Climate Change

By spending just 3% more on infra, developing nations can save $4.2 trillion: World Bank

Making assets climate resilient can help these countries earn $4 for each $1 spent, according to the report

By Kiran Pandey
Published: Friday 28 June 2019
Underfunding and poor maintenance are some of the key factors resulting in unreliable infrastructure. Photo: Getty Images
Photo: Getty Images Photo: Getty Images

Just 3 per cent more investment in infrastructure assets can save developing countries $4.2 trillion, according to a report jointly published by the World Bank and the Global Facility for Disaster Reduction and Recovery.

Making such assets and services climate resilient will help these countries earn $4 for each $1 spent, the report added.

These low- and middle-income countries suffer an estimated loss of $391-$647 billion due to damage and disruption in infrastructure assets and services in a year, highlighted the report. But despite investing around $1 trillion every year, the quality and adequacy of infrastructure services is not up to the mark, it added.

Spending between $11 billion and $65 billion a year by 2030 can help these countries create reliable infrastructural assets, estimated the report.

Interruptions in water supply are estimated to cost between $88 billion and $153 billion a year to all developing nations. Waterborne diseases stemming from an intermittent water supply lead to medical treatment costs and lost incomes between $3 billion and $6 billion a year, according to the report.

Underfunding and poor maintenance are some of the key factors resulting in unreliable electricity grids, inadequate water and sanitation systems, and overstrained transport networks.

Natural disasters worsen matter

According to the report, natural hazards magnify challenges faced by these already-strained and fragile systems. This resonates with the findings of a World Risk report released three years ago.

Outages caused by natural hazards tend to be longer and geographically larger than other outages. For example, Cyclone Fani had damaged electricity transmission and distribution systems, cutting people’s access to electricity.

Even after 50 days, electricity has not been restored in the most-affected districts of Odisha. A wider damage to electricity supply systems was reported due to 2017 hurricanes in Puerto Rico.

Africa and South Asia bear the highest losses owing to unreliable infrastructure. Power systems are more vulnerable to natural shocks in poorer countries than in richer countries. Storms of the same intensity are more likely to cause outages in Bangladesh than in the United States.

After examining four essential infrastructure systems — power, water and sanitation, transport, and telecommunications — the researchers found that making them more resilient is critical, not only to avoid costly damage, but also to minimise the wide-ranging consequences of natural disasters.

“Resilient infrastructure is not about roads or bridges or power plants. It is about the people, the households and the communities for whom this quality infrastructure is a lifeline to better health, better education and better livelihoods,” said David Malpass, president, World Bank Group.

Not just more, but better

Strengthening the infrastructure to meet the Sustainable Development Goals will require substantial investments in maintenance of existing assets. However, infrastructure management is not just about spending more, but also about spending better, according to the report that suggested targeted actions.

Resilience should be included in the regulations and decision making process through data, tools and skills will be essential to create and maintain the assets, according to the report.

Without geospatial information on locations exposed to natural disasters, strengthening the whole system would cost 10 times more — between $120 billion and $670 billion, added the World Bank study.

Combining infrastructure with nature-based solutions too reduces countries investment needs. “In Philippines, mangroves, reefs and other natural systems prevent more than $1 billion in annual disaster losses,” read the report.

Providing appropriate finances to create risk-informed master plans remains a key challenge in creating disaster-resilient assets, acknowledged the World Bank.

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