Why is infrastructure good

According to Remembering Singapore, nearly 2, cars utilize these expressways each hour. Cambodia, on the other hand, is almost times the size of Singapore. Lack of roadway development poses a significant issue for Cambodians looking for work.

Furthermore, a lack of efficient roadways costs Cambodians much more time getting to and from work. Unlike Singapore, Cambodia does not offer technologically advanced mass transit systems, thus presenting another issue hindering Cambodian lifestyles. In particular, policies were put in place in to invest in Cambodian infrastructure.

These improvements will be dispersed over different projects. One significant improvement is the Phnom Penh-Sihanoukville Expressway , set to open in Why even China and South Korea have raced ahead of India and other Asian countries in the recent times?

Or for that matter, why is India lagging behind many countries in terms of economic growth and poverty? There are many reasons and answers to these questions and one of them is the fact that all these nations have very good physical infrastructure.

Indeed, the fact that they have better roads, ports, highways, airports, and other elements of infrastructure is one of the reasons why they have clocked faster economic growth.

The answer is that once goods are produced, they need to be transported to the ports and airports for transportation to other states and countries. This means that excellent roads are needed to transport the goods or otherwise, they would be delayed leading to economic and reputational losses. Indeed, if a manufacturer produces goods quickly but is unable to transport them to the destination as fast as they can, then there is no point in making the goods in an efficient manner in the first place.

In reality, each infrastructure sector involves fundamentally different design frameworks and market attributes. And they are owned, regulated, governed and operated by different public and private entities.

The federal role should not be exaggerated. American infrastructure in selected, built, maintained, operates and paid for in a diverse and fragmentary fashion. For other sectors, such as freight rail, telecommunications, and clean energy, the federal role is more limited.

Roads, bridges and transit must be paid for largely from public funds. Ballot measures have been important for fund raising, particularly at the local level, because general obligation bonds require popular approval. Many cities are following this trend. Metropolitan transportation initiatives are popular among voters.

According to the Center for Transportation Excellence, 71 percent of measures were passed in as were 73 percent in While state level ballot measures on infrastructure spending are far less common, in , eight states voted to raise taxes for such projects.

This includes both conservative strongholds such as Wyoming and Democrat-controlled legislatures in states such as Maryland. A number of cities are using market mechanisms that capture the increased value in land that accrues from infrastructure. This provides a more targeted way to finance new or existing transportation projects by matching the benefit from infrastructure with its cost.

These techniques include impact fees where land developers are assessed a charge to support associated public infrastructure improvements, generally local roads and public works like sidewalks.

The lease or sale of air rights is another practice that has been used by to finance development around transit stations for decades, famously around Grand Central Station in New York, and more recently in Boston and Dallas. Another growing trend is the use of tax increment financing districts.

These TIFs support infrastructure projects by borrowing against the future stream of additional tax revenue the project is expected to generate. For its part, the federal government can allow greater flexibility for states and cities to innovate on projects that connect metros.

Busy airports could be freed to meet congestion and investment costs by removing the caps. Archaic restrictions on interstate highways tolls could also be lifted. Metropolitan and local leaders, with the states, are in the best position to determine which segments of road could best raise revenue.

Other infrastructures could be public-private partnerships. These often complex agreements allow the public sector to bring in private enterprises to take an active role during the life of the infrastructure asset. At their heart, these partnerships share risk and costs of design, construction, maintenance, financing and operations. The public-sector interest in partnerships is propelled by the shortage of money. Ever since the recession, many states and local governments have been plagued by high debt, low credit ratings and limited options to borrow.

Partnerships with the private sector are not appropriate for all infrastructure sectors or projects. Some may not be profitable enough to attract investors.

In addition, as electricity input prices coal, natural gas, and other petroleum products have soared recently, projects to extend the electricity grids into rural areas have come to a halt.

Poorly maintained or nonexistent roads also inhibit access to health care services and medicines in the developing world. In South Asia, more than a third of the rural population lives more than a mile from all-season roads. According to the World Bank, in South Africa the poorest fifth of the population has to travel an average of nearly two hours to obtain medical attention, compared with 34 minutes for the wealthiest fifth of the population.

Inadequate transportation infrastructure is also a major factor behind what is considered one of the biggest public health crises in the world—road traffic deaths. Globally, road crashes are now the top cause of death for people aged 10 to 24, according to the World Health Organization WHO. Eighty-five percent of traffic casualties occur in developing countries, where transportation infrastructure is poorly maintained or nonexistent. Children, pedestrians, and cyclists in developing countries represent the vast majority of these casualties.

Those with the most to gain from infrastructure development are the poor. Investment in infrastructure is often cited as one of the most effective tools for fighting poverty.

Access to infrastructure is essential for improving economic opportunities and decreasing inequality. For example, adequate transportation networks in developing countries could give the poor better access to schools, hospitals, and centers of commerce, which in turn would improve the education, health, and entrepreneurial opportunities that strengthen a country's economic potential.

Partnering with the private sector In any country, infrastructure development and maintenance is an expensive endeavor. The poorer a country's population, the more difficult it is to foot the bill for infrastructure solely through tax revenues. Some countries are turning to the private sector as a way to finance much-needed infrastructure improvements. Latin America has a long history of private participation in infrastructure. The more advanced economies of Western Europe also engage in many public-private partnerships to maintain and improve infrastructure; see the sidebar.

Although Latin America has made great strides in both the quality and the scope of infrastructure development in the past decade—particularly in water and sanitation, electricity, ports, and airports—much work still needs to be done. During the past two decades, infrastructure development in Latin America has been much slower than in other middle-income regions. On average, Latin American countries invest only about 1.

In the s, because of a combination of fiscal limitations and a changing paradigm for infrastructure development, government expenditures on infrastructure, the source of nearly all investment in the s, dropped drastically in many Latin American countries as financing and management responsibilities were delegated largely to the private sector.

Although the region was able to attract almost half the dollar amount of private participation in infrastructure going to the developing world between and see chart 1 , this private money was not enough to offset the enormous cutbacks in public investment.