Rainbow revival

zoom

From the UAE to the US, governments have unveiled capital spending programmes to help fight the downturn. South Africa’s infrastructure spending spree is bigger than most as it gears up to host the football World Cup in June 2010 — a preparation it hopes will stimulate its sagging economy.

South Africa and the gulf region have more than their diverse populations in common. As both seek a fast-track to recovery from the global recession stifling world economies, an escape route is emerging in the form of expanded infrastructure spending.

Integral to reviving the region’s flagging construction sector, creating jobs, easing the flow of credit and attracting investment, many economists consider stimulus packages targeted at civil infrastructure as a vital tonic to ailing economies.

GCC states haven’t waited to be told twice. Work will start next spring on the multibillion-dollar Qatar-Bahrain causeway, a 40km road and rail development planned to become the world’s longest fixed-link marine crossing, and predicted to provide a major economic boost to both states.

Half of the $2.7bn Abu Dhabi Municipality is set to spend on infrastructure this year will be on road projects, with neighbouring emirate Dubai setting aside $79m for three major road projects.

The 2009 budget for Saudi Arabia, the region’s biggest economy, includes $13bn billion for water, municipality, agriculture, industry and infrastructure, and $5bn for transport and communication.

And GCC states are not alone in deciding that expansionary capital budgets could revive limp economies. US president Barack Obama’s government is overseeing the delivery of the largest public works construction scheme since the inception of the country’s interstate highway system half a century ago.

In Europe, Germany’s coalition government has agreed a controversial economic stimulus package worth about $67bn, covering infrastructure investments in railways, roads and schools.

But nowhere is the theory of economic revival through capital spending being tested more stoutly than in South Africa.

The Rainbow Nation is in the midst of the third largest infrastructure programme in the world as it prepares to host the football World Cup in June 2010.

“The World Cup has been absolutely critical for South Africa,” acknowledges Leslie Maasdorp, international advisor at South African investment bank Absa Capital. “It [the tournament] has been key to boosting the construction sector, so has been a major positive factor.”

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM