Infrastructure

The development and maintenance of essential public infrastructure is an important ingredient for sustained economic growth and poverty reduction.

Poor infrastructure is perhaps the most binding constraint to growth throughout the Asia-Pacific region.

In Asia, rapid population growth and urbanisation threaten to exacerbate infrastructure bottlenecks. In the Pacific, emphasis is needed on equitable access to social infrastructure in remote, rural environments where 80 per cent of the population live mostly without electricity and roads.

Infrastructure investment can lift economic growth and support social objectives.

Health, education, and efficient water and sanitation services help lay the groundwork for a more productive, healthy population capable of contributing to sustained economic growth. Likewise transport infrastructure improves access to services and markets in rural areas.

Policy framework

Australian support for infrastructure development focuses on:

Improving poor people's access to essential infrastructure services such as water supply and sanitation, transportation and energy
Assisting the creation of enabling environments for both private and public financing and management of infrastructure
Supporting human resources development, institutional strengthening and capacity building in the infrastructure sector.

Australia currently supports infrastructure-related programs. Under the Australia Indonesia Partnership for Reconstruction and Development (AIPRD), Australia is supporting a major national roads program, junior secondary school building construction and rural infrastructure.

In addition to supporting the maintenance of economic roads, including the Highlands Highway, AusAID is helping Papua New Guinea improve its processes for the planning and delivery of transport infrastructure.

In the Greater Mekong, Australia is looking to support infrastructure programs that promote regional integration.

Infrastructure for Growth Initiative

Australia will continue to help its regional partners address their infrastructure needs through a major Infrastructure for Growth Initiative. To maximise impact and leverage, the initiative will include a partnership with the World Bank and Asia Development Bank, and seek to operate alongside or as part of multilateral-financed interventions in the Asia-Pacific region.

The overall objective of the Infrastructure for Growth Initiative is to support increased economic growth in Asia and the Pacific. The infrastructure challenges faced by countries in the region require more funding and better policies. The initiative will help address both requirements by helping partner governments:

Improve their infrastructure policies by providing Australian and international expertise in areas such as public-private partnerships; regulatory reform; improved governance and anti-corruption; management and maintenance regimes; regional integration; and environmental and gender impacts
Finance high-priority infrastructure projects through the multilateral development banks and, in some cases, bilaterally for projects that have strong economic and social benefits and where national government, private and development bank finance is not available.

Typical projects will include rural electrification, rural roads, schools and health buildings, and the extension of water distribution systems to smaller towns and rural areas. Australian financing will be made conditional on priorities such as anti-corruption being advanced. Support will promote environmentally friendly infrastructure, such as clean energy, and mitigate the possible adverse health impacts of better infrastructure (for example, HIV/AIDS transmission).

October 2008