When big projects become PR

Every five years, the countdown to the polls is marked by certain distinctive characteristics.

National and local politicians who had previously maintained the kind of muteness only reserved for people who have taken oaths of silence suddenly resurface, with a zealousness not witnessed before.

We begin an almost fervent race to complete previously stalled or slowed infrastructure projects. I have a few uncharitable words for politicians, especially at the local level who have perfected the knack of turning every single opportunity into a public relations exercise.

Stop wasting our hard-earned money and valuable time by subjecting us to the mediocrity of creating pomp and fanfare around launching village transformers (yes, the electrical type), boreholes and other basic services.

These are the utmost rudimentary facilities you are mandated to provide when the citizens appoint you, they are not going over and above your call of duty.

Exploiting them for PR purposes is, honestly, insulting. Back to infrastructure. Underlying a significant number of the Sustainable Development Goals (SDGs), the link between infrastructure development and economic growth is inextricable.

Water, energy, transportation and communication networks improve public health systems, reduce poverty and have both a direct and ripple effect on fostering economic growth. However, not all development projects are created equal and the role of leadership in the balance between reaping low-hanging fruit and long-term gains is vital.

This is especially important in developing countries where leaders are faced with the daunting task of creating new ecosystems across all strata of society, often amidst severely constrained resources.

There is much, therefore, that we can learn from some of the world’s most populous countries. Between India and China, which have a combined population of 2.69 billion, the effects on growth are illuminated via the differences in choices made as regards development projects.

A paper exploring Infrastructure’s Role in Economic Growth by the Federal Reserve Bank of Atlanta illustrates the role played by decision makers in prioritisation of projects and the impact this has on long-term growth.

By 2008, India had made significant investments into its service sector as its nexus into development, foregoing the typical manufacturing export-led path. The country garnered significant wins within business processing and information technology service exports, with these industries contributing a reported 52 per cent to the country’s Gross Domestic Product in 2014-2015.

At US$783billion within the same financial year, the sector was cited as one of the largest and fastest growing sectors of the economy, attracting significant foreign direct investment (FDI) and creating employment. China, on the other hand, racked up investment in infrastructure, which is cited as one of the main ingredients of China’s success.

In ‘The Elephant and The Dragon’, by an award-winning Asia analyst, Robyn Meredith writes that China built new coal mines to supply electricity plants beginning in the 1980s. The country developed a modern power grid, almost quadrupling the generator capacity between 1990 and 2003. Currently, China is investing in nuclear power in a bid to triple the amount of power it generates by 2020.

However, its most significant focus has been made on roads and highway infrastructure, which are expected to reach 55,000 miles (about 88,500 kilometres) by 2020. Together with pro-business policies and cheap labour, this outlay in infrastructure made the country very attractive to FDI.

By 2008, India’s inadequate infrastructure was estimated to be restricting economic growth by 1.5 to 2 per cent per year and was cited as the single most important constraint on India’s economy by its central bank. On the other hand, China has exhibited two and a half decades of unprecedented, double-digit growth. Granted, the last quarter of 2015 was cited as a 25 year low in an economic slow-down that is prompting policy makers to shift away from being an export and high-investment-driven economy to one driven by Chinese consumers.

However, even though this slow down has major territories feeling the pinch, and with India now cited as the top destination for FDI, the kind of headstart the country has garnered since the early 1990s is virtually impossible to overlook, and creates a very tall order for India to catch up with. Consider how the numbers stack up.

In 2014, India had a reported GDP of US$2.06 trillion against China’s US$10.4 trillion. Staggering numbers aside, China’s economy was over five times bigger than India’s, yet in terms of population over these years China only had 9 per cent more citizens.

Away from the mind-boggling numbers, the importance of strategic planning in infrastructure projects has never been more essential. From the impact on uplifting the citizens’ lives in the long term to creating an economy that can weather shocks without crumbling, we can learn a lot from China’s consistent and continuous focus on maintaining an economic lead.