The Transportation Infrastructure in Asia and the Pacific NCSL Legislative Summit July 22-26, 2008 New Orleans, Louisiana Transportation Committee North American Representative Office (ADB) July 2008 1
ABOUT ADB Established in 1966 ADB purpose to reduce poverty in Asia-Pacific 67 members from Asia-Pacific, Europe and North America AAA Credit Rating United States, Japan, People s Republic of China, India, Australia, Indonesia, & Canada are the 7 largest shareholders Diverse Clientele: ADB works with about 40 developing member countries, from the Caucasus to the Pacific Core ADB Business: about 80% of business with governments, remaining 20% with private sector Modalities: principally loans and grants, also guarantees and equity Scale of Financing: $11 billion for 82 new projects in 2007, with Pakistan, Viet Nam and India the largest borrowers Priority Sectors: Infrastructure, environment and climate change, regional cooperation and integration, financial sector, education. Themes: ADB integrates private sector development, good governance and capacity development, gender equity, knowledge and partnerships 2
THE UNITED STATES AND DEVELOPMENT When the United States became an independent nation in 1776: The average American earned about $1,000 a year in today s dollars, compared with $30,000 today. One in five children died before their first birthday, compared with about one in 143 today. On average, Americans were about four times richer than the people of the world s poorest countries; Americans are 100 times richer today. Poor countries have experienced improvement as well. Over the past 50 years, there has been more progress in reducing poverty and improving health and education than at any other time in history. Over this period: Diseases such as smallpox and river blindness that formerly afflicted millions of people a year, have been virtually eradicated. The average life expectancy worldwide has increased from 44 years to 59 years. Incomes in poor countries have tripled (compared with a 13-fold increase in Western Europe and a 17-fold increase in the United States). (source: Center for Global Development) 3
TOP U.S. TRADE PARTERS in ASIA & THE PACIFIC (ranked by 2007 U.S. Total Export and Import Value for Goods) The United States Top 30 Trade Partners Include: - People s Republic of China - Japan -Korea -Malaysia -Singapore -India -Hong Kong -Thailand -Indonesia -Philippines -Australia About 45% of U.S. exports go to developing countries today, compared with 39% a decade ago. 4
ABOUT DEVELOPING ASIA & THE PACIFIC Per capita income in developing Asia, in real terms, grew from less than US$ 170 in 1967 to more than US$ 1,000 in 2005. In 2007, Developing Asia recorded its highest rate of growth in two decades, averaging 8.7 %. More than 1.7 billion Asians live below the internationallyagreed to poverty line of US$ 2.00 a day, including nearly 600 million living on less than US$ 1.00 a day. Asia and the Pacific account for 2/3 of the world s 90 million children suffering from hunger. 1.5 billion rural residents are without access to basic sanitation and 566 million are without clean water. In urban areas, whereas 54 million city dwellers had no access to clean water in 1990 the number has now risen to 93 million due to people migrating from rural areas to cities. 5
WHY DOES INFRASTRUCTURE MATTER TO ASIA AND THE PACIFIC? A strong infrastructure network is fundamental for economic development. In Indonesia, research shows that the poverty incidence falls by 0.33 percent in good-road provinces and 0.09 percent in bad-road provinces for every 1 percent growth in provincial GDP. Related research in poor regions of the PRC shows that for every 1 percent increase in kilometers of roads per capita, household consumption rises by 0.08 percent. Research in India, Philippines, Thailand, and Viet Nam suggests that poverty is substantially lower in irrigated areas compared with unirrigated areas. In the PRC, research implies that a 1 percent increase in irrigation is associated with a 0.41 percent rise in agricultural output per worker, resulting in a 1.13 percent drop in poverty incidence. 6
INFRASTRUCTURE AND DEVELOPING ASIA & THE PACIFIC Investment in People's Republic of China roads is estimated to be almost $20 billion between 2006 and 2010, with a further $7.5 billion required for road maintenance over the same period. The government of India recently projected that it will require over the course of the next five years an investment in the infrastructure sector of US$ 500 billion. Developing countries in Asia & the Pacific are seeking knowledge and are looking to public-private partnerships to achieve their goals financing is a challenge. 7
DEVELOPING ASIA & THE PACIFIC AND INFRASTRUCTURE Overall, the growth of infrastructure in Developing Asia lags behind that of its economic growth. The estimates the investment demands for transport, energy, utilities and telecommunications to be approximately US$ 3 TRILLION during the next ten years. The also estimates that at the current growth rate Asia and the Pacific would take: - 45 years to have the current level of road per land area in industrialized countries - 34 years to reach the 2004 level of per capita net electricity generation in industrialized countries - 23 years to achieve 100 percent access to improved water source - 19 years to achieve 100 percent access to improved sanitation - 7 years to match the current telecommunications density seen in industrialized countries Asia and the Pacific will take close to half a century to broadly reach the levels of infrastructure currently enjoyed by industrialized countries. 8
Thank you! 9
North American Representative Office Address: 815 Connecticut Avenue, NW Suite 325 Washington, DC 20006 Tel. + 1 202 728 1500 Fax. + 1 202 728 1505 website: http://www.adb.org/naro/ 10