Singapore top for global infrastructure investment, but UAE and Qatar "more promising", says consultancy

Out-Law News | 24 Sep 2014 | 3:52 pm | 1 min. read

The Gulf Cooperation Council (GCC) countries of Qatar and the United Arab Emirates (UAE) are becoming some of the most attractive markets in the world for infrastructure investment, according to a new report by global construction consultancy ARCADIS.

The firm's 'Global Infrastructure Investment Index' for 2014 (28-page / 3MB PDF) ranked the countries at two and three respectively, behind only first-placed Singapore. Although the strategic links between the city state's infrastructure planning policy and business and social requirements helped it hold top place on the list, ARCADIS said that investment opportunities were "limited" due to its government self-financing most major projects. The report praised Qatar and the UAE for their strong business environments, healthy pipelines of development work and growing economies.

"A key difference that we have seen in the Asian and Middle Eastern markets is that those countries that have a clear integrated strategy tying infrastructure development plans to business and economic objectives have higher rankings," said Rob Mooren, global head of infrastructure at ARCADIS. "This gives long term clarity to investors and is something that developed markets would do well to copy if they are to succeed in attracting more private finance into infrastructure."

"Good infrastructure is important for the long-term economic development of a country. Many governments are struggling to finance infrastructure investments. As traditional debt markets are now harder to access, governments need to find alternative finance and agree to progressing projects. By encouraging private finance into infrastructure, governments can remain globally competitive and meet their social and economic objectives," he said.

The report updated ARCADIS' first index, published in 2012, and ranked 41 countries according to their attractiveness to potential investors in infrastructure, including banks and pension funds. The consultancy looked at various issues including the ease of doing business in each market, tax rates, gross domestic product (GDP) per capita, government policy, existing infrastructure quality and availability of debt finance. It also considered countries' ranking against other influential surveys, including the recent World Economic Forum Global Competitiveness Index.

Since the first index was published, both the UK and US have risen three places in the rankings to become one of ARCADIS' top 10 investment destinations. The UK is now at 10th place and is the third-highest ranked European country on the index, after Sweden and Norway at 5th and 6th place respectively. The US is now in 8th place. Other European countries including Holland, France and Italy fell in the rankings, either because they lacked the public finance needed to upgrade their ageing infrastructure or their governments did not commit to delivering proposed projects, according to the report.