New Battlegrounds in Development Finance

This is especially the case for infrastructure investments in energy, water, transport, and information and communications technology (ICT). , for example, has planned $360 billion worth of bankable mega-projects in these sectors by 2040. PIDA gives priority to energy (especially hydropower) projects to support mining operations and oil and gas pipelines, while sidelining renewable energy technologies, such as solar, wind, and geothermal. Similar concerns surround the project pipelines of the and the in Asia.

Though some PPP projects offer high returns, they also demand hefty additional guarantees from the host government to offset private-sector risk. In this way, fundamental tensions are created both in the way these deals are put together and in the overall conduct of North-South and South-South integration.

For example, powerful groups and transnational corporations (such as the World Economic Forum, General Electric, and Rio Tinto) are gaining influence within the G-20, the G-7, and the BRICS, whose members compete among themselves for access to resources and markets. That competition now features new Infrastructure Project Preparation Facilities (IPPFs) to accelerate and replicate large PPPs with a disturbing reliance on big dams and fossil-fuel infrastructure, such as Nigeria’s gas-supply pipeline to the European Union – a top priority of PIDA that implies slows progress toward a low-carbon future.

Indeed, the struggle for sustainability, especially in Africa, is becoming a new battleground, featuring deployments by the BRICS, the G-20, Asia-Pacific Economic Cooperation (APEC), Mercosur, and other international groupings and local vested interests. To understand how this plays out requires a rigorous new development paradigm. That is a difficult challenge, because civil society organizations with the greatest interest in learning how to cope with the new pressures tend to specialize in specific development areas, such as the Millennium Development Goals, or sectoral issues, rather than having a broader view of how development finance institutions and their big shareholders operate. A revived World Social Forum might take on the task, by reverting to its original intention of being a counterweight to the WEF.

In Africa, pan-African bodies charged with coordinated oversight and agenda-setting authority should be judged by whether mega-PPPs in infrastructure reinforce a colonial-style extraction and consumption economy, or create a healthy and sustainable economy for generations to come.

Nancy Alexander is a program officer at the Heinrich Böll Foundation (North America). Francis A. Kornegay is a senior research fellow at the Institute for Global Dialogue at the University of South Africa.

Copyright: Project Syndicate, 2014.