The New Investment Model: A Path to Sustainable Development Goals?*

Tuesday, April 14, 2:00 – 4:00 PM 
Friends of the Earth
1100 15th Street NW, Suite 1100
Washington, DC 20005
(Near Farragut North and McPherson Square Metros)

To attend the event in person, please RSVP to HEldridge@FDNEarth.org.

To access the discussion via Online-Seminar, please register here. Important: If you plan on calling into the Online-Seminar only by phone, please first register using the link above. Then disregard the access code given and please use the following access code instead: 496-631-729. If you are calling in by phone from a country other than the U.S., U.K., Germany, Belgium or Italy, please contact us for call-in information. 

Remarks by: 
Dr. Brent Blackwelder, President Emeritus - Friends of the Earth
Nancy Alexander, Director - Economic Governance, Heinrich Boll Foundation North America
Jesse Griffiths, Director - European Network on Debt & Development (EURODAD)

Background: 
SPENDING BOOM. Total global mega‐project spending is already assessed at US$ 6‐9 trillion annually, or 8% of total global GDP, which denotes the biggest investment boom in human history. Now, there is strong momentum toward augmenting this boom in order to boost global economic growth rates by 2.1% (by 2018) and create jobs. Is the boom likely to lead to these goals? Or, sustainable development goals?

COMPETITION. The competition between and among traditional and emerging global powers for resources and markets is increasing. As the China-led Asian Infrastructure Investment Bank (AIIB) and the BRICS New Development Bank (NDB) prepare for “take off,” U.S. leadership is declining. As Larry Summers wrote, “As long as one of our major parties is opposed to essentially all trade agreements, and the other is resistant to funding international organizations, the U.S. will not be in a position to shape the global economic system.” (FT, “Time US Leadership woke up to new economic era,” 5 April 2015). 

Competition is exerting downward pressure on norms, safeguards, and wages. Meanwhile, project preparation facilities are creating "pipelines of bankable projects" in each geographical region that rely too heavily on fossil fuels and big dams.

UN-RELATED GOALS. While the UN is creating goals for humanity to be in alignment with the earth (Sustainable Development Goals (SDGs) and national targets in UNFCCC COP21 negotiations), the G20 and competing development finance institutions are embracing a new investment model that could make a farce of these goals and targets.

THE NEW INVESTMENT MODEL. The post‐WWII development model is now defunct. The new investment model emphasizes the use of public‐private partnerships (PPPs), new project preparation facilities, new forms of investor risk protection, and financialization. The key to, or the “magic bullet” of the new model is the strategy to unlock access to long-term institutional investment (LTII). The G20, the UN Secretary General and the President of the World Bank have all expressed the desire to unlock access to some $84 trillion in long‐term institutional investment (e.g., pension funds, insurance funds, sovereign wealth funds). 

Yet this could lead to socialization of risk and privatization of gains on an unimaginable scale, thus leading to exploding levels of already‐severe inequality, on the one hand, and sovereign debt, on the other.

CHALLENGE TO CIVIL SOCIETY: Over the decades, civil society strategies have tended to focus on single institutions or single sectors (e.g., energy, water, health care, forestry, agriculture) or single mechanisms, such as safeguards, to protect the interests and legal rights of people and the earth. To some extent, we work in silos. What strategies could civil society employ to confront this effectively? What research/analysis is still needed?

Suggested Readings:
The writings of Bent Flyvbjerg of Oxford
Nancy Alexander, "World Bank in the Vanguard of an Infrastructure Boom"
Nora Rohde, "Carbon Intensity & Energy Infrastructure"
Nora Rohde, “Assembly Lines For Project Development: The Role of Infrastructure Project Preparation Facilities”