Facing up to the true cost of infrastructure provision in Asia

ESTIMATES of the cost of providing the Asia-Pacific region with the power generation systems, transportation and communication networks and other basic infrastructure that it needs to support economic growth just keep getting bigger and bigger.

Up to now, a commonly used benchmark figure has been the US$750 billion a year (or some US$8 trillion in total) that the Asian Development Bank (ADB) suggested in a 2009 flagship report would be needed over the coming decade to meet these needs. Now, in an update to that report, the figure has shot up to US$1.5 trillion a year or US$22.6 trillion between now and 2030. Add in the cost of adapting infrastructure to meet the effects of climate change and the figure jumps again to US$1.7 trillion a year or US$26 trillion in total.

As a percentage of the region's gross domestic product (5.2 in the case of East Asia, 8.8 for South Asia and 7.8 for central Asia) these costs may not sound all that high when compared to other areas of national spending. But the bulk of that spending is done in the private sector and, as the ADB notes, it is the public sector that is expected to shoulder the lion's share of infrastructure spending - 91 per cent in the case of the Asia-Pacific region, with the biggest ratios being in China and East Asia.