Friday, 12 April 2013

UK Shipping Industry is in Need of Foreign Investment Money

There have been reports released recently that indicate that the United Kingdom is going to require at least £400 billion invested into the nation’s transport infrastructures over the next ten years in order to be able to compete efficiently and effectively in the future global economy. Although the government announced they would be increasing their annual public investment into the sector by £3 billion in 2015/2016, analysts believe that these are mere drops in the bucket compared to what is needed now and in the future. The government is not solely responsible for these huge infrastructure projects that are needed. The private sector also has to put in their share in order for it to work for the benefit of the country. Analysts believe that herein lies one of the problems.

Building and maintaining the UK’s transport infrastructures are essential to the country’s future economy and it is evident that much more investment is needed before the nation can reach it’s full potential. The UK only has so many limited investors domestically that have the money and the means to fund these massive capital investment projects. As a result, it has had to seek sizable private investment from investors in other countries. The UK is not alone in looking for funding for much-needed infrastructure projects and port improvements. Most countries in the world have found themselves in the same financial situation, as they all attempt to prepare themselves for the (expected) doubling of the global economy, by the year 2020. Every nation wants to be ready to contribute and compete, but like the UK, many lack the investment money. As a result, major foreign investors with the liquid capital and available credit to invest, have many choices as to where to invest and what to invest in.

The UK is attracting some investment from the oil-rich and cash-positive middle east countries such as the UAE and Qatar. Dubai’s DP World, one of the world’s largest port operators, already has a huge stake in the soon-to-be-completed London Gateway. Their £1.5 billion investment has created thousands of jobs, while stimulating the local economy. As well, it was just recently reported that Qatar is considering investing approximately £10 billion in infrastructure as well as energy and other projects in the near future. Although it is early in the discussion phase, industry experts say it looks promising. These examples of market opportunity truly define the global economic free-enterprise market system. The reality is that in the credit-based global economic system, cash is still king. That being the case, rich nations such as the UAE and Qatar are just taking advantage of their surplus cash and using it to make wise investment decisions.


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