Bangladesh can gain maximum in Asia-Pacific region by improving infrastructure: UNESCAP

Reducing infrastructure gaps can boost sustainable development in ‘countries with special needs’, says a United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) report that measures progress in 41 Asia-Pacific countries.

The group of 36 LDCs, landlocked developing countries (LLDCs) and small island developing States (SIDS) in the region are collectively known as countries with special needs.

They annually require investment equal to 10.5 percent of their GDP to provide transport, energy, information and communications technology (ICT), and water supply and sanitation to an increasingly urbanising population, which is also highly vulnerable to the impacts of climate change.

Improvements in these infrastructure sectors to bring those countries on par with the other developing Asian countries can increase the combined national income of those countries by up to 6 percent by the year 2030.

“The largest estimated gain is for Bangladesh at $35.5 billion, followed by Kazakhstan at $26.6 billion,” the report said.

The report released on Monday highlighted that geographically disadvantaged nations and the LDCs in the Asia-Pacific region can boost national incomes, educational attainment and life expectancy by reducing their sizeable physical infrastructure gaps.

The report said that investment in infrastructure development improves economic productivity and the quality of growth.

“It boosts economic growth and job creation through enhanced connectivity and production networks, promotes social development through improved access to public services and new opportunities, and enhances environmental sustainability through a low-carbon, resource-efficient and climate-resilient societal order.”

Current levels of infrastructure funding in these countries fall short of their financing needs by about 3 to 4 percent of GDP, according to the report titled ‘Asia-Pacific Countries with Special Needs Development Report 2017: Investing in infrastructure for an inclusive and sustainable future’.

It was said in the report that a 1 percent increase in a composite measurement of these four key infrastructure elements – presented as an Access to Physical Infrastructure Index (APII) - results in a 1.19 percent GDP increase in the CSN group.

“As infrastructure provides wide economic, social and environmental benefits, it constitutes an essential part of the 2030 Agenda for Sustainable Development,” ESCAP Executive Secretary Shamshad Akhtar said in the preface to the report.

“Infrastructure deficits also constrain social development and weaken environmental sustainability,” Akhtar added.

The APII evaluated the condition of these four infrastructure sectors in 41 Asia-Pacific countries over time and found uneven progress among those countries in special needs group, with LDCs comprising seven out of 10 poorest-performing countries.

It found major inadequacies in transport infrastructure and energy in the LDCs, and said while SIDS needed to strengthen ICT infrastructure, and LLDCs should prioritise investment in transport infrastructure in order to reduce trade costs.

The group will not be able to raise the required financial resources on their own, the report said and recommended a mix of options to fund infrastructure development.

Some LDCs can enhance domestic public resources, whilst other LDCs and particularly for SIDS, donor assistance will continue to be a key financing source, it added.

In contrast, resource-rich LLDCs can continue to rely on non-tax revenues from commodity exports.

The report also recommended prioritising domestic revenue mobilisation for infrastructure investment and improving the efficiency of public expenditure.

It has called for private sector involvement through private-public partnerships.