Lack of infrastructure hurting Philippines – ADB

The Asian Development Bank (ADB) said the Philippines was still suffering from lack of infrastructure that held back growth, even as the lender reported that the global crisis could keep millions of Asians poor. In the study “Infrastructure for a Seamless Asia,” the ADB reported that during the 1997 crisis infrastructure programs were among the first to be cut in developing Asian economies, such as Indonesia, the Philippines and, to a lesser extent, the South Korea and Malaysia.

After the 1997 financial crisis, the ADB added, “Indonesia and the Philippines are still suffering from a large infrastructure deficit due to the collapse of investment . . .” The bank explained that that poor infrastructure has kept growth rates below their potential.

For the Philippines, the ADB said that the unmet investment requirements for highways amoun-ted to $135 million, equivalent to 213 kilometers.

These projects include Tugue-garao City Bypass, Santiago City Bypass, San Jose City Bypass, Tiaong Bypass, Candelaria Bypass, Sariaya Bypass, Daraga Diversion Road, Sipocot-Putiao Diversion Road, Palo Bypass, Cebu North Coastral Road, Tagum City Bypass, Panabo City Bypass, Davao City Coastral Road, Koronodal City Bypass, Digos City Bypass, Koro-nodal City Bypass and General Santos City Bypass.

From 2010 to 2020, the country’s indicative investment needs amoun-ted to $413 million.

The report said that Asia needed to invest about $8 trillion in overall national infrastructure, 68 percent for new capacity, and 32 percent for maintaining and replacing existing infrastructure.

The ADB study added that Asia needed to spend about $290 billion on specific regional infrastructure projects in transport and energy that are in the pipeline.

Connecting Asia

The ADB said improving connectivity in the region would bring Asia large welfare gains through increased market access, reduced trade costs, and more efficient energy production and use.

“Countries that trade more, as well as those whose infrastructure needs are particularly urgent, would experience much larger gains. Asia’s leaders cannot afford to ignore such large gains,” the ADB added.

The ADB said the need to upgrade and extend infrastructure networks over 2010 to 2020 assumes greater importance “to mitigate the medium term consequences of the ongoing crisis.”

“As private financing will be much harder to secure, governments should adopt fiscal stimulus packages that accelerate and increase infrastructure investment,” it added.

Stuck in poverty

From Hanoi, meanwhile, the ADB reported that the global economic crisis would keep more than 60 million Asians in poverty this year, also urging a greater focus on social welfare including healthcare.

“This crisis should be seen as an opportunity to take proactive measures that lay the groundwork for inclusive and sustainable development over the long term,” Haruhiko Kuroda, bank’s president, told an international conference in Vietnam’s capital.

Soaring food costs, rising oil prices, and over the past year, the global economic crisis have cost 41 million Chinese workers their jobs, while the number of chronically hungry in South Asia has increased by about 100 million, Kuroda said.

ADB estimates show 60 million people are stuck below the $1.25-a-day poverty line because of the economic downturn.

“These people would have been freed from the shackles of poverty had economic growth continued at pre-crisis levels,” Kuroda told the opening session of the meeting, billed as the first major Asia-Pacific conference on the social impact of the crisis.

The ADB, whose aim is to reduce regional poverty, said Asia’s poor have been especially hard hit partly because social safety nets to cushion the impact of the economic slowdown have been inadequate.

While signs of worldwide economic stabilization are emerging, the longer-term challenge for Asia’s developing economies will be to enhance resilience to external shocks, Kuroda said.

“Practical steps include fostering intra-regional trade, managing financial globalization, maximizing the benefits of labor mobility, and investing more in education, health and social protection,” he added.

The ADB organized the three-day event, along with the Vietnamese and Chinese governments and the secretariat of the Association of Southeast Asian Nations (Asean). –Darwin G. Amojelar and, AFP