Connect with us

Markets

W’Bank Highlights Benefits of Investing in Infrastructure

Published

on

World Bank
  • W’Bank Highlights Benefits of Investing in Infrastructure

The net benefit on average of investing in more resilient infrastructure in low- and middle-income countries will be $4.2 trillion with $4 in benefit for each $1 invested, according to a new report from the World Bank and the Global Facility for Disaster Reduction and Recovery (GFDRR).

The report titled: “Lifelines: The Resilient Infrastructure Opportunity,” laid out a framework for understanding infrastructure resilience, which is the ability of infrastructure systems to function and meet users’ needs during and after a natural hazard. It examined four essential infrastructure systems: power, water and sanitation, transport, and telecommunications.

Making them more resilient is critical, the report stated, not only to avoid costly repairs but also to minimise the wide-ranging consequences of natural disasters for the livelihoods and well-being of people.

Outages or disruptions to power, water, communication and transport affect the productivity of firms, the incomes and jobs they provide, as well as directly impacting people’s quality of life, making it impossible for children to go to school or study, and contributing to the spread of water-borne diseases like cholera, it added.

“Resilient infrastructure is not about roads or bridges or power plants alone. It is about the people, the households and the communities for whom this quality infrastructure is a lifeline to better health, better education and better livelihoods,” said World Bank Group President, David Malpass.

“Investing in resilient infrastructure is about unlocking economic opportunities for people. This report offers a pathway for countries to follow for a safer, more secure, inclusive and prosperous future for all,” he added.

The report also found out that lack of resilient infrastructure harms people and firms more than previously understood. Natural disasters, for instance, cause direct damages to power generation and transport infrastructure, costing about $18 billion a year in low- and middle-income countries. But the wider disruptions that they trigger on households and firms is an even bigger problem.

Altogether, disruptions caused by natural hazards, as well as poor maintenance and mismanagement of infrastructure, costs households and firms at least $390 billion a year in low- and middle-income countries.

“For infrastructure investors – whether governments, development banks or the private sector – it is clear that investing in resilient infrastructure is both sound and profitable,” the Senior Director, Climate Change, at the World Bank, John Roome said.

“It is not about spending more, but about spending better.’
‘It is cheaper and easier to build resilience if we look beyond individual assets, like bridges or electric poles, and understand the vulnerabilities of systems and users,” lead author of the report, Stephane Hallegatte said.

“By doing so, entire systems can be better designed and with greater flexibility so that damages are localised and do not spread through entire networks, crippling economies at large,” he added.

Drawing from a wide range of case studies, global empirical analyses, and modelling exercises, the report also finds major region and country-specific implications of investing in resilient infrastructure.

For instance, today Africa and South Asia bear the highest losses from unreliable infrastructure:
For instance, in Kampala, Uganda, even just moderate floods block enough streets to make it impossible for over a third of Kampalans to reach a hospital during the critical window of time following a medical emergency.

Also, in Tanzanian firms are incurring losses of $668 million a year (or 1.8 percent of GDP) from power and water outages and transport disruptions, regardless of their origin. Almost half of transport disruptions in the country are also due to floods, and flood-related transport disruptions cost more than $100 million per year.

“Reliable access to electricity has more favorable effects on income and social outcomes than access alone in Bangladesh, India, and Pakistan: boosting per capita income, study time for girls and women’s participation in the labor force.

“In India, access to electricity increases women’s employment by 12 percent. But access is usually unreliable. Where access is reliable – that is, available 24/7 – the increase reaches 31 percent.

“East Asia is a hotspot of infrastructure asset vulnerability to natural hazards and climate change: there are four East Asia countries among the top five countries globally in terms of risk to transport assets, and three out of five for the risk to power generation.

“In China, 64 million people are dependent on waste water treatment plants that are exposed to earthquake and soil liquefaction risks, and almost 200 million people are dependent on treatment plants that will be exposed to increasing flood risks due to climate change.

“In Peru, landslides often interrupt road traffic, causing large losses for users. Increasing the redundancy of the road network can be more efficient than trying to make roads resistant to landslides. This is especially the case around Carretera Central, a strategic export route for agricultural products,” it added.

Furthermore, the report offered five recommendations to ensure that infrastructure systems and users become more resilient. These include getting the basics right.

It noted that tackling poor management and governance of infrastructure systems was key.

For instance, a poorly-maintained infrastructure asset cannot be resilient, it added.

It also called for building institutions for resilience, stating that wider political economy challenges also need to be addressed, and critical infrastructure assets and systems need to be identified so that resources can be directed toward them.

“There is need to include resilience in regulations and incentives. Financial incentives can be used to ensure that the full social cost of infrastructure disruptions are accounted for, encouraging service providers to go beyond just meeting mandatory standards.

“Improve decision making. Access to better data, tools, and skills could be a game-changer in building resilience: for instance, digital elevation models for urban areas are not expensive and are critical to inform hundreds of billions of dollars in investments per year.

“Provide financing. The right kind of financing at the right time is key. For instance, small amounts of resources can support regulators and be used at the early stages of infrastructure design compared to the billions needed to repair and recover in the aftermath of a disaster,” it added.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

Global Oil Drops as Coronavirus Infections Rises in India and Other Nations

Published

on

Crude oil

Oil prices declined on Monday during the Asian trading session amid rising concerns that the surge in coronavirus in India and other nations could force regulators to enforce stronger measures at curbing its spread and eventually affect economic activity and drag on demand for commodities like crude oil.

