World Bank says more resilient infrastructure systems, including power, will save $4.2 trillion

The net benefit on average of investing in more resilient infrastructure in low- and middle-income countries would be $4.2 trillion, with $4 in benefit for each $1 invested, according to a report from the World Bank and the Global Facility for Disaster Reduction and Recovery.

The report, Lifelines: The Resilient Infrastructure Opportunity, lays out a framework for understanding infrastructure resilience, or the ability of infrastructure systems to function and meet users’ needs during and after a natural hazard. It examines four essential infrastructure systems:

  • Power,
  • Water and sanitation,
  • Transport,
  • Telecommunications

Making them more resilient is critical, the report finds, to avoid costly repairs and to minimize the wide-ranging consequences of natural disasters for the livelihoods and well-being of people. Outages or disruptions to power, water, communication and transport affect the productivity of firms and the incomes and jobs they provide, as well as directly impacting people’s quality of life.  

“Resilient infrastructure is not about roads or bridges or powerplants alone. It is about the people, the households and the communities for whom this quality infrastructure is a lifeline to better health, better education and better livelihoods,” said World Bank Group President David Malpass. “Investing in resilient infrastructure is about unlocking economic opportunities for people. This report offers a pathway for countries to follow for a safer, more secure, inclusive and prosperous future for all.”

The report finds that the lack of resilient infrastructure causes more harm than previously understood. Natural disasters, for instance, cause direct damages to power generation and transport infrastructure, costing about $18 billion a year in low- and middle-income countries. But the wider disruptions they trigger is an even bigger problem. Altogether, disruptions caused by natural hazards, as well as poor maintenance and mismanagement of infrastructure, costs households and firms at least $390 billion a year in low- and middle-income countries.

Drawing from case studies, global empirical analyses and modeling exercises, the report also finds major region and country-specific implications of investing in resilient infrastructure. For instance, today Africa and South Asia bear the highest losses from unreliable infrastructure:

  • Tanzanian firms are incurring losses of $668 million a year (or 1.8% of GDP) from power and water outages and transport disruptions, regardless of their origin. Almost half of transport disruptions in the country are also due to floods, and flood-related transport disruptions cost more than $100 million per year.
  • Reliable access to electricity has more favorable effects on income and social outcomes than access alone in Bangladesh, India, and Pakistan: boosting per capita income, study time for girls and women’s participation in the labor force. In India, access to electricity increases women’s employment by 12%. But access is usually unreliable. Where access is reliable — that is, available 24/7 — the increase reaches 31%.
  • East Asia is a hotspot of infrastructure asset vulnerability to natural hazards and climate change: there are four East Asia countries among the top five countries globally in terms of risk to transport assets, and three out of five for the risk to power generation.

The report offers five recommendations to ensure that infrastructure systems and users become more resilient.

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