Why is infrastructure development important

It was important to find new methods of financing for such infrastructure elements as transport, he said. In early s, his Government had carried out a railroad restructuring programme. Initially, both the Government and the donors made their decisions based on financial interests, without taking into account the implications of railroad closures on the population. Later, however, in order to maintain service, some of the lines were leased out to private companies. In the long term, both public and private sides profited.

In , with admittance to the World Bank, it began constructing its infrastructure. Official development assistance loans were provided to East Asian nations for building infrastructure, and technology was transferred through technical assistance. Private investment followed to construct industrial capacity. That idea -- that the development of infrastructure was the basis for economic growth, which, in turn, created the conditions for poverty reduction -- had been maintained, as Japan expanded its ODA beyond East Asia.

Private capital flows had been concentrated in some upper middle-income countries and to specific sectors, namely, telecommunications and energy, he said. The benefits that private capital could bring had been amply illustrated by the experience in the last decade, even in the poorest countries, but in order to secure and expand the inflow of private capital, greater market reform would be necessary.

Infrastructure served as a means for wider development ends, he said. Yet, the link between infrastructure development and wider development outcomes was still poorly understood. Infrastructure development projects had to meet the true needs of the local residents, especially the poor, and they would be more successful with the participation of local residents.

Similarly, in 13 African countries, as well as in many of the Asian States, the water supply projects carried out by Japan and the respective host nations had achieved various social development impacts. Infrastructure development was the sector that the preference of the beneficiaries should be most respected and where the demand-driven approach should always be taken.

To build such a foundation, it was important to make clear the link between infrastructure and poverty reduction. Many examples in poor countries demonstrated that investment in infrastructure led to a use in gross domestic product GDP. Growing infrastructures also increased employment and facilitated access to markets. The tragedy, however, remained that many poor countries still had no access to developed infrastructures, and had to pay more for the services that they did get.

A paradigm shift was needed in providing infrastructure services, she continued. While some governments had succeeded in attracting investments into telecommunications and power, least successful were attempts to attract private investment in transport and water. Also, capital flows were volatile and investments had been unevenly distributed among the countries. Official flows towards infrastructure had fallen by almost half in the last 10 years.

Water supply services and road infrastructures had actually been deteriorating, largely due to a lack of maintenance.

Looking forward, the needs were going to grow even further. In Africa and Asia, the urban populations were expected to double. The question was how the new paradigm -- which included increased financial flows to the infrastructure sector, improvement of the development impact of infrastructures, and development of new approaches to infrastructure services provision -- could be made to work for the poor.

The decline in external finance must be reversed, and the gross waste of infrastructure resources eliminated, she said. At the same time, the old paradigm of direct public provision must be avoided. This is an incredible start to flourishing infrastructure in Cambodia. Considering the difference in foundational support between Cambodia and Singapore, it is vital to highlight the impacts of dependable roadways and mass transit systems.

As Cambodia moves forward with its internal developments, international humanitarian organizations and countries worldwide must discuss how global poverty can be alleviated with proper infrastructures in impoverished countries. Hopefully, with international discussion and support, nations worldwide can soon take a step forward to a better quality of life. Why is Infrastructure Important? Cambodia: Improvements Underway Cambodia, on the other hand, is almost times the size of Singapore.

November 11, 0. November 10, 0. Most rural areas don't have adequate energy infrastructure, which hinders productivity within the areas and limits any contribution to the economy. This is why the DBSA is focused on creating an inclusive and integrated rural economy through energy infrastructure.

To do this, we plan to develop and finance infrastructure projects that will offer everyone in South Africa access to affordable, reliable, modern and, more importantly, sustainable energy. This will help power the country and ensure economic growth in bo th rural and urban areas. Water is a basic need for human survival. Investing in water and sanitation is an effective way of improving the economy. It will allow communities to live healthily, improve the health sector, and improve productivity in the country.

Water affects the health sector and has a ripple effect on education, construction, manufacturing, and more. With integrated infrastructure planning , various sectors can benefit and thrive, ensuring economic growth beneficial for all citizens. That is, the greater the energy used per capita of a country, the higher the per capita income and productivity levels of a country.

This shows the importance of increasing energy production for economic growth. This will meet around 70 per cent of expected energy consumption of the Indian economy and the balance will be met through imports.