Brent crude oil, against which Nigerian oil is priced, declined by 22 cents or 0.33 percent to $66.55 per barrel at 8:19 am Nigerian time on Monday, following a 6 percent surge last week.

The US West Texas Intermediate (WTI) declined by 18 cents or 0.29 percent to $62.95 per barrel, after it gained 6.4 percent last week.

The decline was after India reported 261,500 new coronavirus infections on Sunday, taking the country’s total cases to almost 14.8 million, second to only the United States that has reported over 31 million coronavirus infections.

“With … a resurgence of virus cases in India and Japan, topside ambitions continue to run into walls of profit-taking,” said Stephen Innes, chief market strategist at Axi.

Businesses in Japan believed the world’s third-largest economy will experience a fourth round of coronavirus infections, with many bracing for an additional slow down in economic activity.

While Japan has had fewer COVID-19 cases when compared with other major economies, concerns about a new wave of infections are fast rising, according to responses in Reuters poll.

On Tuesday, April 20, 2020, Hong Kong will suspend all from India, Pakistan and the Philippines because of imported coronavirus infections, authorities stated in a statement released on Sunday.

India’s COVID-19 death rose by a record 1,501 to hit 177,150.

Continue Reading

Markets

Global Markets Near Record Peaks and Will Get Stronger: deVere CEO

Published

on

Stocks

As the FTSE 100 hits 7,000 points for the first time since the Covid pandemic, global stock markets are poised to “get even stronger”, says the CEO of one of the world’s largest independent financial advisory and fintech organisations.

The observation from Nigel Green, the chief executive and founder of deVere Group, comes as London’s index jumped over the important threshold in early trading in London, gaining over 0.5% to 7024 points.

Mr Green notes: “London’s blue-chip index is up 40% since the worst lows of the pandemic.

“This landmark moment represents the wider optimistic sentiment gripping global markets which are near record peaks.

“We can expect global stock markets to get even stronger as investors look to seize the opportunities from economies reopening.

“They are looking towards economies rebounding in a post-pandemic era due to the monetary and fiscal stimulus, pent-up cash and demand, and strong corporate earnings.

“The current ultra-low interest rate environment and the under-performance of bonds will also act as a catalyst for stock markets.”

However, the CEO’s bullish comments also come with a warning.

“I would urge investors to proceed with caution as there are some headwinds on the horizon, including relations between the U.S. and China, the world’s two largest economies, which could be coming to a tipping point in coming weeks.

“As such, in order to capitalise on the opportunities and mitigate risks, investors must ensure proper portfolio diversification.”

Mr Green concludes: “A variety of factors are going to drive global stock markets. Investors will not want to miss out and should work with a good fund manager to judiciously top-up their portfolios.”

Continue Reading

Markets

Refinitiv Expands Economic Data Coverage Across Africa

Published

on

Building on its commitment to drive positive change through its data and insights, Refinitiv today announced the expansion of its economic data coverage of Africa. The new data set allows investment managers, central bankers, economists, and research teams to use Refinitiv Datasteam analytical data for detailed exploration of economic relationships and investment opportunities among data series covering the African continent.

Securing reliable, detailed, timely, locally sourced content has not been easy for economists who have in the past had to use international sources which often can take many months to update and opportunities to monitor the market can be missed. Because Africa is a diverse continent, economists and strategists need more timely access to country-specific data via national sources to create tailored business, policy, trading and investment strategies to meet specific goals.

Africa continues to develop critical infrastructure, telecommunications, digital technology and access to financial services for its 1.3bn people. The World Bank estimates that over 50% of African inhabitants will be under 25 by 2050. This presents substantial opportunities for investors who can spot important trends and make informed decisions based on robust and timely economic data.

Stuart Brown, Group Head of Enterprise Data Solutions, Refinitiv, said: “Africa’s growing, dynamic and fast evolving economies makes it a focal point for financial markets today and in the coming decades.  As part of LSEG’s commitment to empowering the global markets with accurate and timely data, we are excited about making these unique datasets available via the Refinitiv Data Platform. Our economic data coverage of Africa will provide our customers with deeper and broader inputs for macroeconomic analyses and enable more effective investment strategies and economic research.”

Refinitiv Africa economic data coverage:

  • Africa economics content comprises around 500,000 nationally sourced time series data covering 54 African nations
  • Content is sourced from national statistical offices, central banks and other key national institutions
  • The full breadth of economics categories in Datastream including national accounts, money and finance, prices, surveys, labor market, consumer, industry, government and external sectors
  • International sources including OECD, World Bank, IMF, African Development Bank, Oxford Economics & more provide comparable data & forecasts across the continent

Refinitiv® Datastream® has global macroeconomics coverage to analyze virtually any macro environment, and better understand economic cycles to uncover trends and forecast market conditions. With over 14.2 million economic times series map trends, customers can validate ideas and identify opportunities using Refinitiv Datastream. Access its powerful charting tools, 9,000 pre-built chart templates and chart studies for commonly used valuation, performance, and technical and fundamental analysis.

 Refinitiv continually grows available data – the China expansion in 2019 covered a unique combination of economic and financial indicators. Refinitiv plans to expand Southeast Asia covering Thailand, Vietnam, Philippines and Malaysia with delivery expected in 2021. This ensures that Refinitiv will have much needed emerging market economic content.

Continue Reading

Trending