FE Report
Bangladesh needs to invest US$ 74 billion to $100 billion (at 2010 prices) until 2020 for developing its poor infrastructure and reducing poverty to an expected level, a World Bank report said Wednesday.
The Bank in the "Reducing Poverty by Closing South Asia's Infrastructure Gap" report, released Wednesday, said Bangladesh is still far behind the infrastructure development as its road, energy, telecom and water & sanitation sectors still need huge investment.
The report, the first analysis of the region's infrastructure needs by the World Bank (WB), that includes Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka, has said the region could address its "enormous" infrastructure needs by tapping private and public sector funds as well as by introducing reforms.
The report said Bangladesh is on the third position in the South Asian region in terms of total investment for infrastructure development with 7.9 per cent after India 79 per cent and Pakistan 12 per cent.
The Bank report further said South Asia needs to invest as much as $2.5 trillion on infrastructure by 2020 to bring its power grids, roads and water supplies up to the standard needed to serve its growing population.
The WB report said total road network (kilometres) per 1000 people is also low in Nepal, Afghanistan and Bangladesh. In Maldives it is also low, but it is explained by geographical reasons. And only 29 per cent of Afghanistan's roads, and 10 per cent of Bangladesh's roads are paved.
Afghanistan, Nepal and Bangladesh have the worst access rates to telecommunication in the region. Nepal has only 47 telephone lines per 100 people, which is the lowest number in the South Asia Region (SAR). It is behind Afghanistan, which has 54 telephones per 100 people, it matches Sub-Saharan Africa (SSA), where 54 people have the access.
In electrification, Afghanistan, not surprisingly, is the worst; a meagre 30 per cent of the population can rely on electricity-powered lighting at night.
Moreover, Afghanistan and Bangladesh (47 per cent) are closer to the 35 per cent founds in SSA than to the 71 per cent funds in SAR, the WB report said.
"Many people in South Asia remain unconnected to a reliable electricity grid, a safe water supply, sanitary sewerage disposal, and sound roads and transport networks," said Philippe Le Houérou, WB's Vice President for the South Asia Region.
The WB report said given that a significant share of the infrastructure investment in the years ahead in SAR will have to come from the private sector, it is interesting to note that some sectors-such as energy and telecom-have drawn a lot more private investors' interest than others .
On a country level, while India has the largest presence by far, with 85 per cent of regional private investment commitments, it follows Bhutan and Maldives, in terms of proportion of investment commitments with respect to GDP, it said.
"For the past twenty years, the South Asia and East Asia regions have enjoyed similar growth rates. Yet South Asia's access to infrastructure services lags significantly behind both East Asia and Latin America with some access rates comparable only to Sub-Saharan Africa," said Dan Biller, report co-author and Sector Manager of the Multilateral Investment Guarantee Agency Economics & Sustainability Group.
For instance, in South Asia only 71 per cent of the population has access to electricity, ahead of Sub-Saharan Africa at 35 per cent, but well behind the rest of the developing world at above 90 per cent. According to businesses in South Asia, a lack of electricity is the biggest barrier to their growth, the report added.
"Despite recent rapid growth and poverty reduction, the South Asia region continues to suffer from a combination of insufficient economic growth, slow urbanisation, and huge infrastructure gaps that together could jeopardise future progress. It is essential to make closing its huge infrastructure gap a priority," said Luis Andres, report co-author and Lead Economist for Sustainable Development for the South Asia Region at the World Bank. Governments in the region need to ensure that infrastructure access is extended to people who need it the most: women, the poor and marginalised social groups, the Bank report said.
According to the report, South Asian policy makers should invest in rehabilitating and maintaining infrastructure assets to deliver services efficiently and sustainably, moving away from the "build, neglect, and rebuild" mindset.
The World Bank has a portfolio of 96 active infrastructure projects in the region, with total commitments of $19.8 billion.
