Road and Rail Infrastructure in Asia

OECD

• Publisher: OECD
• Year: 2018
• eBook ISBN: 9789264308312
• Topic: Ciencias sociales
• Subtopic: Sociología

Chapter 1. Introduction and case studies on road and rail infrastructure in Asia: Creating quality infrastructure

There is a considerable need for additional infrastructure investment in many Asian economies, and future increases in population, economic growth and climate change will result in additional demand for infrastructure. As well as increasing investment in infrastructure, policy makers will need to work to ensure the quality of these investments. Quality infrastructure is designed and implemented taking into account a life-cycle perspective, employment creation, social and environmental impacts, alignment with broader development strategies, and resource mobilisation. Quality infrastructure generates positive externalities benefiting economic development and well-being. Examples of the incorporation of these principles in recent road and rail projects in seven Asian countries are discussed in this chapter through 16 case studies.

Introduction

Road and rail infrastructure – along with other transport, energy, telecommunications and water and sanitation infrastructure – is essential for development. Investments to improve access strengthen connectivity, allow for the expansion of economic activity and can help to reduce rates of poverty. While additional investment in infrastructure is needed in much of Asia, enhancements to the quality of infrastructure projects are also needed to foster sustainable development in the region. This chapter outlines broadly the state of infrastructure in the region and the relevance of investing in quality infrastructure. Some of the possible ways in which the principles of quality infrastructure have been implemented in practice are illustrated with case studies on recent road and railway projects in Asian countries.

The infrastructure demand in Asia is very large. Asia and the Pacific will need USD 1.7 trillion annually from 2016 to 2030 to cope with climate change and maintain its strong rates of economic growth, according to ADB estimation (ADB, 2017[1]). Using a sample of 25 economies, it is estimated that the climate-adjusted need is about 1.34 trillion annually from 2016-2020. Nevertheless, only USD 881 billion has been invested in the region in 2015 amounting for about 66% of the needed amount.1 East Asia is by far the leader in infrastructure spending and Southeast Asia is lagging behind. Spending in East Asia accounted for 80% of the region’s total investment in 2011, followed by South Asia with 14% and Southeast Asia with 6%.2 While the spending in East Asia and South Asia was close to 6% and 5% of subregional GDP respectively, it only represented 2% of subregional GDP in Southeast Asia. At the country level, while considering Emerging Asian countries (the ten ASEAN Member States, China and India), the spending in China, Viet Nam and India reached over 5% of GDP in infrastructure, while that of Malaysia or Thailand was relatively low. In particular, climate-adjusted estimates between 2016 and 2030 show that 56.3% of investment needs are for power, 31.9% for transport, 8.7% for telecommunications and 3.1% for water and sanitation. While this might be aligned with Asia’s effort to increase connectivity, ADB further mentioned that maintenance and rehabilitation will gain more importance as the infrastructure stock increases. The ratio of new investment to maintenance and rehabilitation costs is estimated to be 3:2 with climate adjustment.

Improving Asia’s infrastructure means not only constructing new roads or energy plants but also ensuring their quality. The rankings of the World Economic Forum (WEF)3 demonstrate the need in Emerging Asia for both more and better infrastructure. For example, despite their growing economies, Viet Nam and the Philippines are ranked 79 and 95 respectively out of 138 countries in terms of infrastructure in 2016, though they did improve from 90 and 105 in 2011 out of 142 countries. Looking specifically at road quality, the same countries are also lowly-ranked, though Viet Nam has improved its road quality.

Similar conclusions emerge from the sub-index of the Logistics Performance Index (LPI) of the World Bank (2017[2]) in 2016 on the quality of trade- and transport-related infrastructure. On a scale of one (low) to five (high), infrastructure’s quality in Lao PDR sc...

Table of contents

• Title page
• Legal and rights
• Foreword
• Acknowledgements
• Executive summary
• Overview
• Chapter 1. Introduction and case studies on road and rail infrastructure in Asia: Creating quality infrastructure
• Chapter 2. Building up local governments' capacity to implement infrastructure investment
• Chapter 3. Improving infrastructure financing
• Chapter 4. Bringing development strategies and infrastructure planning into closer alignment: A special focus on the case of Viet Nam
• About the OECD