Thus, even though the domestic production of energy in India is projected to increase significantly, dependence on imports will continue to remain high, particularly for crude oil where nearly 78 per cent of the demand will have to be met through imports by the end of the 12th Plan i. Further, it is estimated by the Planning Commission that the import dependence for coal, liquefied natural gas LNG and crude oil taken together in the terminal year of the 12th Plan is likely to remain at the 11th Plan level of 36 percent.

India has both non-renewable energy resources such as coal, lignite, petroleum and natural gas and renewable energy sources such as hydro, wind, solar, biomass. This large increase in the additional capacity is not impossible but actual delivery of power depends critically on solving serious fuel availability problems that arise relating to coal and natural gas.

Uncertainties about fuel availability would seriously dampen investment activity in this sector, especially since about half of the generating capacity is expected to come from the private sector and they will not be able to obtain the required finance if fuel supply issues are not resolved. Road transport is another important infrastructure which is essential for movement of goods, raw materials and fuel. The availability of transport expands the market for agricultural and industrial products and thereby enables the producers to produce on a large scale and reap the benefits of the economies of scale.

Besides, transport development helps to open up more regions and resources for production. Some parts of a country may have abundant forests and reserves of mineral resources but they remain unexploited for production because they are remote and inaccessible through means of transport.

There is thus a need for linking these backward regions with building of roads and railways so that their untapped mineral and forest resources be utilised for production. India has one of the largest road networks in the world spread over around 49 lakh kilometers. It comprises national highways, expressways, state highways, district roads with length details given in Table In the last few years there has been some progress in the development of national highways and in rural roads but much more needs to the done.

The National Highways NHs with a total length of 92, km serve as the arterial network of the country. A total length of around 22, km has been completed till March There are some difficulties in the way of developing national highways due to acquisition of land from the owners from which national highways have to pass through.

In India a special effort is needed to speed up road connectivity in Jammu and Kashmir, North East and other special category States. A good start had been made in the development of roads in North East in the Eleventh Five Year Plan and is proposed to be pursued with greater vigour in the 12th Plan in which enhanced connectivity of North East has been given a high priority.

Furthermore, the construction of roads and upgradation of national highways NHs in the districts affected by Left-Wing extremism in Andhra Pradesh, Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha and Uttar Pradesh have been taken up for inclusive growth of these areas. Railways are an important infrastructure as a means of transport whose expansion and efficient working is required for rapid growth of the economy.

The demands of a growing economy such as ours require railways to expand its freight network, increase its ability to carry larger weight per wagon and the efficiency of the rail system for faster delivery. Besides, the railway requires improving the reach and quality of its passenger services. To meet the growing demand for carrying goods and passengers the current focus of Indian Railway should be the creation of additional capacity, modernisation of its existing network, improvement in asset utilisation and productivity.

Besides, it should pay attention to modernisation of its rolling stock and maintenance practices to bring about overall improvement in the quality of its services. It may be further noted that the Indian Railways is expected to generate its internal resources for its expansion and modernisation. The broad objective of Indian Railways should be to develop a strategy to be a part of an effective multi-modal transport system and to ensure an environment- friendly and economically-efficient transport system.

Airport development is a basic infrastructure requirement for international connectivity, especially because the demand for air travel is projected to grow rapidly in India.

There had been a significant progress of airport development in the Eleventh Plan period with the development of four new airports at Bangalore, Hyderabad, Delhi and Mumbai under public-private participation PPP mode. To expand airport infrastructure in India, modernisation of airport infrastructure in metro and non-metro cities and construction of Greenfield airports are under consideration of the government.

Development of 35 non-metro airports which have been identified based on regional connectivity, development of regional hubs etc. Out of 35 metro airports work has been completed in 33 metros and in the remaining two airports of Vadodra and Khajuraho work is in progress.

Ports are another important infrastructure for international trade connectivity. It is mainly through these that the goods are exported to other countries and the goods and raw materials are imported.

Without efficient ports it is not possible to expand foreign trade. In the Eleventh Plan period 12 some problems were faced for expansion of the Indian ports because several issues had to be resolved for the proposed public-private participation PPP in this connection.

These have now been resolved and it is expected that in the next five years there will be significant progress in this area. As regards minor ports which come under State governments, there has been good progress in the Eleventh Plan period. During major and non-major ports in India handled a total cargo of million tonnes reflecting increase of 5. This can mainly be attributed to an increase of 1.

In contrast, traffic at non-major ports increased at around 9.