Kilometres of opportunity: How to scale up Asia Pacific transport

COUNTRIES in Asia and the Pacific are economically intertwined through trade and investment, yet the roads, railways, ports, and airports that move people and goods lag far behind what the region needs.

- BY JAMES LEATHER, ALVIN MEJIA, SUDHIR GOTA

About 1.8 billion people—four in every 10 residents—lack reliable transport links. By comparison, 570 million have no electricity, and 680 million people lack access to safe water, but transport remains the bigger brake on growth because it underpins every other service.

The scale of the shortfall is stark. Low income and lower middle income economies in the region have fewer than four kilometres of transport infrastructure for every thousand residents, while higher income economies manage just under 12.

Wealthier countries, such as Members of the Organisation for Economic Cooperation and Development (OECD), enjoy 17 kilometres of transport infrastructure for every thousand residents.

Measured by land area, Asia musters 433 kilometres of infrastructure per thousand square kilometres—well below the OECD’s 690. Limited networks raise shipping costs, lengthen travel times, and squeeze competitiveness.

A single disruption—such as the delay of one million containers—can lift shipping rates by more than $2,000 per box. With so few alternatives, costs climb and supply chains buckle.

Double burden

Landlocked nations and small island states face a double burden: distance and expense. A landlocked economy must haul a typical shipment 1,500 kilometres—twice the regional average—and pays almost twice as much for a standard 40 foot container.

On average, low income countries wait 200 extra hours for goods to arrive and pay hundreds of dollars more per journey than wealthier peers. Inflation follows: the International Monetary Fund finds that when freight prices double, consumer prices rise nearly a full percentage point.