Infrastructure development as economic stimulus for emerging markets
Infrastructure investment will play a pivotal role in low- and middle-income countries’ (LMIC) efforts to economically recover from the COVID-19 pandemic. But what approach should LMIC governments and development partners take to promote economic recovery and growth?
As COVID-19 continues to aggravate economic crisis globally, developing countries can look to infrastructure investments to accelerate economic growth and development in rural as well as urban areas. Countries can rely on resilient and self-sustaining infrastructure assets to create a virtuous cycle for economic prosperity and development.
However, spending on infrastructure to create sustainable economic growth is not easy. LMICs will need to adopt innovative approaches to achieve renewed growth and economic development. Incorporating innovative strategies—such as leveraging digital technology practices—in their approaches can help reduce the investment costs. Effective prioritization of projects is necessary for LMICs to yield sustainable outcomes and mitigate risks.
To select the right project, LMIC governments and development partners will need to consider all possible scenarios to increase the economy’s productive capacity. Identifying a project which helps in bridging the gap between infrastructure capital requirements and available budgetary government funds can play a critical role.
Although infrastructure investments can help in reversing the economic damage, planning and executing them carefully is crucial. This paper outlines several market factors and recommended approaches to guide LMIC governments and development partners in infrastructure project selection, design, and construction as a step towards overcoming this economic predicament and boost growth.