LAHORE – The Asian Development Bank Institute (ADBI) and the Central Asia Regional Economic Cooperation (CAREC) Institute jointly organised a virtual event highlighting key takeaways from the new book titled “Developing Infrastructure in Central Asia: Impacts and Financing Mechanisms.”
“Development of infrastructure through various modes of investments has a clear nexus with economic growth, productive investment, job creation, and poverty reduction. Functional and accessible roads, railways, air transportation, ports, water and sanitation, telecommunications, and energy infrastructure is a key catalyst for economic growth. Annually, the financing gap is estimated at over one trillion USD globally, and bridging that gap through traditional and innovative modes of investment is paramount for attaining the sustainable development goals,” said the CAREC Institute Director Syed Shakeel Shah in his opening statement.
The event’s highlights included discussion about spillover effects and financing of infrastructure development in Pakistan, Kazakhstan, Kyrgyzstan, China, Tajikistan, Azerbaijan, and Georgia.
One of the book chapters estimates the economic impact of improving and modernizing a rapid transit system in Punjab. Using a large sample of household data over the period of 2005–2016, the author provides empirical evidence that improvement and modernization of transport infrastructure in urban areas of Punjab increased household income by more than 14% of the mean income compounded annually. While the opening chapter by the CAREC Institute authors Ghulam Samad and Qaisar Abbas plots the landscape of various infrastructure systems in CAREC region and propose strategies to utilize opportunities and address challenges.
The speakers noted that governments’ resources are currently strained tackling severe impact of COVID-19 on small and medium-sized enterprises, health sector, schools, and vulnerable layers of society. This limits the available finance for infrastructure development. Thus, the role of the private sector in infrastructure investment finance has to be enhanced. In order to entice the private sector to participate, an adequate rate of return from investing in infrastructure has to be secured and risks associated with infrastructure investment need to be minimized.