In Tuesday night's speech, President Trump promised to rebuild America. “The time has come for a new program of national rebuilding. America has spent approximately $6 trillion in the Middle East, all this while our infrastructure at home is crumbling. With the $6 trillion, we could have rebuilt our country twice, and maybe even three times, if we had people who had the ability to negotiate,” he said. “Crumbling infrastructure will be replaced with new roads, bridges, tunnels, airports and railways gleaming across our very, very beautiful land.”
Trump says he'll spend $1 trillion on infrastructure through a combination of public and private investment. But like most of his other proposals in the speech, he was light on specifics: How much will the government spend exactly? Who will pay for the rest? Which projects top the list as most urgent?
To understand how this might unfold, it's helpful to look abroad. In the past, Trump has suggested that China, Dubai and Qatar have done things right, infrastructure-wise. (U.S. airports, he said last year during a presidential debate, are “Third World” compared with what those countries have to offer.) Those countries have, it's true, engaged in massive, flashy building campaigns over the past decade.
But take a closer look, and you'll find very little for the United States to emulate.
China spent more than $1.4 trillion on infrastructure in 2016, splurging on railroads, bridges, roads and telecommunications. Over the past decade, it has invested $11 trillion on these kinds of projects; economists say it will need to continue investing about $2 trillion a year to maintain economic growth at today's rates. These projects have been important — they've added more than 12,000 miles of high-speed rail (China is home to 60 percent of the world's high-speed rail) and 30 new airports since 2011.
Those are impressive figures. But it's not clear that the building binge has had much effect on the economy. One study out of Oxford University found that half of China's infrastructure investment destroyed economic value rather than creating it. (Think of ghost cities full of empty apartments and offices.) Additionally, it found that the vast majority of projects are delayed and over budget. This, even though China's autocrats can seize property and disregard regulation pretty much with impunity. “Unless China shifts to fewer and higher-quality infrastructure investments, the country is headed for an infrastructure-led national financial and economic crisis, which is likely to spread to the international economy,” the study's authors concluded.
The United Arab Emirates — home to Dubai — and Qatar also have invested heavily in infrastructure, using their oil-fueled budgets to build fancy new airports and transportation systems. That construction looks good, but it hasn't helped those countries' economies weather the international slump in oil prices. It's worth noting, too, that both countries have much lower labor costs than the United States does. That's in large part because those countries' construction firms rely heavily on immigrant labor. Numerous human rights groups have documented horrible working conditions for those laborers.
The World Bank's 2016 ranking of every country in the world, based on infrastructure. Find the whole chart here.
In fact, according to the World Bank, the quality of the United States' trade and transport infrastructure is high — higher than China or the Persian Gulf states. If we really want to learn something, we might instead look toward Western Europe. Countries like Germany and France have made infrastructure a priority, and they have the thriving transportation systems to prove it. They did that through a sustained commitment to upkeep and creative public-private partnerships. They may not hire the flashiest architects, but they've built stuff that works. And that's worth celebrating.