If President-elect Trump successfully pushes through even just a fraction of the $1 trillion plan he proposed, hundreds or even thousands of firms stand to benefit. Many of these companies will be American, and they will help President-elect Trump build a powerful political machine. But a recent promise by Qatar serves as a reminder that some of the interests looking to gain from Trump’s infrastructure investments will be foreign. Reuters reports:
Qatar plans to spend as much as $205 billion on infrastructure between 2013 and 2018, the acting head of project finance at the state’s largest lender said on Tuesday, as the country invests its vast hydrocarbon wealth in a development boom.
The Gulf Arab state is spending billions of dollars in areas such as transport, electricity and water generation and housing, in an effort to improve its economy and build towards its hosting of the 2022 soccer World Cup.
The government has been ramping up its own spending as part of this push. The budget for fiscal 2013/4 is up 17.9 percent to 210.6 billion riyals ($57.8 billion), thanks to wealth accrued as the world’s largest exporter of liquefied natural gas.
Much of the planned infrastructure spending will be financed by the government level. But significant funding still needs to come from both local and international lenders, said Yusuf Saeed, acting head of global structured finance at Qatar National Bank.
Trump has not commented on how and whether foreign interests might be involved in the infrastructure plans. But Qatar won’t be the only foreign interest knocking on the doors of Trump Tower/the White House, nor will overseas assistance come only in the form of capital investment offers. Much of the privatization expertise is in Europe, which has decades of experience with the kinds of private-public partnerships Trump will likely pursue. Companies like Spain’s Cintra already have deals to construct and operate highway projects with American state governments. American firms and investors are at a disadvantage because they don’t have competencies in evaluating and participating in these kinds of deals.
This is a dynamic to watch closely. European knowledge of private-public partnerships can help save money, but they can also cause PR nightmares: Virginia and Texas have faced criticism for granting road and bridge concessions to European companies. Using foreign money like the Qatari funds for even more building projects (and to create even more jobs) will also be a temptation. Federal and state governments should tread carefully here, particularly given the nationalist wave that Trump rode to victory.