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Consultancy boss warns hard Brexit will hit infrastructure investment

FIDIC chief executive Nelson Ogunshakin

Growing fears about a so-called hard Brexit and other moves worldwide to introduce “divisive” trade barriers have prompted global engineering consultancy body the Federation Internationale des Ingenieurs Conseil (Fidic) to take the unprecedented step of speaking out and warning of the risks to the industry and to infrastructure investment.

Its chief executive Nelson Ogunshakin told New Civil Engineer that as a global organisation representing more than 1M civil engineers working for 40,000 firms in 100 countries worldwide, Fidic had a responsibility to speak out. He said it wanted to make the point “very forcefully” that closing borders and looking inward is a counterproductive, backward step.

“Our industry is an extremely diverse one, both in terms of the skills and expertise it contains and also the people who work within it,” said Ogunshakin. “International consultancy and engineering firms and the sector they work in are truly global and the future health of both depends on free trade and collaboration across national borders.

“Similarly, trade barriers discourage free flow of global investment funds into the infrastructure asset class which is highly needed as an engine for economic growth for both the developed and emerging market.

“Any national moves towards restricting flow of investment would not only have negative impact on a nation’s gross domestic product, it would create uncertainty, lack of confidence and ultimately withdrawal of existing and potential future investment on major critical infrastructure investment in to the country,” he said.

“Trade barriers benefit no one in the long run. They are divisive, can create a dangerous economic environment and we need to resist them,” he added.

Fidic works closely with the multilateral development agencies like the World Bank and works as an umbrella body for consultancy organisations worldwide and so rarely speaks out on political issues.

But Ogunshakin pledged that in its dealings with the World Bank, the World Trade Organisation and national and sovereign governments, Fidic would continue to forcefully make the case for free trade while opposing protectionism.

“It’s vital for the continued vitality of the global trading environment for development, engineering, technical and consultancy services that we do so,” he said.

Ogunshakin was speaking after months of what he describes as unprecedented heightened debate about international trade.

Continuing uncertainty in Europe over Brexit and the UK’s future relations with Europe and the rest of the world has highlighted the issue of trade and access to open markets and borders. Similarly, US President Donald Trump’s protectionist sabre rattling in relation to China and Europe has further increased concerns.

“There are some worrying signs currently,” he said. “We have seen US President Donald Trump’s tariff war with China. China in turn saying that the international tariff and trade system doesn’t work for them and they want to see changes and India’s prime minister Narendra Modi has also made similar statements about the need to reform the trading environment.”

Ogunshakin also highlighted concerns about the management of the World Bank, where Jim Yong Kim leaves as president next month, three years before his term of office ends. He pointed to the ”unconstitutional” selection process which traditionally gives the US President a major say in the appointment.

“It will be very important for the World Bank to secure a new leader with the right track record, credibility and someone who is widely acceptable to its shareholders to deliver its strategic goals and objectives,” said Ogunshakin.

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