“Fifteen-minute” cities: the key issues of infrastructure that the world is discussing

In ten years, 70% of the world’s population will live in urban areas. The estimate came from the Bank of Koreaat the opening of the event Global Cooperation for Infrastructure (GICC) held in South Korea. “Cities of fifteen minutes”, financing dand international organizations and PPP contractsat the center of the scene.

Airports, tunnels, highways and housing. Over the last few years Sixty years of Korean companies contributed to the development of various countries for more than a century trillion dollars.

Today, the challenges are different. The global infrastructure market is undergoing significant changes and this was made clear at the GICC.

“We have seen a high level of urbanisation as a result of population growth. It is required to create on a large scale“said Rhee Chang-yong, governor of the Bank of the Republic of Korea.

In turn, the growth of cities must come hand in hand with adaptation to the energy transition.We have global challenges, such as climate change.“, warned the official, in the framework of the event where countries such as the United Arab Emirates, the Czech Republic, Tanzania, Peru and Panama participated.

In this regard, the representative of the Eximbankthe Republic of Korea’s export-import bank, explained that there is not only growing demand for infrastructure driven by climate change, but also by the Supply chain expansion.

These changes in global chains occurred after the pandemic. COVID-19the geopolitical tensions current and the competition between powers, which are becoming more and more intense. In turn, the representatives of the GICC warn of the need to change traditional financial models, to achieve one of “co-financing“where multilateral organizations work alongside commercial banks.

Also at the GICC the execution of public-private administration projects“through investments direct and purchase of corporate bonds“, explained the representative of the South Korean central bank.

Regarding this type of contracts, questioned by the opacity and irregularities which they then present, the representative of Eximbank assured that its success will depend on “good contractors, a clear regulatory framework and credible and transparent financial institutionsThe organization is the third largest provider of financing globally.

S&P Global estimates Korea’s GDP growth at 2.7% in 2024

After the opening ceremony came the screenings. For S&P Globala company dedicated to business information and analysis present at the event, the real growth of global GDP will be 2.7% in 2024 and 2.8% in 2025.

At the same time, he understands that inflation “is moderating worldwide“what a financial policy allows”more accommodating” (lower interest rates), which allows for the financing of infrastructure.

“Many emerging markets have already begun to ease. The United States will begin to ease its pressure in September with other countries linked to the US dollar”, said the company representative at the event. However, this flexibility will be “initially cautious“given concerns about a resurgence of inflation.

Thus, lower interest rates would translate into lower activity. stronger construction in 2025, starring Eastern Europealthough it is “biased by the expected reconstruction of Ukraine” and the Southeast Asiawhere India will be able to offer the greatest growth.

For their part, Latin American construction markets are facing Low commodity prices, political unrest and monetary fragility that limit investment potential, according to S&P Global. “Only Peru offers above-average growth in the region,” they project.

Korea: Construction takes centre stage

However, when it comes to residential construction, both in North Americaas in Latin Americagrowth will be recorded in 2025, according to the company’s Market Intelligence area.

The objective set out in the GICC is the construction of smart cities “fifteen minutes“That is, urban centers where any destination is, at most, that time away.

The financing alternatives will be a central theme from now on in the upcoming discussions on infrastructure.

Meanwhile, according to data from the African Development Bankhe continent currently maintains a payment default rate of around 1%while LATAM 10%, Europe 12% and USA particularly 6%.

Environmentally friendly urbanisation, digitalisation, population growth and economic expansion are the topics that encompass the debates to build the infrastructure of the future. Of course: with the help of the States.By aligning public policies of governments it is possible to mark development”concluded the representative of the Bank of Korea.