8 Emerging Trends For 2015 - Global And Regional Trends That Will Impact Island Jurisdictions Over The Next Five Years

This newsletter focuses on infrastructure trends: both global trends that are impacting island jurisdictions and regional infrastructure market trends. Infrastructure is a story of evolution. Over the years, infrastructure has been a catalyst for social and economic development, and the diversification of island economies.

Island jurisdictions are leveraging infrastructure to allow societies, economies, companies and individuals the opportunity to perform and live to their full potential. At the same time, the way we approach infrastructure itself is also evolving. Some of the shifts in the sector are sudden and disruptive. Others evolve slowly, ebbing and flowing in and out of political consciousness as governments and businesses react to changing circumstances.

For a second year, KPMG has tracked the annual tides and trends driving the world's infrastructure markets with a particular focus on how these trends are manifesting themselves in island regions.

Welcome to our Island Edition on Emerging Trends in 2015.

A number of the trends we identified last year remain key issues today, although, many have themselves evolved. In 2014, we argued that projects were stuck in pipelines; this year we have noted significant moves by governments, multilaterals and development banks to 'unclog' the pipeline.

Other trends from last year continue to simmer. Affordability of infrastructure remains a key challenge as does the need for greater transparency. Worryingly, technical skills continue to be underdeveloped and the international demand for infrastructure professionals and capabilities will only continue to grow and will present a challenge for island nations.

Not surprisingly, we have seen a number of new trends rise up the agenda as societies struggle to balance necessity against opportunity in prioritising their infrastructure spend. Political uncertainty and regulatory reform are becoming key risk factors influencing global investment decisions. Development banks and multilaterals are recalibrating their targets to focus on leveraging private finance in order to improve the flow of capital towards developing projects. Of particular significance to island jurisdictions is the emerging prominence of Asian investment through export financing in the Caribbean region and development banks.

Once again, we hope that this year's insights provide a worthwhile perspective on key trends and opportunities facing island regions in 2015. To discuss these trends and their impacts in more detail, we encourage you to contact your local KPMG infrastructure team.

Trend 1: Governments take action to unclog the pipeline

Infrastructure has never been higher profile globally. The G20 Summit, in Brisbane in November 2014, saw the formation of a Global Infrastructure Hub which - if armed with the right staff, scope and priorities - could help unlock trillions of dollars in private infrastructure spending. This may draw the attention of major infrastructure investors away from less-developed markets including the island regions.

In order to remain an attractive market for infrastructure developers, island jurisdictions may need to take a more interventionist approach, bundle projects to reach an attractive threshold, and improve capacity to develop robust business cases and procurement practices...