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Bangladesh needs $100b in 10 years for infrastructure: WB

Star Business Report
Bangladesh will have to spend $7.4 billion to $10 billion a year until 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 yesterday.
"In total, the country will require between $74 billion and $100 billion between 2011 and 2020 or 7.38 percent to 10.02 percent of its gross domestic product to improve infrastructure," said Luis Andres, one of the co-authors of the report.
Andres was talking to reporters of Bangladesh, Nepal and Pakistan from the bank's headquarters in Washington
via a video conference yesterday.
The report - Reducing Poverty by Closing South Asia's Infrastructure Gap - is the first analysis of the region's infrastructure needs by the WB.
The lender shared the report with the media at the Dhaka office of International Finance Corporation, the WB's private sector financing arm.
The report said Saarc, the eightnation bloc, needs to spend as much as $2.5 trillion on infrastructure by 2020 to bring the region's infrastructure to a standard level.
It says the region, which includes Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka, could address its enor-
mous infrastructure needs by tapping private and public sector funds as well as by introducing reforms.
Andres said: "Despite recent rapid growth and poverty reduction, the South Asia region continues to suffer from a combination of insufficient economic growth, slow urbanisation, and huge infrastructure gaps that together could jeopardise future progress."
"It is essential to make closing its huge infrastructure gap a priority," said the lead economist for sustainable development for the South Asia region at the bank. Bangladesh will have to give the highest priority to its transport sector, as the report said the country needs to spend between $36 billion and $45 billion for expanding its communication network.
The power sector will require an investment between $11 billion and $16.5 billion to take credible electricity to the poor in the country where about half of the population is still not connected to the national grid.
Improving water supply and sanitation will need a flow of investment of $ 12 billion to $18 billion, solid waste management $2.1 billion to $4.2 billion, telecom $5 billion, and irrigation $7.7 billion to $11.6 billion until 2020.
According to the report, Bangladesh ranked sixth among eight countries in the region in providing telecom access to its population in 2011. It came seventh in both electricity access criteria and access to improved water.
The country, however, fared well when it comes to access to improved sanitation, as it was placed third.
The country has 0.1 kilometre of road per 1,000 people, which is the lowest in the region. Only 10 percent roads in the country are paved, which, again, is the lowest in the region.
"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, in a statement.
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 of closing its huge infrastructure gap, said the report.
The report said 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.
During the video-conferencing, Dan Biller, another report co-author, said the South Asia and East Asia regions have enjoyed similar growth rates for the past 20 years.
"Yet South Asia's access to infrastructure services lags significantly behind both East Asia and Latin America with some access
rates comparable only to Sub-Saharan Africa," said Biller, also sector manager of the economics and sustainability group of the Multilateral Investment Guarantee Agency, an arm of the WB.
According to the report, South Asian policymakers 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 longterm.
The report said governments could establish solid and transparent legal, policy and regulatory frameworks in order to attract private investment in line with the best organisational form for each service. They could also decentralise service provision in an appropriate manner.
Le Houerou, who is now in Dhaka, emphasised the bank's strong support for the people of Bangladesh and said he is optimistic about the country's prospects for ending poverty and achieving shared prosperity.
"Against the odds, Bangladesh has achieved sustainable growth that pulled 16 million people out of poverty in the last decade," he said.
"The World Bank remains committed to working with this dynamic and resilient country to reduce poverty and bring prosperity to all Bangladeshis, especially the poor."
While meeting with Prime Minister Sheikh Hasina to discuss the country's main development priorities, Le Houerou commended the impressive progress Bangladesh has made in poverty reduction, human development, and economic growth.
He said, to achieve the status of a middle income country, Bangladesh needs to do more to narrow the power and transportation gaps, manage urbanisation, reduce climate change impacts and improve the ease of doing business environment and public service delivery.
"The World Bank will work harder here to address infrastructure bottlenecks, especially in the power and transport sectors," Le Houerou said.