generation and public transport are good examples of infrastructure that reduces greenhouse gas emissions and improves air quality. Where infrastructure threatens to damage the environment – or indeed the livelihoods of those who depend on it – we must minimise and make good on any potential harm. Not doing so means short-term gains at the longer-term expense of the environment and those who depend on it.
Climate change is another issue. Rising temperatures and higher sea levels mean infrastructure must be carefully designed – as all ADB infrastructure now is – to be resilient to changing, often extreme, weather patterns. The recent earthquakes in Nepal and Typhoon Haiyan in the Philippines in late 2013 are harsh reminders of the need to make sure all infrastructure can withstand potentially devastating disasters if we are to protect lives and economies. Between 2005 and 2014, disasters cost Asia and the Pacific $722 billion, or a distressing $198 million per day.
New infrastructure must meet the needs of urban and rural, rich and poor alike. With over 600 million in the region without electricity supply and over 360 million with no safe drinking water, vast and expensive power transmission or water networks are not always the answer. Home solar systems or mini hydropower may be a cheaper and better way of powering distant villages or poor communities unconnected to the grid.
Energy could also come from a neighbouring country such as Bangladesh’s purchase of electricity from Eastern India. The ADB’s experience in Laos, Nepal and other places has shown that involving communities in designing and maintaining local infrastructure such as irrigation or water systems makes for greater long-term efficiency and financial viability. In short, infrastructure must also be inclusive if all of Asia is to contribute to, and benefit from, the region’s growing prosperity.
We need fresh ways, beyond public funding, to pay for all this and development banks like the ADB must continue to promote that. Institutional investors, sovereign wealth funds, and infrastructure funds are all potential sources of direct finance as are liquid local bond markets. But attracting the private sector means more efforts to promote regulatory frameworks including enforceable laws on contracts, privatisation, and concessions.
Guarantees can entice pension funds and insurers to project bonds or project financing. Much more work must also be done to shape the region’s skills, laws, and political support for public-private partnerships (PPPs). Similarly, advisory support to create bankable projects and instil international bet practices for PPPs is crucial.
As a development leader then, we must consider all the interrelated dimensions of infrastructure development – technological, economic, social, environmental, governance, and innovative financing. It is beyond just bricks and mortar, concrete and steel.
The writer is vice-president Knowledge Management and Sustainable Development, Asian Development Bank.