Localizing value creation in infrastructure projects

Infrastructure services provide the foundation for the development of any country and contribute to poverty reduction and growth, both directly through improving access to vital resources such as water and energy, and indirectly by enabling access to other key resources such as schools, hospitals and markets. In partnership with governments, business has an important role to play in building infrastructure for development.

That being said, much of the funding invested in infrastructure construction in developing countries does not benefit contractors, suppliers and workers from those countries. Increasing the input of local labor, goods and services (‘local content’) in the delivery of infrastructure projects in low-income countries could make a major contribution to economic growth. At the same time it would open up opportunities for the poor to participate in the growth process through the creation of jobs in the construction and supply industries. A recent briefing note (pdf, 32 pages) by Engineers Against Poverty and the Institution of Civil Engineers argues that the procurement process can serve as a powerful tool to promote local content in infrastructure construction.