The Impact of Infrastructure in Asia: 12 Things to Know

Article | 22 December 2015

Improving Asia’s infrastructure has a direct impact on increasing commerce and prosperity, according to the Asian Development Bank Institute publication, The Impact of Infrastructure on Trade and Economic Growth in Selected Economies in Asia.

  1. In order to continue to prosper, Asia needs “hard infrastructure,” also called physical infrastructure, including roads, airports, ports, and rail systems, as well as improved telephone and internet services. 
  2. The region also needs “soft infrastructure,” which includes policies and procedures to increase border, customs, and transport efficiency, as well as a trade-friendly business and regulatory environment, and a decrease in corruption.

  3. When a country builds more roads, its economy grows faster. A 10% increase in paved roads increases economic growth more than 5%.

  4. When the amount of reliable landline phones increases, so does trade. A 10% increase in the number of fixed phone subscribers for both exporters and importers can boost trade by 2.6%.

  5. Getting people and businesses online drives the economy. An increase in internet facilities by 10% increases economic growth by 2%.

  6. Helping exporters and importers communicate has a direct impact on trade. A 10% increase in the number of mobile phone subscribers for exporters and importers can boost trade by 2.2%.

  7. Bringing down the cost of electricity revs up the economy. Reducing electric power transmission and distribution losses by 1% increases growth by 1.1%.

  8. Cutting red tape jump-starts trade. A 10% increase in the number of documents needed for export and import reduces trade by at least 5.5%.

  9. More phones means faster economic growth. A 10% increase in the number of telephone lines and mobile phones increases economic growth by more than 1%. 

  10. The amount and quality of a country’s roads - measured in technical terms by road density or the size of the national road network in relationship to a country’s total land area - has a direct impact on trade. A 10% increase in road density increases a country’s trade by 1%.

  11. Decreasing bureaucracy boosts business. A 10% reduction in the time it takes to export increases trade by 5%.

  12. Cutting document processing time for importers increases trade. A 10% reduction in the time it takes to import increases trade by 4%.