Quality Infrastructure Investment and the IMF
12
Quality Infrastructure Investment and the IMF NOVEMBER 20, 2019 Gerd Schwartz Fiscal Affairs Department, IMF
Transcript of Quality Infrastructure Investment and the IMF
Quality Infrastructure Investment and the IMFNOVEMBER 20, 2019
Gerd SchwartzFiscal Affairs Department, IMF
Needs for Infrastructure are High but Fiscal Space is Scarce.
Source: IMF staff calculations
4
5
4
22
15.4
4.1
02468
101214161820
LIDCs EMEs
Perc
enta
ge p
oint
s of G
DP
Additional Spending Needed in 2030 to Achieve High Outcomes in Selected SDGs
(Percentage Points of 2030 GDP)
Economic infrastructure
Source: IMF Global Debt Database. The data for 2018 is preliminary, the full update of the Global Debt Database (GDD) will be released on December 12, 2019.
Gross Public Debt(trillion USD)
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Asian Financial
Crisis
GlobalFinancial
Crisis
20
69
37
US
G7 (excl. US)
G20 (excl. G7)Non-G20 AEs
All others (incl. EMEs and LIDCs)
There are Significant Margins for Improvement of the Quality of Infrastructure Investment.
Example: Berlin Brandenburg Airport, GermanyAbout 30% of the economic benefits associatedwith infrastructure are lost due to inefficiencies.
Source: IMF (2018).
Stronger infrastructure governance is necessary to bridge the gap.
39%
27%
12%
There are Significant Margins for Improvement of the Quality of Infrastructure Investment.
Example: Abandoned monorail bridge, Putrajaya, MalaysiaAbout 30% of the economic benefits associatedwith infrastructure are lost due to inefficiencies.
Source: IMF (2018).
Stronger infrastructure governance is necessary to bridge the gap.
39%
27%
12%
There are Significant Margins for Improvement of the Quality of Infrastructure Investment.
Example: North Bridge Road, Phnom-Penh, CambodiaAbout 30% of the economic benefits associatedwith infrastructure are lost due to inefficiencies.
Source: IMF (2018).
Stronger infrastructure governance is necessary to bridge the gap.
39%
27%
12%
IMF’s Approach to Strengthening Infrastructure Governance
Practical• Concrete recommendations• Tailored to country context• Sequenced prioritized action plan
Facilitates coordination• Catalyst for follow-up support • Improve coordination among
development partners to achieve results
Accessible• Simple summary charts• Peer comparison• Distinction between design (what’s on
paper) & actual implementation (what’s done in practice)
.
Comprehensive• Macro-fiscal framework• Investment planning• Medium-term budgeting• Project management
PIMA
A Comprehensive Framework for AssessingInfrastructure Governance
PLANNING
ALLOCATION
IMPLEMENTATION
PIMA
+ CROSS-CUTTING ENABLING FACTORS
• Three phases within an interlinked cycle
• Fifteen institutions and three cross-cuttingenabling factors
• Two angles• Institutional design• Institutional
effectiveness
Accessible and Effective Communication of Findings to Stakeholders
1. Fiscal Targets&Rules2. National & Sectoral
Planning3. Coordination btw
Entities
4. Project Appraisal
5. InfrastructureFinancing
6. Multiyear Budgeting
7. BudgetComprehensiveness &
Unity8. Budgeting forInvestment9. Maintenance
10. Project Selection
11. Procurement
12. Availability ofFunding
13.PortfolioManagement and
Oversight
14.Project Management
15. Monitoring of Assets
Country X EMEs World
“Spider charts”: benchmarking with peers
“Heatmap”:Institutional design vs institutional effectiveness
9
Where Are The Key Shortcomings in the IG Cycle?
STRONGER
WEAKER
Source: IMF (2018).
Focus On Practical Recommendations
Recommendations and Actions FY16/17 FY17/18 FY18/19 Responsibility Coordination
Provide in Vision 2030 a consistent overview of the government’s main strategies and investment priorities, with clear prioritization and linkages between sectors and projects.
Prime Minister Office
Identify in the National Strategy for Land Use suitable sites for the different initiatives and projects, and provide a basis for the strategic acquisition of land. Ministry of Lands
Update sector strategies to provide a comprehensive description of priority projects with indicative estimates for costs and expected outputs. Sector Ministries WB
A. Sustainable Public Investment PlanningRecommendation 2: Provide a more comprehensive statement of the government’s development strategy for public investments in new and updated strategic documents
A prioritized and sequenced action plan
PIMA brings institutions together to support countries in strengthening IG practices.
• PIMA as an input for country strategies and programs• Coordination in the delivery of capacity development
Coordination With Development Partners
• Development / adoption of an action plan by the authorities on the basis of the PIMA report
• Political commitment to reform is key
Country Ownership for Action Plan
• Development of a CD agenda to support the authorities’ action plan (with devt partners)
• Successful IMF engagement in many Asian countries
Follow-Up Capacity Development
