This was supposed to be a decade of growing global harmony with utopia on the horizon.
This was supposed to be a decade of growing global harmony. Technology was going to break down barriers between societies. Social media was going to strengthen democracy. Globalization was going to remove distance between markets. And political stability was going to drive growth. Utopia was on the horizon.
But reality has proven to be far different. Rather than coming closer together, our societies, markets and institutions seem to be rapidly fracturing. Schisms are opening everywhere: between the West and the East; between the young and the old; between the ‘haves’ and the ‘have-nots’; between the left and the right; between protectionists and free-marketers… everywhere you look, the public discourse has become more divisive.
This year, policy-makers and politicians will need to focus on building bridges between opposing viewpoints and finding ways to balance the needs of all stakeholders if they hope to get anything done. Some governments in the East are making good progress in this regard. In the West, however, all signs suggest that this year will be even more disruptive and divisive than the last; don’t expect a return to harmony in 2018.
Governments recognize that increased infrastructure investment can help solve many of the long-term challenges they now face. But they are also prudent enough to know that there will be many short-term obstacles to overcome before they can get there.
The big challenge, therefore, is to create a shared future in an increasingly fractured world by making smart infrastructure investment decisions.
Do you fund healthcare for the boomers and mobility for the millennials? Should you prioritize better transport to help those with jobs or social infrastructure to also protect those without? Do you invest into ports and airports to encourage globalization or do you build walls and barriers to hold it at bay? What is clear is that making sound decisions in this environment will require better data, more sophisticated analytics and much more reliable projections.
In the West, the coming year will see infrastructure planners and policy makersstruggle with distractions. Many worthy projects may stall under the weight of political and social indecision. Some of the bigger multi-national projects may disappear entirely as the world order shifts. And there will be projects and imperatives that will almost certainly get bogged down in the morass of local polity. In these markets, Infrastructure planners will need to break out of the political cycle and focus on developing the assets needed in the long-term.
The East, on the other hand, is going in a different direction; Asia is opening up. Massive cross-border projects (such as Kuala Lumpur–Singapore high-speed rail (MyHSR), Thailand's Eastern Economic Corridor, the China-Thailand high-speed railway via Laos, and the China–Pakistan Economic Corridor) are rapidly moving forward and, in doing so, helping to create better interconnectivity across the region.
At least in the East, many politicians are recognizing that greater regional and international connectivity can be a path to faster growth, more stable economic development and improved living standards. And they are increasingly willing to put aside political, cultural and historical differences in order to achieve that.
Despite the challenges there is room for hope and optimism. Those markets with strong and independent infrastructure authorities should find the strength to act on their longer-term visions. Those with visionary leaders and institutions should find ways to rise above the din of divisiveness. Those with clear purpose should be able to find a way to strike compromise between the competing forces.
There are roots of these virtues in all markets – they just need to be prioritized and strengthened. Those that are able to achieve this will be markets to watch over the coming year.