| | | Title | Accelerating Investment Challenges and Policies | | Author | World Bank | | Subject | Developing economies, Investment shortfall, Development goals, Low-income countries, Financing gap, Global financial crisis (2008–09), Emerging market and developing economies (EMDEs), Private investment, Foreign direct investment (FDI), Capital, technology, and managerial know-how, Investment accelerations, Per capita GDP growth, Productivity growth, Export growth, Poverty decline, Economic transformation, Global conditions (trade, commodity prices, financial fragmentation), Domestic policy reforms, Long-term growth, Job creation, Labor reallocation, Employment growth, Manufacturing and services, Development needs, Access to electricity, Access to safe drinking water, Digital infrastructure, Infrastructure investment, Climate, energy, education, health, and technology investments. | | Date of Publication | 2025 | | Publisher | World Bank | | Keywords | Investment shortfall, historic proportions, development goals, global GDP, low-income countries, financing gap, trillions of dollars, global financial crisis, emerging market and developing economies (EMDEs), private investment, foreign direct investment (FDI), capital, technology, managerial know-how, investment miracle, investment accelerations, per capita GDP growth, productivity growth, export growth, poverty decline, economic transformation, global conditions, trade, commodity prices, financial fragmentation, domestic policy reforms, long-term growth, job creation, labor reallocation, employment growth, manufacturing, services, development needs, electricity access, safe drinking water, digital infrastructure, infrastructure, climate, energy, education, health, technology. | | Abstract | Developing economies today face an investment shortfall of historic proportions. Meeting even the most modest development goals will require a huge investment push—on the order of 5 percent of global GDP per year. For low-income countries, the financing gap is about 8 percent of GDP annually. It’s a prohibitive price tag that runs into trillions of dollars over the next decade. Yet even as development needs have ballooned, investment flows have ebbed. Since the global financial crisis of 2008–09, investment growth in emerging market and developing economies (EMDEs) has slowed to about half the pace in the 2000s. The growth of private investment, in particular, halved from double-digit rates in the 2000s to less than 7 percent in the 2010s. Foreign direct investment (FDI) inflows— a critical source of capital, technology, and managerial know-how—weakened and became concentrated in a handful of economies. This tension—between burgeoning needs and dwindling resources—defines the challenge at the center of this book. Without a renewed wave of capital formation, EMDEs will not be able to engineer lasting growth, create sufficient jobs, and meet even modest development objectives. But the book also shows that an investment miracle is possible. Over the last seven decades, 115 investment accelerations—episodes of sustained, rapid investment growth—have taken place across 59 EMDEs. They raised investment growth from an average of 3 percent to more than 10 percent annually. They doubled per capita GDP growth and quadrupled productivity growth. Export growth surged, foreign direct investment inflows multiplied, and poverty declined rapidly. In other words, these accelerations transformed economies. Since the turn of the century, however, such investment accelerations have become rarer. In the 2000s, nearly half of all EMDEs experienced an acceleration; by the 2010s, less than one in four did. The drop reflects less conducive global conditions— slower trade, volatile commodity prices, greater financial fragmentation—as well as waning momentum on domestic policy reforms. Why does investment matter so much? First, it is the foundation of long-term growth. In EMDEs, investment has accounted for more than half of potential growth since 2000. Second, it is the engine of job creation. Investment spurs labor reallocation toward more productive sectors, boosting both employment and job quality. During accelerations, employment growth rises steadily, particularly in manufacturing and services. Third, investment is necessary for meeting the most basic development needs. Almost 740 million people still lack access to electricity; one-quarter of the world lacks safe drinking water; and digital infrastructure in many EMDEs remains rudimentary. Bridging these gaps requires sustained investments in infrastructure, climate, energy, education, health, and technology. | | Filesize | 4082656 MB | | File Format | PDF | | [ View / download original document ] |
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