Despite high investments, the report finds that the quality and adequacy of basic infrastructure services—roads, public transport, power grids, water and sanitation systems—is not up to the mark.
A report by the World Bank and the Global Facility for Disaster Reduction and Recovery says developing low-and middle-income countries like India can save $4.2 trillion by increasing investment in infrastructure assets by 3 percentage points. Despite high investments, the report finds that the quality and adequacy of basic infrastructure services—roads, public transport, power grids, water and sanitation systems—is not up to the mark. For instance, even though research from India shows that incidence of diarrhoea in children decreases by 21% in households with access to piped water, low- and middle-income countries incur a minimum financial cost of $3-$6 billion annually, due to waterborne illnesses and the consequent loss of productive work. Add to this interruptions in water supply, and these costs reach a maximum range of $88-153 billion per year.
While infrastructure services in developing nations already tend to be fragile and prone to failure at a systemic level, the economic impact is exacerbated by natural shocks. The research estimates total annual losses due to damage and disruption of infrastructure assets and services in low- and middle-income countries to be in the range of $391-647 billion, the worst effects of which are borne by the vulnerable and marginalised groups, including the rural and urban poor, and women. Further, it asserts that investments directed towards developing climate-resilient infrastructure would allow such countries to earn $4 for every $1 spent. While resilience may be increased in any number of ways—from digging deeper foundations using alternative material and building flood protection to improving road design and building stronger water treatment plants—it is essential that it is included in the structure of regulation and incentives at the design stage itself. The key to unlocking the economic benefits of resilient infrastructure services lies in spending better, not in pumping more money into inefficient designs.