The World Bank has published a comprehensive report on the status of infrastructure provision and services in Asia Pacific, focusing on road transport, electricity, and water and sanitation. It was a remarkable feat to have compiled extensive and disparate data on the subject into a single volume, the first such effort concerning the region, but more importantly, “Infrastructure in Asia and the Pacific” underscores the need for well-thought-out planning and financing to maximize the benefits from infrastructure projects.
“We must focus on smarter investments. This doesn’t necessarily mean spending more money, but harnessing technology, Infratech, and building efficiencies based on data so we can do more with less,” says Imad Fakhoury, global director for infrastructure finance, PPPs & guarantees at the World Bank.
“We also need better ‘infrastructure governance’ – including strengthening policies, institutions and investments, better planning, robust project preparation, investment prioritization, screening to decide whether to procure a project publicly or with private-sector support, and strong attention to resilience, quality, transparency and fiscal sustainability."
Fakhoury says governance is also crucial for accelerating the move towards a resilient recovery stage as part of Covid-19 crisis response, and rebuilding better.
Careful investment planning helps raise economic growth rates, increases competitiveness, offers new economic opportunities, and bolsters improvements in human capital, the World Bank says.
Over the past few decades, the East Asia and Pacific and South Asia regions have enjoyed strong economic growth and steady social development. East Asia has experienced steady growth levels of 4.1 to 4.5 percent over the past five years, led primarily by China and ASEAN countries, and regional poverty has been significantly reduced. South Asia has become the fastest-growing economic region worldwide, with its constituent countries recording average annual growth rates of 6.1 to 7.6 percent from 2011 to 2017, led largely by India.
Nevertheless, both regions, which also account for 35.8 percent of the world’s extreme poor, face significant constraints in infrastructure investment. This is exacerbated by the Covid-19 pandemic and the short-term challenges of a slowing global economy, higher borrowing costs, and geopolitical tensions. Longer-term, the regions are highly susceptible to the effects of climate change, so infrastructure development must be sustainable and climate resilient.
Says the report: “When it comes to infrastructure promoting economic and social development, quality is as important as coverage. Worldwide, governments and their development partners increasingly recognize the importance of efficiency and resilience of infrastructure delivery systems and quality of service outputs. Infrastructure should be safe; resilient with respect to natural disasters and the effects of climate change; and of sufficient structural integrity to remain cost-efficient over the lifecycle of the asset.”
The call for better governance in the delivery of infrastructure services parallels efforts in the private sector to incorporate environmental, social and governance (ESG) strategies into their operations.
In the infrastructure sector, there is a growing clamor among investors for companies to give stronger consideration to the impact of their policies and activities on the environment and the communities where they operate as such considerations will affect the sustainability of their business in the long run.
The World Bank report provides snapshots of the countries in Asia Pacific in terms of the status of access, quality, and costs of their infrastructure services, and a regional view that allows individual governments to assess their standing in comparison to their neighbors, thereby facilitating their infrastructure planning and financing. It is hoped that the report will lead to a more extensive body of knowledge on the health of infrastructure provision worldwide.