Investment Gaps can turn into National & Global Economic Opportunity

U.S. Economic Infrastructure
Credit: Pakistan & Gulf Economist

Overcoming the Culture and Economics of Colonialism with Reciprocal Partnerships and Public-Private Engagements

Social criticism is building in the mainstream media and throughout public opinion about the extraction of exploitable resources throughout the developing world. The Middle East, Asia, and Africa and to some extent South America represent, for some critics, a new age of colonialism in the 21st century. China, Russia, and the EU currently have contracts for resources in these developing countries which have been characterized as predatory and one-sided. The US reported on extending its presence in Afghanistan after $1 trillion in exploitable minerals was discovered.

However, for mineral-rich countries like Afghanistan and the Democratic Republic of the Congo, these engagements do not have to continue the form of state-building initiatives that have historically drained both superpowers and the developing world of resources where the security costs have outweighed the benefits of trade and diplomatic relationships have suffered numerous international conflicts. Criticism has also emerged in the public against the US government building up infrastructure in other countries like Afghanistan and Iraq accompanied with war while American roads, bridges, rail lines, water, and energy facilities continue to deteriorate with a lack of initiative in policy and public-private engagements.

The reality for countries like Afghanistan and the Congo is a continuous desire for development and for superpowers a continuous need for resources. What needs to change is the manner of public-private engagements, terms of bilateral trade agreements, and security and aid programming between countries to work more efficiently in producing more successful trade partners at all stages of development. And if the US is going to build infrastructures such as roads, rail systems, and airports in Afghanistan, then Afghanistan’s mineral resources can certainly contribute to the development of US infrastructure. This development should target current investment gaps where funding does not yet exist.

 

Evaluating the Investment Gaps in Surface Transportation

According to the most recent Infrastructure Report Card and the Failure to Act Report, the largest investment gap in critical infrastructure in the US is surface transportation especially in growing cities currently suffering from traffic congestion. Only 46% of needed road construction is funded at $941 billion leaving $1.1 trillion unfunded. By 2025, this particular investment gap will cost $3.9 trillion in GDP, $7 trillion in business sales, and 2.5 million job losses. Each household will lose $3,400 annually between 2016-2025 in disposable income and $34,000 cumulative income. Between 2026 and  2040, these losses will have increased to $5,100 and $111,000 annually per household.

During this process, operating costs for businesses will rise and be passed down to employees and consumers. Employees will be required to work longer hours for less wages and businesses and cities will produce less GDP per capita with the rise of traffic delays, fuel costs, and other complications. Truck Vehicle Miles of Travel (VMT) increases are slightly higher than vehicle VMT. Across 470 urban areas in 2014, there was a total of 6.9 billion vehicle hours of delay on roads due to congestion. These delays in ground transportation cause a ripple effect in inland-water, marine and air transportation for both passengers and cargo. For cargo, however, this problem directly results in losses of exports and lowers the competitiveness of the U.S. markets in global trade.

 

The Call for New Energy Efficient High-Speed Rail Tech

This problem, however, creates some opportunities for business growth of new rail lines in and around major cities and between major cities supporting regional passenger and cargo travel. New rails would need to compete with short distance regional air travel of passengers and cargo so that ground transportation becomes more energy and time efficient than the logistics of air travel over short distances. Rail systems running from East to West coast would not compete with air travel times, but they can compete with the time and energy logistics of air travel over short distances. In addition, heavy cargo that still requires ground transportation and can be allocated to new rail systems that can outcompete trucking.

This, in turn, absorbs some losses endured by airports and airlines where short distance travel is not as profitable and has been supported historically by government subsidies in order to maintain some short distance connections. This strategic investment would allow airports and airlines to focus on more profitable longer distance travel which would, in turn, improve closing the investment gaps needed in airport facilities especially in support for increased efficiency in exports. Currently, the investment gap for airport facilities is at $42 billion as only 73% of airport facilities have funding.  

 

Business Opportunities for Shared Ground, Air, and Water Travel Interfacing and Security

Overall, these challenges create business opportunities to further merge the technological and security interfaces of truck, rail, air, inland-water, and marine travel to directly improve travel efficiency for the imports and exports of cargo in the US and globally improving national security and lowering the risk of theft liabilities throughout the entire travel networks. Shared or merged interfacing in booking travel for passengers and cargo space enables these service providers to offer more travel options across ground including rail and vehicle travel, air, sea, and inland water capabilities while also eliminating some financial losses due to overbooking or underbooking seats and cargo space with respect to travel times and routes. This may help to offset some of the investment gaps in shipping and port facilities where the investment gap is $15 billion.

The networked security interfacing should in addition lower risk of theft and reduce insurance liability costs for cargo and increase national security in screening illegal material being trafficked into and throughout the country.  Increased safety and security of passengers and cargo will create job development and technology manufacturing in private and cybersecurity industries and enable these industries to work more efficiently across land, air, and sea travel networks.

Job Growth in Automotive and Robotics Industries

In addition to added cyber and security jobs, job growth associated with automotive repair including new automotive technology in robotics will absorb some of the gross job losses resulting from rising costs of transportation and operations. Currently, there is an $86 billion backlog of deferred maintenance and replacement needs according to National State and Good Repair as 40% of busses and 25% rail transit assets in poor or marginal condition. In turn, this creates opportunity for growth in both the automotive industry and vocational education programs.

As automotive repair and maintenance means and methods continue to grow into the industry of Autonomous Systems known as robotics, this creates opportunities for the US Military. This is currently an area where the US has fallen behind countries like China, so, these types of public-private opportunities may enable some new opportunities for the US Industrial Defense Base, (IDB) to close this distance and to invest in maintaining an ongoing R & D commitment in this area of technology while ongoing job opportunities for both contractors and trained military veterans can also be secured.

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