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In 1995 only three people in 1. which implies annual spending of about $390bn or 8. 2006 117 . This is quite a challenge: the aggregate gap between the BRICs and the G6 in electricity. we have also estimated what is needed to bring infrastructure up to current G6 levels. followed by electricity (28%) and mobile phones (27%). Access to ‘improved’ sources of water and sanitation. electricity generation capacity and roads in the BRICs over the next five years.Building the BRICs: Infrastructure Opportunities BUILDING THE BRICS: INFRASTRUCTURE OPPORTUNITIES Infrastructure is a key part of our BRICs story: it is vital to growth and plays an important role in reducing income inequality. As globalisation deepens. with the rest for maintenance. has risen in India and China since 1990. We show a snapshot of current infrastructure stocks in the BRICs and highlight a related piece that estimates infrastructure spending over the next five years. The charts overleaf provide a snapshot of the current state of infrastructure in the BRICs. Spending on mainline phones is likely to account for just 6% of the total.5% of today’s GDP. by 2004 more than 250 did. The roles are reversed in roads: India’s network is comparable to those seen in the G6 (in quantity if not in quality). although India’s gains have outpaced the rate of urbanisation. Sandra Lawson. Our ‘BRICs dream’ envisions a world in which savings. sensible policies and strong institutions to yield impressive real GDP growth for Brazil. Infrastructure is a key part of this story. with Russia using about 70% of the G6 average and agricultural India consuming only 10% of Russia’s level. or more than twice the BRICs’ current GDP. ■ ■ We have used our long-term GDP growth projections to estimate the aggregate demand for mainline and mobile phones. India and China. Russia has jumped from fewer than one per 1. On our projections. highlighting the extent to which mobiles have eclipsed mainlines (a story that is true around the world). roads will account for the largest share of investment in the BRICs (40%). Our estimates point to aggregate investment of nearly $2trn.000 to levels approaching those in the G6. David Heacock and Anna Stupnytska June 14. This process of ‘catching up’ could take about 25 years. Russia. It is vital to economic growth and plays an important role in reducing income inequality. ■ Mobile telephony has experienced explosive growth over the past decade. which can have an important impact on productivity. With our longer-term BRICs dream in mind. infrastructure will arguably become even more important for countries seeking a role in the ‘just-in-time’ global economy. telecoms and rails is a staggering $10trn.000 had mobile phones in China. About 60% of this would support new investment. Urbanisation has been a major driver of this progress. Electricity consumption is widely divergent. while the lack of roads in vast Siberia means Russia has a much smaller network. population growth and productivity gains interact with good governance.
000 7.000 people . The number of Russian mobile telephones per capita now stands at roughly 61% of the G6 average. lagging the developed world by roughly five years. which now outstrip mainlines worldwide. the BRICs’ average mobiles per capita surpassed the world average for the first time. But mainlines have been eclipsed by the phenomenal growth in mobile phones. versus 35% on average for the BRICs.000 8. .000 3. . .000 0 Brazil Source: World Bank Electricity Consumption Shows Wide Divergence ■ Average BRICs electricity consumption is three times lower than that of the G6 and is roughly equal to the world average level. In 2004. The prevalence of mobile telephones in the BRICs has grown exponentially since 2000. Russia is the outlier on the high end. compared with 6% growth in the G6 and 57% growth worldwide between 1995 and 2004. ■ China India Rus s ia BRICs G6 118 . as well as in each of the BRICs. Especially by Mobile ■ 1000 900 800 700 600 500 400 300 200 100 0 95 96 97 98 99 00 01 02 03 04 05 Source: World Bank Brazil Russia India China BRICs Average G6 Average W orld ■ kWh per capita Per Capita Ele ctricity Consumption Group Average W orld LIC 9. .000 2. with the number of mainline telephones per capita increasing over 157%. Per capita consumption in India is just 6% of the G6 level and only slightly above the average of low-income countries globally. ■ 900 800 700 600 500 400 300 200 100 0 Brazil Rus s ia India China BRICs G6 Source: World Bank Both mainline and mobile telephone penetration in the BRICs have seen a sharp increase in the last 10 years. Russia has seen the most rapid increase. India is the clear laggard in both mainlines and mobiles per capita. Per capita consumption in the other BRIC countries is much lower. with the number of mobiles per capita more than quadrupling between 2002 and 2004.000 4. it consumes as much electric power per capita as Italy and about 70% of the G6 average. despite its growing international role as an outsourcing centre. ■ Subscribers per Explosive Grow th In Mobile Phone s 1.000 people Mobile s Outpa ce Ma inline s Mainlines Mobiles W orld Mainlines Average W orld Mobiles Average Calling the BRICs .Building the BRICs: Infrastructure Opportunities Lines per 1.000 5.000 1.000 6.
