When looking at infrastructure markets throughout the world a common word used for the United States and Europe was stuck. This is not the case for the Gulf region.

Dubai Marina

Unlike the US and Europe, the Gulf is developing new key infrastructure assets at a robust pace. Why? The main reason is that it does not suffer from crumbling infrastructure, in part, because the Gulf region had little infrastructure to speak of 50 years ago.

Older economies (the US and EU) have had trouble gaining momentum and public acceptance to raise funds to repair an old infrastructure, whereas the Gulf is built on limited infrastructure from pre 1960.

More recently this region has invested heavily in diversifying its economy away from oil and gas. Today the region continues to grow…

As Europe now begins to recover from the decade old effects of the global financial crisis, investment in new and updated infrastructure has been shrinking.

The region’s sovereign debt crisis, such as in Ireland and Spain, led to deep cuts to infrastructure investment as governments sought to balance the books.

According to Statista, the percentage of GDP spent on infrastructure for UK, France and Germany ranged between 2% and 2.2% in 2013 marginally below USA who has been spending 2.4%. This is very much in the shadows of the growing economies of China (8.8%) and India (5.2%). Australia (4.7%) also outshone other developed nations.

However, while there may be signs of recovery as spending on infrastructure for the region as a whole is no longer…

Co-Authored with Cherian George, Head of Infrastructure North America and LatAM.

Infrastructure has developed from a niche corner of the bank market some thirty years ago to now become a mainstream asset class.

Today, joining banks, are pension funds, insurance companies and sovereign wealth funds that have been attracted to infrastructure investment that can offer long term and stable returns. Interestingly, politicians around the world are promising to address and invest more in ageing and new infrastructure projects as a public policy tool to create and support growth.

The asset class evolved over the last two centuries. The UK, in the Victorian era, developed key civil infrastructure including the railways as well as the water and sewer networks around the globe —…

Ian M Dixon

Managing Director and Analytical Head of EMEA and APAC Infrastructure & Project Finance Group at Fitch Ratings

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