Infrastructure has shown resilience in the face of the economic downturn, and investment in the sector was used to boost aggregate demand during the global recession of 2009. However, governments around the world are now moving from stimulus to austerity. As the dust settles on the new initiatives used to attract private (rather than public) capital for infrastructure development, my colleagues in BMI’s Infrastructure Team take a fresh look at what we think are the Top 10 Infrastructure Markets globally.

Criteria For The Top 10

Employing BMI’s metrics for infrastructure (forecasts and risk ratings), the countries that made it into the final list present a combination of factors including:

• Growth potential and scalability, either in specific sectors, or the infrastructure market as a whole.
• Political support for infrastructure development and government endorsement for public private partnerships (PPPs) and concessions.
• Favourable macroeconomic fundamentals (GDP growth, population and demographic trends).
• Propensity for foreign players to enter the market and a strong competitive landscape.

BMI’s Top 10 Infrastructure Markets*

Australia

Chile

Colombia

India

Indonesia

Panama

Poland

Saudi Arabia

Turkey

United States

*Note: Markets are ranked alphabetically

Some Surprising Absences

There are several notable absences from the top 10, most obviously China, Brazil and Vietnam, but also countries like Qatar, the UAE and South Africa. While BMI maintains core views regarding the significant opportunities and scope for growth in these markets, the Infrastructure Team highlights that there are also risks and uncertainties (unique to each market and of varying degrees of severity) that prevented them from making the final cut.

Why China Fails To Make Final Cut

China’s infrastructure sector is dominated by Chinese state-owned companies and the government has shown a distrust of ownership and operation by non-Chinese, and even non-state controlled entities.

The very high barriers to entry and onerous operational environment mean that the opportunity cost of direct involvement with China’s infrastructure is too high. Essentially, BMI’s view remains that China’s infrastructure industry can currently mainly benefit Chinese players.