New World Bank report highlights net benefits of investing in resilient infrastructure

Catherine Benson Wahlén writes on the SDG Knowledge Hub of the International Institute for Sustainable Development (IISD) about a new World Bank report on benefits of resilient infrastructure in low- and middle-income countries.


World Bank Report Illustrates Benefits of Resilient Infrastructure

The World Bank recently released a report that highlights that the net benefits of investing in resilient infrastructure in low- and middle-income countries (LMICs) could be USD 4.2 trillion over the lifetime of new infrastructure. The report calls for infrastructure investors, the private sector, development banks and governments to focus infrastructure investments on resilient infrastructure, arguing that such investments can enable healthcare, education, jobs and prosperity, and transport and contribute to achieving the SDGs.

The report titled, ‘Lifelines: The Resilient Infrastructure Opportunity,’ presents a framework for understanding infrastructure resilience, or the ability of infrastructure systems “to function and meet users’ needs during and after a natural hazard.” The report focuses on four infrastructure systems: power; transport; telecommunications; and water and sanitation. The report illustrates how making these systems more resilient can not only avoid expensive repairs but also minimize the consequences of natural disasters for livelihoods and human well-being. As an illustration, disruptions or outages of power, transport or communications affect productivity of companies and the jobs and income they provide, resulting in an impact on people’s quality of life. Similarly, water outages can result in households being unable to prepare meals and can contribute to the spread of water-borne diseases. In LMICs, such disruptions cost firms and households approximately USD 390 billion annually. In Tanzania, for example, the report finds that firms incur losses of USD 669 million per year, an amount equivalent to 1.8 percent of the country’s gross domestic product (GDP), from power and water outages and transport disruptions, with flood-related transport disruptions costing Tanzania over USD 100 million annually.

The report argues that investments in resilient infrastructure provide a pathway for countries to achieve better health, education and livelihoods. World Bank Group President, David Malpass, elaborated that resilient infrastructure is not just about bridges, power plants and roads but “about unlocking economic opportunities for people” and for countries “to follow a safer, more secure, inclusive and prosperous future for all.” The World Bank’s Senior Director, Climate Change, John Roome, stressed that investing in resilient infrastructure “is not about spending more, but about spending better.”

The report shares cases studies and analyses that demonstrate the benefits of investing in resilient infrastructure. In Bangladesh, India and Pakistan, reliable access to electricity has more positive effects on income and social outcomes than access to electricity alone; reliable access to electricity increases study time for girls, increases women’s participation in the labor force and boosts per capita income. In India, for example, women’s employment increases by 12 percent with access to electricity and grows by 31 percent with reliable access to electricity.

The report makes five recommends to promote resilient infrastructure systems. First, it urges a focus on “getting the basics right,” underscoring the importance of tackling poor governance and management of infrastructure systems. Second, the report recommends building institutions for resilience, including by addressing wider political economy challenges and identifying critical infrastructure assets and systems. Third, the report suggests using regulations and financial incentives to account for the full social cost of infrastructure disruptions and encourage service providers to go beyond mandatory standards. Fourth, the report calls for improved decision making, and argues that access to better data, tools and skills can be “a gamechanger in building resilience.” As an example, it notes that digital elevation models for urban areas are not expensive and can play a critical role in informing infrastructure investments. Finally, the report stresses the importance of the “right kind of financing at the right time.” At the early stages of infrastructure design, small amounts of resources can support regulators while in the aftermath of a disaster, billions of dollars of investments may be needed for repair and recovery. The report concludes that business-as-usual would cost USD 1 trillion more, whereas the net benefit of building more resilient infrastructure in LMICs would be USD 4 in benefit for every USD 1 invested.

The publication is here.

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