CrossBorder Infrastructure A Toolkit Cross Border Infrastructure An
Cross-Border Infrastructure: A Toolkit Cross Border Infrastructure: An Introduction Session on Planning & Policy Rita Nangia Asian Development Bank The views expressed here are those of the presenter and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Directors, or the governments they represent.
Cross-Border Infrastructure: A Toolkit Session Description • The session covers four areas Æ Major attributes of network infrastructure that makes planning and public policy complex; Æ Planning and political economy aspects using case studies of Indonesia, Thailand, Philippines and People’s Republic of China (PRC); Æ Complexity inherent in planning for cross-border infrastructure; and Æ Estimates of infrastructure investments.
Cross-Border Infrastructure: A Toolkit Overview • What do recent trends in Asia’s integration mean for cross-border infrastructure? • Planning for cross-border infrastructure Æ What is so special about infrastructure? Æ Why is it different? Æ What is needed? • Inherent complexities of cross-border infrastructure • Political economy and planning case studies • The Greater Mekong Subregion
Cross-Border Infrastructure: A Toolkit Linkages Between Trade and Infrastructure • Trade - a major driver of economic growth and poverty reduction in Asia • Transport infrastructure affects overall costs and value addition Æ Logistics account for 20% of GDP in PRC compared to 10% in USA Æ It can amount to two thirds of final costs of industrial and food production in PRC, but only 10% in USA • Not only hard infrastructure, but how this is delivered in terms of logistics services
Cross-Border Infrastructure: A Toolkit What Do We Mean by Market Economy? • Prices and quantities are set by market supply & demand Æ Many suppliers and many consumers Æ Competition leads to efficiency • Producers maximize their profits, consumers maximize their surplus • Largely decentralized decisions, flexible, practical and changeable. • Market economy rests upon the fundamental principle of freedom of choice for all economic agents, i. e. , a consumer, producer, or worker - accountability for own choices.
Cross-Border Infrastructure: A Toolkit What Is Different About Infrastructure? • Capital intensive and economies of scale • Flows of services from capital goods • Produces services (ultimately performance of service market impacts on users, not provision of capital alone) • Lumpy not incremental (difficult to match supply and demand) • Long-lasting (implications for finance and maintenance)
Cross-Border Infrastructure: A Toolkit What Is Different About Infrastructure? • Space-specific and use-specific in services provided (high sunk costs) • Infrastructure is political • Source of services for final consumption and as input to enterprise • It is like new technology which lowers costs or promotes market development, (or expansion when new areas are opened) • Finally, it is complicated - its impacts depend on other inputs
Excludable Non-excludable Rival Cross-Border Infrastructure: A Toolkit Private goods Telecommunications Common property Urban Bus Fossil fuel power generation Groundwater Urban Roads Rural Sanitation (on-site disposal) Local power distribution Rail, airport, and port services High-voltage transmission Piped water supply Surface water irrigation Sanitary landfill Urban sewerage Rail, port, and airport facilities Rural roads Street sweeping Traffic signaling Interurban highways (toll roads) Club goods Public goods Non. Rival Lower Higher Externalities Note: Excludable means that a user can be prevented from consuming the good or service. Rival means that consumption by one user reduces the supply available to other users. Source: World Development Report, 1994
Source: UNESCAP Cross-Border Infrastructure: A Toolkit
Cross-Border Infrastructure: A Toolkit Cross-Border Infrastructure in the GMS
Cross-Border Infrastructure: A Toolkit The Greater Mekong Subregion Land area 2. 5 million km 2 Population 316. 8 Million
Cross-Border Infrastructure: A Toolkit The GMS Economic Conditions Myanmar Yunnan & Guangxi, PRC Land area: 677, 000 km 2 Land area: 624, 000 km 2 Population: 55. 4 M Population: 93. 8 M GDP per capita: US$ 176 GDP per capita: US$ 842 Thailand Viet Nam Land area: 513, 000 km 2 Population: 64. 7 M GDP per capita: US$ 2, 727 Cambodia Land area: 332, 000 km 2 Population: 83. 1 M GDP per capita: US$ 622 Lao PDR Land area: 181, 000 km 2 Population: 13. 8 M GDP per capita: US$ 393 Land area: 237, 000 km 2 Population: 6. 0 M GDP per capita: US$ 491 Source: Beyond Borders – Regional Cooperation Strategy & Program Update, 2007 -2009; Asian Development Outlook, 2006; ADB Key Indicators, 2006; FAO/People’s Govt. of Yunnan Province; http: //www. china. org. cn
