I wonder if the public would be so optimistic about these glorious mega-projects if they were mindful of the long-term costs. The Eurasia Tunnel, for example, is being paid for with a $1.3 billion financing package on a build-operate-transfer agreement, that will not see handover until 2043.
The argument is that these infrastructural projects will help grow the economy massively — which may be true. Conversely, they could just saddle the country with massive debts, extortionate interest repayments and burdensome contractual agreements with foreign agencies and corporate interests.
The experience of the Asian Tiger Economies, particularly through the 1997 and 2008 financial crises, ought to provide a salutary lesson for governments intent on building economies on debt.
There is always a balance to be struck between living within your means and investing in infrastructure… and between pursuing rapid economic development and maintaining non-financial assets such as ecology, culture and tradition. I just hope this nation has got the balance right.
Last modified: 9 May 2016
