If you think Los Angeles traffic is bad, take a look at the results of IBM’s Commuter Pain Index. Last summer, IBM surveyed more than 8,000 motorists in 20 cities across 6 continents to determine the emotional and economic toll of commuting. They measured the amount of time it took to commute and time stuck in traffic along with whether there was an agreement of the following: the price of gas is already too high, traffic has gotten worse, and driving causes stress and anger.
According to IBM, 13 cities other than LA cause more commuter angst. The top three hail from three different countries: Beijing and Mexico City tie as the world’s worst, with Johannesburg coming in third.
Yet, of IBM’s 20 surveyed cities, three of them fall within U.S. borders. It’s been 50 years since the U.S. began its infrastructure road project that connected the Heartland to the tip of Florida and the east coast to the west coast. Since then, infrastructure spending has been flatter than America’s buckled roads. As a share of GDP, spending has slowly declined to 2.4 percent.
In emerging markets, it’s a completely different story. Among the E-7 countries (the seven most populous nations), Brazil, China, India and Mexico have projects in the works that most likely will have a substantially greater impact than America’s “great road program.” These programs attempt to address infrastructure needs to support increasing urban populations with rising incomes and a significant growth in automobile ownership.
Below are a few highlights published in an extensive report done by the Urban Land Institute (ULI) and Ernst & Young:
Brazil Growth Acceleration Program
The country is preparing to host the 2014 World Cup and the 2016 Summer Olympics, with an infrastructure plan to help fans travel around the country. The government has committed to spending 0 billion over several years to construct power plants, hydroelectric dams, port facilities and a high-speed railway which will run from Rio de Janeiro to Sao Paulo. In Rio, major upgrades to highways and bus lines will help link the downtown to the suburbs and airport.
China’s 12th Five Year Plan
Beginning in 2011, China will allocate trillion in infrastructure spending over the next five years. According to KPMG Insight Series, key projects will be to increase the number of airports from 175 to 220, including building a new airport in Beijing; and extending the length of highways to more than 50,000 miles and high-speed rail to 27,000 miles.
India’s 12th Five-Year Plan
Over the 2012-2017 period, the ULI and Ernst & Young report indicates the national government in India is planning to spend trillion—or about 9 percent of GDP—to build necessary power, water and a transportation system to sustain the growth of its country. As an example of the country’s poor roads and rickety railways, nearly half of fruits and vegetables rot on the way to market. To improve this situation, ULI and Ernst & Young state that the Transport Ministry has “set out an ambitious agenda to build 12 miles of road per day, or 30,000 miles over the next four years.”
Mexico’s National Infrastructure Plan
In 2007, Mexico began a five-year infrastructure plan totaling more than 1 billion spent on 300 projects including ports, airports, roads, railways, water and energy.
General Roy Stone, American Civil War hero and head of the U.S. Office of Road Inquiry, once said, “Good roads are the highways to wealth.” We agree, as we think these infrastructure projects will help transform these most populous countries from the poorest areas of the world to the next economic powerhouses.
Read a previous blog on the $6 Trillion Opportunity in global infrastructure.
