Imagine winning a place at university in Madagascar.

Maybe you already live on the island or perhaps you're travelling from the African mainland, or even further afield. This maybe a final step on the path to becoming an engineer, a doctor or, dare I say it, a lawyer. Having gained the qualifications in school to secure admission to one of the country's top institutions there's one sizeable challenge left – there's nowhere for you to actually stay. There simply isn't enough student accommodation available to the country's university students.

It's the same in Malawi and several other East African countries. Despite the best intentions of the UN's Sustainable Development Goals, it's these practical issues which hold back developing nations. Around the world, countries of varying economic maturity face considerable investment gaps in infrastructure, research and development. The global population is expected to rise to 10 billion by 2050 but with rising debt, few governments around the world are in a position to meet the needs of their people. No less than $3.3 trillion per annum would need to be invested in infrastructure projects worldwide by 2030 to keep pace with the rising population. To put this another way, almost 4% of the global GDP needs to be earmarked for infrastructure projects around the world.

And this, clearly, is not happening.

So how do governments find ways of creating affordable accommodation, so that students are able to focus on their studies? How do they build bridges across waters to facilitate commerce? How do they facilitate higher penetration of internet access? One avenue is the private sector, but it's an unattractive proposition from a commercial perspective unless governments rethink their approach. Mechanisms need to be in place which encourage market proposals. There needs to be greater consistency and certainty. Much needs to alter if we are to see any meaningful change.

POWER OF THREE

The impediments holding back governments in Africa are seen around the world. Yet the investment gap is not the result of a shortage of capital. Long-term interest rates are low, there's ample supply of long-term finance and the benefits are obvious in terms of growth and productivity. As we have seen in parts of Asia Pacific, if you can get a single-minded focus around three critical issues, you can bring about real change. So, what are these areas? The B20 Infrastructure Taskforce, of which I am co-chair, has identified three main structural impediments to investment in infrastructure projects around the world: Transparency, consistency and liquidity.

LACK OF TRANSPARENCY

In many jurisdictions, the private sector lacks the necessary insight on the pipeline of infrastructure projects. This is largely because governments fail to communicate their long-term needs, or indeed their more immediate project-specific requirements. Key to overcoming this is the development of bankable and investment-ready project pipelines through dedicated portals. This would allow access to information, through the standardisation of documentation. Sharing and adopting best-practices from around the world will inevitably encourage private finance for public infrastructure.

LACK OF CONSISTENCY

We use different terms around the world and this leads to unintended consequences. Take the issue of reweighting capital risk which comes out of the Financial Stability Board Project process. Trade finance is weighted as a risk, yet it underpins SME-based economies. These small to medium sized enterprises, from start-ups to farmers, finance their trade exports through trade finance. If you impede the access to this, you impede growth in Asia Pacific. Fit-for-future regulation should embrace digital opportunities and risks. The B20 is working hard to strike that balance between financial and regulatory innovation. This requires international coordination to ensure consistency and inclusion. The private sector needs to play a more active role in the global conversation about regulatory coherence wherever it takes shape: Buenos Aires next year, Tokyo in 2019 or Riyadh.

LIQUIDITY CONSTRAINTS

The third part of the equation is the hardest. Infrastructure projects by their very nature are long-term investments, relying upon long-term applications or allocations of capital. A key challenge lies in the fact that these allocations are often underpinned by secondary markets moving money around. These tend to be underdeveloped – or simply don't exist in some economies.

We constantly hear of $3 trillion in pent up demand in Asia Pacific, yet critically, there is a very shallow capital market operating, which makes it very difficult for people to actually fund these projects outside government balance sheets. The alternative is private lending from banks, yet there are very few debt instruments available in many countries, so leaders need to consider ways in which we can develop those secondary markets.

One initiative I have a personal interest in is the Asia Pacific Financial Forum, co-founded with Mark Johnson to establish ways of bringing together all the key players that can help deepen capital markets. Capacity building programs can facilitate project planning, with international development banks acting as the primary tool for the private sector to access project pipelines. To ensure the sustainability of new projects, green finance needs to be facilitated through

RULE OF THREES

There are, of course, more than three issues. But if business leaders can help leaders focus on the most pressing issues, we can in time turn our attention to other areas. By 2030 it's hoped there will be equal access for men and women to affordable and quality technical, vocational and tertiary education, including university. Building affordable homes next to universities, be they in Madagascar, Maldives or Montserrat, is a step towards that. We must never lose sight that small improvements can lead to big changes; changes that can significantly improve the lives of millions.

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