probably helped by its higher population density. This is one sector in which India trumps the other BRICs: its road density is nearly 70% of the G6 average and 18 times the world average. Russia is the only BRIC country with road density below the world average. This suggests that further growth and development is needed to close the service gap between urban and rural populations. versus 27% and 26% for China and India. Both Brazil and Russia began with higher levels of urbanisation in 1990. Source: World Bank Water Access Urbanisation .000 800 600 400 200 0 Brazil Source: World Bank India Leads the Way in BRICs Road Networks Road networks across the BRICs are much less developed than in the G6. In contrast. compared with just 30% in India and 44% in China in 2002. As the urbanisation gap has closed. as 75% of the population in Brazil and 87% in Russia have access to sanitation facilities. . However. so too has access to safe water: progress in India and China pushed the share of the BRICs population with access to improved water sources from 79% to 87% between 1990 and 2002. 119 BRICs Average . While Sanitation Has Further To Go Access to ‘improved’ sanitation facilities is also closely tied to the level of urbanisation. % Population Access to Improved Sanitation Facilities 100 90 80 70 60 50 40 30 20 Brazil Russia India China Note: Russia data is f or 2003.km Road Netw ork Group Average World HIC 1. . Increasing With 1990 2002 ‘Improved’ water access in the BRICs is closely tied to urbanisation levels.000 sq.800 1. . India’s gains have outstripped its pace of urbanisation growth.200 1. . Source: World Bank .Building the BRICs: Infrastructure Opportunities Km per 1.400 1. Russia India China BRICs G6 % Population Access to Improved W ater Source 1990 2002 100 95 90 85 80 75 70 65 60 Brazil Rus s ia India China Note: Russia data is f or 2003. there is a striking contrast within the BRICs.600 1. with 75% and 73% of the population living in urban areas. BRICs Average China and India accounted for most of the 11% growth in the BRICs average access to improved sanitation facilities between 1990 and 2002. compared with water access. Brazil and Russia posted only marginal improvement. with road density on average only one-quarter the G6 level. due to the extremely limited network in Siberia.
and despite a mild recovery in 2004. accounting for over 45% of total private inward investment to the BRICs over the past 15 years. China tops the list. ■ ol Source: World Bank Private Participation in Inf rastructure Database % Total World Ar C M Th Tota l Inve stment in Infra structure Total Inves tm ent in Infras tructure Projects with Private Participation by 10 9 8 7 6 5 4 3 2 1 0 China Diverging Stories in Telecoms and Water Investment ■ Energy Telcom Transport W ater and sewage Telecoms has been the most successful sector in attracting private investment. they remain only half the peak in 1998. China is ranked third (behind Argentina) and India fifth (behind Mexico). 1990-2004 450 400 350 300 250 200 150 100 50 0 ia le a si a ic o bi a ay si a in az a In d om Ch us ex Br nt C R ge M al ail an in hi d il China Leading by Infrastructure Projects ■ Number of All four BRICs are among the top 10 countries ranked by the number of infrastructure projects with private participation since 1990. Brazil is in the leading position. 1990-2004 Num ber of infras tructure projects with private participation. Improvements in regulatory regimes could significantly boost the potential for private-sector investment in BRICs water and sanitation utilities. In Dollar terms. having received almost 19% of total investment since 1990. Brazil India Russia Source: World Bank Private Participation in Infrastructure Database ■ 120 . accounting for almost 15% of total projects. when Brazil divested the Telebras system. Flows fell significantly after the bursting of the technology bubble. with most going to Brazil and China. Water has received a mere 3% of total BRICs investment.Building the BRICs: Infrastructure Opportunities Number of projects Top 10 Countries by Number of Infrastructure Projects. followed by Brazil with 9% and Russia with 6%. however.
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