South Asia needs to spend as much as 2.5 trillion U.S. dollars on infrastructure by 2020 to bring its power grids, roads and water supplies up to the standard needed to serve its growing population, a World Bank report said Wednesday.
The report, titled "Reducing Poverty by Closing South Asia's Infrastructure Gap," is the first analysis of the region's infrastructure needs by the World Bank. It says the region, which includes Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka, could address its "enormous" infrastructure needs by tapping private and public sector funds as well as by introducing reforms.
"Many people in South Asia remain unconnected to a reliable electricity grid, a safe water supply, sanitary sewerage disposal, and sound roads and transport networks," said Philippe Le Houerou, vice president for the South Asia region at the World Bank.
If the region hopes to meet its development goals and not risk slowing down -- or even halting -- growth, poverty alleviation, and shared prosperity, it is essential to make a priority closing its huge infrastructure gap, said the report.
The task would be difficult but not impossible with a concerted effort by governments in the region, where access to infrastructure compares with Sub-Saharan Africa, it said.
For instance, it further said, in South Asia only 71 percent of the population has access to electricity, ahead of Sub-Saharan Africa at 35 percent, but well behind the rest of the developing world at above 90 percent.
South Asia is the region with the highest incidence of open defecation in the world -- with 680 million people (41 percent of the population) relying on it in 2011, said the report.
In terms of telecom access (measured as fixed and mobile lines per 100 people), South Asia and Sub-Saharan Africa rank at the bottom (72 and 54) with less than half the access found in Europe and Central Asia and Latin America and the Caribbean (157 and 125), it said.
To close the infrastructure gap, South Asia needs to invest between 6.6 percent and 9.9 percent of 2010 GDP a year -- an increase of as much as three percentage points over the current 6. 9 percent invested by the region in 2009, said the report.
It said governments in the region need to ensure that infrastructure access is extended to people who need it the most: women, the poor and marginalized social groups.
According to the report, South Asian policy makers should invest in rehabilitating and maintaining infrastructure assets to deliver services efficiently and sustainably, moving away from the "build, neglect, and rebuild" mindset.
They could reform service providers and ensure financial and operational sustainability so that they can be able to plan and implement sound investment strategies and improve operational performance for the long term, it said.
It further said governments could establish solid and transparent legal, policy and regulatory frameworks in order to attract private investment in line with the best organizational form for each service. They could also decentralize service provision in an appropriate manner.
The World Bank said it has a portfolio of 96 active infrastructure projects in the region, with total commitments of 19.8 billion U.S. dollars.
South Asia needs to make closing its huge infrastructure gap a priority. The gap is not only seen between countries but within countries as well, it said and added women, the poor, and marginalized social groups are particularly affected by the region 's infrastructure gap.