Cross-Border Infrastructure: A Toolkit GMS Economic Cooperation Program • 1992: Cambodia, Lao PDR, Myanmar, Thailand, Vietnam and Yunnan Province of PRC launched the GMS Economic Cooperation Program with support from ADB. Guangxi Zhuang Autonomous Region of PRC joined in December 2004. • Encourages cross-border trade and investment by easing movement of people and goods across national boundaries. • Pursues a 3 -pronged strategy to achieve their vision of a peaceful, prosperous and more closely integrated subregion Æ Fostering greater Connectivity Æ Enhancing Competitiveness Æ Building a greater sense of Community
Cross-Border Infrastructure: A Toolkit GMS Economic Cooperation Program • Confidence building • Pragmatism and results orientation • Building blocks: Æ Initial Æ Soft focus on infrastructure sectors: health, education, HRD, environment Æ Policy and regulatory frameworks
Cross-Border Infrastructure: A Toolkit Strong Economic Performance. . . GDP growth rates in % Source: Asian Development Outlook 2005 and Key Indicators, 2005
Cross-Border Infrastructure: A Toolkit Openness Is Growing. . . Trade as % of GDP Source: Asian Development Outlook 2005 and Key Indicators, 2005
Cross-Border Infrastructure: A Toolkit A Vibrant Region… • Total exports are up from about Æ $36 billion in 1992 to $130 billion in 2004 • Intraregional trade expansion Æ More than 11 times in past 12 years Æ Tourist Æ FDI arrivals has almost doubled to 18 million has more than doubled Source: Mekong Economic Review, various issues
Cross-Border Infrastructure: A Toolkit The GMS Experience Cross-border economic corridors
Cross-Border Infrastructure: A Toolkit The GMS Experience Infrastructure
Cross-Border Infrastructure: A Toolkit The GMS Experience Infrastructure
Cross-Border Infrastructure: A Toolkit The GMS Experience Infrastructure
Cross-Border Infrastructure: A Toolkit Greater Mekong Subregion Myanmar Yunnan, PRC Hydro: 100, 000 MW Hydro: 150, 000 MW Coal: 200 -230 MT Coal: 23, 580 MT Gas: 160 BCM Gas: 32 BCM Oil: 32 MT Oil: 226 MT Cambodia Viet Nam Hydro: 15, 000 MW Hydro: 30, 000 MW Gas: 42. 5 - 99 BCM Coal: 32, 250 MT Oil: 7 - 14 MT Gas: 144 BCM Oil: 82 MT Thailand Hydro: 12, 700 MW Coal: 2, 400 MT Gas: 943 BCM Oil: 124 MT Lao PDR Hydro: 26, 000 MW Coal: 910 MT Source: GMS Energy Strategy July 2006 Proceedings, work in progress
115 k. V Line 220 k. V Line Cross-Border Infrastructure: A Toolkit Legend: Generation Projects 1 - Jinghong HPP (2013) 2 - Nuozhadu HPP (2014) 3 - Nam Mo HPP (2009) 4 - Sekong 5 HPP (2015) 5 - Sekong 4 HPP (2014) 6 - Sekaman 3 HPP (2009) 7 - Sekaman 1 HPP (2013) 8 - Xeset 2 HPP (2008) 9 - Nam Kong HPP 10 - Xepian- Senamnoy HPP (2012) 11 - Nam Ngum 2, 3 HPP (2011 -2012) 12 - Lower Sre Pok HPP (2018) 13 - Hongsa Lignite TPP (2013) 14 - Mong Duong TPP (2009 -10) 15 - Quang Ninh TPP (2008 -09) 16 - Nghi Son (2010 -2011) 500 k. V Line Hydropower plant (HPP) Thermal plant (TPP) Gas Field Energy Scene 2 1 B 14 B 15 13 16 3 11 F F M M 4 B D 10 8 C 5 9 6 7 C 12 D Legend: Gas Fields C- Offshore Blocks (Cambodia) M- Yadana, Yetagun (Myanmar) T- Malay, Pattani (Thailand) V- Bach Ho, Rong, Dai Hung (Viet Nam) The GMS Experience A T E E E A T C V G G V V Hydropower: 333, 700 mega watts Coal: 59, 340 million tons Gas: 1, 378 billion cubic meters Oil: 478 million tons Source: Regional Power Trade Coordination Committee Proceedings
Cross-Border Infrastructure: A Toolkit Major Cross-Border Projects Power Generation Projects • GMS Power Transmission Project • LAO: Nam Theun 2 HPP (CAM): ongoing ADB funded • CAM: Offshore Gas Resource project (target completion: 2008) Development • GMS Power Transmission Line • CAM: Lower Sre Pok HPP (PRC- Lao PDR-Thailand): • VIE: Mong Duong TPP proposed in place by 2013 • VIE: Quang Ninh TPP • GMS Power Interconnection • VIE: Nghi Son TPP Phase II (Bansok-Pleiku): proposed in place by 2010 • 115 k. V Line (Southern Lao PDR to CAM): • 115 k. V Line (VIE to CAM):
Cross-Border Infrastructure: A Toolkit Key Messages • Investment in cross-border projects and policy planning requires coordination at multiple levels. • Cross-border infrastructure projects are time-consuming and skill-intensive processes. • Retrofitting solutions is expensive.
- Slides: 25