Industrial Insight

The coming capital equipment investment boom… | October 11, 2010

Mina Kimes, writerOctober 11, 2010: 4:14 AM ET

Emerging-markets economies seem to have it all these days. Their lands are stocked with natural resources. Their national finances are strong. And a rising middle class is spurring breakneck growth in their businesses.

Yet China, India, Brazil, and other developing countries share a glaring problem: inadequate infrastructure.

For example, 400 million people in India don’t have electricity, according to the International Energy Agency. Brazil is one of the world’s biggest commodities producers yet has one of the weakest port systems. Meanwhile millions are moving to cities in countries like China, increasing the need for power and transportation.

Emerging-markets governments are committing $6.3 trillion to address the infrastructure problem, according to a new report by Bank of America Merrill Lynch (BAML). The bulk of it is going to water systems, energy, and transportation. Kate Moore, one of the authors, says governments will increasingly direct the money to public-private partnerships. “They have plans to have private companies take a larger role,” she says.

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About author

I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.







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