonds (QPIB) to encourage financing for airports, mass transit, sewer, water and surface transportation projects with no expiration date, tax and other benefits.