Egypt, S.Arabia step up trade ties through coordination council talks    Egypt reviews progress on $200m World Bank-funded waste management hub    Egypt urges Israel to accept Gaza deal amid intensifying fighting    SCZONE showcases investment opportunities to eight Japanese companies    Egypt, ADIB explore strategic partnership in digital healthcare, investment    SCZONE, Tokyo Metropolitan Government sign MoU on green hydrogen cooperation    Egypt welcomes international efforts for peace in Ukraine    Al-Sisi, Macron reaffirm strategic partnership, coordinate on Gaza crisis    Contact Reports Strong 1H-2025 on Financing, Insurance Gains    Egypt, India's BDR Group in talks to establish biologics, cancer drug facility    AUC graduates first cohort of film industry business certificate    Egyptian pound down vs. US dollar at Monday's close – CBE    Egypt's FM, Palestinian PM visit Rafah crossing to review Gaza aid    Egypt prepares unified stance ahead of COP30 in Brazil    Egypt recovers collection of ancient artefacts from Netherlands    Egypt harvests 315,000 cubic metres of rainwater in Sinai as part of flash flood protection measures    Egypt, Namibia explore closer pharmaceutical cooperation    Fitch Ratings: ASEAN Islamic finance set to surpass $1t by 2026-end    Renowned Egyptian novelist Sonallah Ibrahim dies at 88    Egyptian, Ugandan Presidents open business forum to boost trade    Al-Sisi says any party thinking Egypt will neglect water rights is 'completely mistaken'    Egypt's Sisi warns against unilateral Nile measures, reaffirms Egypt's water security stance    Egypt's Sisi, Uganda's Museveni discuss boosting ties    Egypt, Huawei explore healthcare digital transformation cooperation    Egypt's Sisi, Sudan's Idris discuss strategic ties, stability    Egypt to inaugurate Grand Egyptian Museum on 1 November    Greco-Roman rock-cut tombs unearthed in Egypt's Aswan    Egypt reveals heritage e-training portal    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



The transition to sustainability
Published in Daily News Egypt on 20 - 03 - 2009

NEW YORK: The global economic crisis will be with us for a generation, not just a year or two, because it is really a transition to sustainability. The scarcity of primary commodities and damage from climate change in recent years contributed to the destabilization of the world economy that gave rise to the current crisis. Soaring food and fuel prices and major natural disasters played an important role in undermining financial markets, household purchasing power, and even political stability.
Viewed in this way, an essential policy that developed and developing countries should pursue in overcoming the crisis is to build infrastructure suitable for the twenty-first century. This includes an efficient electricity grid fed by renewable energy; fiber and wireless networks that carry telephony and broadband Internet; water, irrigation, and sewerage systems that efficiently use and recycle fresh water; urban and inter-city public transit systems; safer highways; and networks of protected natural areas that conserve biodiversity and the habitats of threatened species.
These investments are needed in the short term to offset the decline in worldwide consumption spending that underlies the global recession. More importantly, they are needed in the long term, because a world crowded with 6.8 billion people (and rising) simply cannot sustain economic growth unless it adopts sustainable technologies that economize on scarce natural resources.
In practice, the global crisis means that sustainable investments are being curtailed rather than expanded in the developing world. As access to international bank loans, bond flotations, and foreign direct investment is lost, infrastructure projects talked about in the past are now being shelved, threatening the political and economic stability of dozens of developing countries.
In fact, every part of the world has a huge backlog of vital infrastructure investments. It is time for a concerted global effort to bring those projects on line. This is not easy to do. Most infrastructure investment requires public-sector leadership to forge partnerships with the private sector. Typically, the public sector must enter into contractual agreements with private firms not only to build the infrastructure, but also to operate it as a regulated monopoly or on a concession basis.
Governments generally lack the needed technical capacity to design such projects, opening up possibilities of favoritism and corruption when major contracts are awarded. Such charges are likely to be hurled at governments even when they are not true, though all too often they are.
Still, the backlog of such projects is now wreaking havoc with the world economy. The world s major cities are clogged traffic jams and pollution. The atmosphere is filling with greenhouse gases from heavy use of fossil fuels. Water scarcity is hitting virtually every major economic center, from North America to Europe, Africa, India, and China.
Governments should thus strengthen their ministries of infrastructure (including power, roads, water and sanitation, and information and communication technologies), as well as their national development banks, so that they can properly design long-term infrastructure projects and programs. The ability to offset the crisis in a constructive manner through expanded public-private partnerships will determine the subsequent success of countries and regions. Interestingly, the US is about to create a National Infrastructure Bank for the first time.
Nevertheless, American and European economic advisers generally believe that a short sharp stimulus will be enough to restore economic growth. This is wrong. What will be needed is an overhaul of the world economy towards sustainability.
Moreover, policymakers in the rich world believe that they can continue to neglect the developing world, or leave it to its fate in global markets. This is also a recipe for global failure, and even future conflict. Developed countries will have to do far more to help poor countries through the transition to sustainability. Whereas most of the "stimulus legislation to date has been short-term and inward-looking, increased funding for sustainable infrastructure in poor countries would provide a powerful boost to rich-world economies.
Developed countries should agree to channel considerable savings to developing countries to finance the scale-up of sustainable investments. This can be done directly on a bilateral basis, for example, through long-term loans from developed countries export-credit agencies. It can also be done multilaterally, by raising the infrastructure investment flows from the World Bank and the regional development banks (including the Inter-American Development Bank, European Investment Bank, African Development Bank, and Asian Development Bank). Both channels should be used.
Developed countries also fail to recognize that without much greater financing of sustainable infrastructure in the developing world - especially sustainable power generation and transmission - a global agreement on climate change later this year (or any time soon) will be impossible. The rich world somehow expects poor countries to restrict their use of fossil fuels without any significant help in financing new and sustainable sources of energy. In almost all of the rich-country proposals about targets, limits, commitments, and permits for greenhouse gases, there is hardly a word about helping poor countries to finance the transition to sustainable technologies.
The G-20 meeting in London on April 2 offers hope for a true global effort to repair the failing world economy. This is the time and place to launch the global drive toward sustainability. If we fail to meet the challenge, the global crisis will endanger the world for years to come.
Jeffrey D. Sachsis Professor of Economics and Director of the Earth Institute at Columbia University. This commentary is published by DAILY NEWS EGYPT in collaboration with Project Syndicate (www.project-syndicate.org ).


Clic here to read the story from its source.