Infrastructure investment ‘crucial to South Asia’s growth momentum’

1 Oct 18

A lack of investment in infrastructure threatens to halt growth progress in South Asia and is a “roadblock” to addressing poverty, the Asian Development Bank has warned.

South Asia has become the world’s fastest growing region according to the World Economic Forum’s competitiveness report 2016-17. But unless it invests more in infrastructure, including power, transport and telecommunication, the growth will not be sustainable.

The bank said in a report today that to sustain its growth, South Asia should be investing almost 9.0% of its gross domestic product in infrastructure up to 2030.

India alone needs to invest $260bn, it added.

The paper, Infrastructure Financing in South Asia, said: “Unless it takes urgent steps, South Asia’s existing infrastructure could soon prove to be a roadblock in sustaining its growth momentum and addressing poverty and inequality.”

South Asia’s infrastructure development lags behind other regions, such as East Asia and Latin America and the Caribbean, according to the bank.  

There is particularly poor transport and connectivity and roads are deteriorating due to a lack of maintenance investment, the bank said.

The sub-region also performs worse than Southeast Asia and East Asia on access to electricity.

Only about 60% of the population in Bangladesh and 80% in India has access to electricity, compared to almost the whole population in countries such as the China, Thailand and Vietnam.

South Asia will also need to mobilise more private finance, the report said.

“The large amount of infrastructure needed requires enhancement of public expenditure through more efficient use of budget spending, in addition to leveraging the private sector through, for example, expansion of public-private partnerships,” it said.


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