BUENOS AIRES, Argentina, Nov. 30, 2018—Heads of state, finance ministers, top global investment executives, and leaders of international organizations gathered on the eve of the G20 Summit in Buenos Aires to identify steps for boosting long-term, sustainable private sector investments that tackle development challenges and promote economic growth.
The first Investor Forum of its kind – hosted by the World Bank Group and the Government of Argentina –was comprised of investors holding over US$20 trillion in managed assets alongside key global leaders, including Argentine President Mauricio Macri and Canadian Prime Minister Justin Trudeau, along with ministers and regulators. Forum participants agreed on the key role that private sector investment can play in mobilizing much needed long-term financing to support sustainable projects in the developing world. Participants agreed that new solutions are needed to overcome obstacles to investment, particularly in infrastructure. This is even more important at a time when governments’ budgets are constrained and focused on priority social programs.
“For a country to grow, infrastructure for development is key, both physical and virtual, for the creation of employment and economic progress,” said Argentine President Mauricio Macri.
Participants highlighted the significant role that G20 leaders see to further develop capital markets to mobilize private sector investments in projects with high impact. For their part, senior investment executives pledged to ramp up collaboration with governments to deliver capital for development.
“This kind of cooperation is a win-win – good for investors, good for governments and, in the long-run, good for the poor,” said World Bank Group President Jim Yong Kim. “Investors will get the kind of stable, long-term returns they are looking for, while countries will reap the benefits of increased and more predictable financing to meet long term development goals for people around the world.”
A key topic of discussion was how governments and the private sector can work together more effectively to generate sustainable, long-term investing that can address development challenges while also generating new revenue streams for investors. Infrastructure projects were identified as an area where this cooperation could be greatly increased. Urbanization worldwide is creating additional pressure to provide a growing population in cities with access to services, including water, electricity and transportation.
Sustainable investing that incorporates environmental, social and governance principles was viewed as critical. Such investments not only have the potential to lower financial and reputational risks, but can also improve returns and provide long-term revenue streams for investors.
Several priority areas for action to scale-up sustainable long-term investments were identified, including fostering regulatory reform and market mechanisms to increase incentives and remove barriers to investments, particularly in infrastructure.
The Investor Forum was an important first step towards crowding in the private sector investments that will be fundamental for speeding up inclusive and sustainable economic growth to improve the lives of billions across the world and achieving the United Nations’ Sustainable Development Goals by 2030.
