EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf

8 What’s the Size of the Challenge
Improving access to and the quality of infrastructure will require considerable
investment. This section estimates the likely levels of investment that would be
required to achieve Millennium Development Goals or other reasonable
infrastructure access objectives. Such calculations are, of course, never precise.
However, they provide a useful indication of the scale of the challenge. We also
compare the targeted levels of future infrastructure investment to recent investment
performance. This provides us with the context for considering how the required
investments may be funded.
The figure below summarizes our key findings by comparing the sum of annual per
capita investments required for water and sanitation, electricity, telecommunications
and roads with the total per capita investment for selected Pacific countries for the
most recent year for which statistics are available 20 .
Figure 8.1: Estimated Annual Investment Requirements for Infrastructure
Sectors compared to Total Investment in 2003
$300
$250
$200
$150
$100
$50
$-
PNG PNG Fiji Fiji Solomon Isl Solomon Isl
Source: International Financial Statistics (IMF)
Water Sanitation Mainlines Cellulars Electricity Total
The scale of the infrastructure challenge varies among the Pacific Island states, but it
is significant everywhere. If total investment levels were to be maintained at their
current levels, a significant re-allocation of resources would be required. Fiji, which
has enjoyed relatively high levels of total investment due to its strong tourism and
manufacturing sectors, would need to devote about 25 percent of those investments
to the infrastructure sectors. At the other extreme, Solomon Islands would need to
allocate almost their entire current investment spending to infrastructure.
To combine improvements in infrastructure access with growth in other sectors of
the economy, all Pacific countries would need to achieve strong increases in their
total levels of investment. This would require mobilization of private savings – both
domestic and international, improved functioning of the financial sectors, and a
change in fiscal priorities.
20 Total investment is Fixed Capital Formation, derived from the International Financial Statistics (IMF).
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