Deficits are problematic if they finance consumption, not productive public investment on infrastructure.

Investment simultaneously generates income and expands productive capacity.

The Government has made a strategic and productive investment in education.

The European Commission s recent decision to grant member states some flexibility for productive public investment linked to EU structural funds is a welcome step in this direction.

While large deficits are usually undesirable, sometimes they can be benign or even desirable, such as in recession, wartime, or when used to finance productive public investment.

Why Public Investment?

Rather than securing investment for productive sectors of the economy, the financial industry has become adept at securing investment in itself.

Public policy and public sector investment matter, too.

Owners of private capital that could be allocated to productive investment will remain hesitant.

The alternative an increase in interest rates would undermine both consumption and productive investment.

Finally, while assets nowadays are much more liquid, this has not boosted long term productive investment.

By any definition, this is a huge investment that could have had many other productive uses.

Market access and foreign direct investment would help to promote economic growth and generate productive employment.

The right balance today requires creating jobs partly through additional fiscal stimulus aimed at productive infrastructure investment.

Front loaded public investment could be funded through an enhanced European Investment Bank.

But, too often in Africa s history, money that should have financed productive investment has been looted or squandered.

Investment, including foreign direct investment (FDI), played a central role in this connection, since it provided a crucial link between creation of productive capacity and international competitiveness.

Trading in derivatives by investment banks, hedge funds, and other market participants, reaps huge profits for traders while depriving the real economy of productive investment and job creation.

Urbanization will accelerate with supporting public sector investment.

Investment in equipment the key to strengthening productive capital in the tradable goods sector has generally suffered even more.

In addition, although net direct investment flows have become for developing countries the most stable external source of finance for productive investment, they have shown pro cyclical behaviour in recent years.

These inferior substitutes often imply exorbitant costs for borrowers and financing that is usually too short term for productive investment activity.

Such a move would deter excessive investment in productive capacity, and ease the implementation of a more flexible exchange rate regime.

Public sector investment will shift toward education and R D.

In a time of crisis, countries in which luxury goods play their selective role effectively are the safest bets for productive investment.

Issues of poor productive investment and policies for growth with equity, with special emphasis on expanding employment opportunities, should be urgently addressed.

Private investment, particularly in productive sectors, remained low due to an ongoing lack of confidence of potential investors in the political situation.

Public sector co investment properly targeted, however, could shift these incentives by lowering the cost of private technology investment.

To improve environmental public policies, in contrast with the current economic model, in all of the productive sectors.

Second, the investment would boost latent public health in that region.

Vice Ministry of Public Investment and External Finance (Ministry of Finance)

Public investment and donor support are also important in this regard.

15. Underlines the importance of competitive and inclusive private and public financial markets in mobilizing and allocating savings towards productive investment and thus making a vital contribution to national development efforts and to an international financial architecture that is supportive of development

12. Underscores the importance of competitive and inclusive private and public financial markets in mobilizing and allocating savings towards productive investment and thus making a vital contribution to national development efforts and to an international financial architecture that is supportive of development

12. Underscores the importance of competitive and inclusive private and public financial markets in mobilizing and allocating savings towards productive investment and thus making a vital contribution to national development efforts and to an international financial architecture that is supportive of development

A vibrant domestic investment base will emerge only if the private sector is induced to engage in productive activities by encouraging domestic investments.

That is why the world s wealthier economies, those with the most productive market systems, also have large public sectors.

And, as public investors, they are likely to have a better understanding of investment projects that depend on public policy.

Most people saw the consolidation of smaller firms into fewer, large firms as a stabilizing development that rewarded success and allowed for further productive investment.

An agenda for action could deal with all generic issues related to enhancing productive capacities in trade, technology and investment flows and exchange of experience.

Public investment must be matched with private capital to accelerate these grids deployment

An emphasis on investment shifts the focus of development strategy to the entrepreneurial class and its interaction with the state, including whether and how public investment crowds in private investment.

Private investment in the supply of public and semi public goods such as infrastructure, health care, communications has become more widespread.

Particularly important in this regard are non trade policies, which promote the development of productive capabilities through capital investment, skills acquisition, organization change and technological modernization.

Another line of suspicion against public lending is that it crowds out private investment.