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September 23, 2005

World: Emphasis On Infrastructure Could Boost CIS States

by Robert McMahon

Construction workers in Tajikistan (file photo)

The World Bank annual meetings this week are reviving focus on infrastructure development as a way of lifting countries out of poverty. The new emphasis has special importance for the poorest of the Soviet successor states, which inherited major infrastructure stocks but have been unable to maintain them. This has contributed to a decline in living standards in states from Moldova to Tajikistan.
Washington, 23 September 2005 (RFE/RL) -- Distinct from other regions in transition, the former communist states of the Soviet bloc do not lack roads, sanitation systems, or electrical networks.

But the World Bank says the quality of this infrastructure is substandard and declining in the poorest countries of the region, particularly in Central Asia and the Caucasus.

Peter Thomson is a top World Bank expert on infrastructure and energy for the Europe and Central Asia region. He told RFE/RL that many former Soviet states are still struggling economically, making it difficult to maintain or adapt the infrastructure they inherited.

Deteriorating Infrastructures

“There has been quite extensive deterioration in the quality of the infrastructure so what we now face is not an access problem but a real quality problem," Thomson said. "We have issues where clean water supplies are limited, where electricity is supplied only on a sporadic basis and the risks of a collapse in major utility services are becoming an increasing concern.”

A World Bank report issued this week noted that Georgia, for example, averages more than 60 days of electrical outages per year due to a crumbling electricity grid. Another recent World Bank report found a sharp deterioration in water quality in Moldova and Kazakhstan.

World Bank spending globally on infrastructure declined through the 1990s, when private business was expected to take the lead in projects such as transport and energy.

Private Sector Failed To Step Up

But that investment never reached expected levels. The bank report issued this week calls for increasing funding for projects in developing countries by $1 billion per year over the next several years.

Compared to other developing regions, former Soviet states have generally high access to infrastructure services. But Thomson says this creates unique problems for some of the poorest countries in the region, such as Tajikistan.

Tajikistan, he says, clearly has a much less functional infrastructure network than it had back in 1990 and much fewer means to repair it.


“Normally what you have in the case of Tajikistan here, with a country with GDP per capita in the sort of $200 range, you’re talking about a country you would expect to have very similar to that of various parts of Africa but it has a much, much more extensive network than that," Thomson said.

Thomson says countries such as Armenia and Azerbaijan have progressed enough to invest in infrastructure improvements. Georgia, he says, still needs major help in its power and road sectors as it emerges from years of deep-rooted corruption and a dysfunctional bureaucracy.



Infrastructure problems impede country efforts to meet the so-called United Nations’ Millennium Development Goals (MDGs) which call for halving poverty and improving areas such as education and water quality by the year 2015.

Arup Banerji, the bank’s human development manager for the Europe and Central Asia region, tells RFE/RL just one infrastructure improvement -- in water supplies -- could make a significant difference in the quality of life in the region.

But despite high levels of access to water systems, he says, there is declining water quality and infrequent availability of water supplies in a number of states.

“This is what really is significantly affecting the welfare of the people in this region and especially in the poorest countries of the region and countries such as Moldova and Tajikistan especially in the region, it doesn’t look like they are going to achieve the environmental MDGs by 2015 just because of quality issues," Banjeri said.

World Bank studies have also noted a decline in another MDG -- universal primary education -- in parts of the former Soviet Union. Azerbaijan, to cite an extreme example, went from an enrollment rate of near 100 percent in 1990 to 80 percent in 2002. Some of this can also be linked to infrastructure, says Banerji, in terms of providing transport for teachers and students as well as adequate teaching materials:

“The whole curriculum in these schools was geared to a totally different system than they are facing in these countries today -- the market economy, the globalized economy," Banerji said. "And I think part of the major challenge to improve quality in schools is therefore first to get the kids there, second once the kids get there, are there people to teach them? And thirdly, if the teachers are there, are they teaching the right thing, do they have the right equipment?”

Infrastructure Lending On The Rise

On the positive side, recent World Bank studies show a steady growth in infrastructure lending over the next few years for the Eastern Europe and Central Asia region. Programs such as the U.S. Millennium Challenge Account, which just announced a $300 million deal to improve roads and an energy pipeline for Georgia, signal the recognition for infrastructure improvements among major donor states.

In addition, the World Bank says, countries like Ukraine and Azerbaijan are showing strong interest in borrowing funds for a wide range of infrastructure activities.

(The World Bank reports can be found at: http://ddp-ext.worldbank.org/ext/MDG/home.do)
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