SYDNEY (AFP) – A global infrastructure hub proposed by G20 nations to help strengthen economic growth will be based in Sydney and funded by Australia, a report said on Monday.
The Group of 20 of the world’s biggest developed and emerging economies agreed in September that a Global Infrastructure Initiative to share information about matching investors with projects would be established, but details were sketchy.
Prime Minister Tony Abbott told The Australian newspaper that the agency would not involve a new “international bureaucracy”, but would act instead as a clearing house for ideas on raising commercial funds for new public works, such as roads and railways.
“It will be a significant focus for international thinking and be a way of getting our, generally speaking, quite innovative approach to infrastructure before other countries,” he said ahead of the G20 leaders’ summit in Brisbane this weekend.
“We expect that we will probably be the main contributor to the funding but I think we have some modest contributions from some other countries that have already been earmarked.”
The hub’s main purpose is to cut red tape and close the “information gap” between potential investors and infrastructure projects as the G20 looks to spur world economies by shifting from government-led growth towards private sector-led growth.
It has been one of Australia’s main proposals during its presidency of the G20 as the grouping looks to meet a two per cent increase to its combined growth over five years through economic reform and infrastructure investment.
The newspaper said that while the US, Britain and Japan had thrown their support behind the initiative, questions were raised by India, France and others about the wisdom of setting up a new institution that could overlap with the World Bank.
As a compromise, Abbott said there would be a four-year time limit on the centre to avoid creating a permanent institution, something the global economic group has never done.
“We are close to agreement – and this will be unprecedented for the G20 – to have the global infrastructure hub based in Sydney,” he said.
“And if it comes off, this will be the first time the G20 has agreed to the establishment of an ongoing entity.
“This is not an entity in perpetuity. It’s an entity that will last for perhaps four years as an infrastructure financing and infrastructure ideas clearing-house but nevertheless it’s not a huge international bureaucracy.”
The push to raise private-sector investment in infrastructure projects around the world comes as governments battle falling revenue amid efforts to rein in budget deficits, which has hurt public-sector funding of such projects.