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Comments on the
draft chapter on Large-Scale Infrastructure for CPRGS
by Martin Rama,
World Bank
The main strength of the draft chapter
presented at the seminar on the Development of Large-Scale
Infrastructure for Growth and Poverty Reduction lies in its description
of the accomplishments of Vietnam in terms of developing its
infrastructure. The discussion of the mechanisms and channels through
which large-scale infrastructure may impact on growth and poverty
reduction also provides a useful context.
The main weakness of the draft is the
lack of a policy focus. One of the salient characteristics of CPRGS was
to combine statistical evidence with the feedback from consultation to
identify key policy reforms. The draft chapter, on the other hand, is
more focused on listing the most important projects that could be
implemented in each sub-sector over the coming years. The project focus
seems quite restrictive compared to the policy focus of the rest of PRSC.
The presentations and discussions at the
seminar on the Development of Large-Scale Infrastructure for Growth and
Poverty Reduction identified at least nine policy areas which deserve
attention from the perspective of CPRGS:
- Master plans.
They are the backbone for infrastructure development, but their
coordination is problematic at present. A regional perspective,
integrating investments in transport, energy, irrigation, and water
and sanitation, with appropriate land zoning and provision of social
services to accommodate the ensuing economic and social
transformations, would be welcome.
- The role of the
State. Not all the development of infrastructure needs to be
undertaken by the State, or with public funds. Scarce resources
should not be diverted towards investments that could be undertaken
by the private sector. Even when State intervention is warranted, it
might not involve direct funding, but rather rely on guarantees or
regulation (e.g. mandates for universal service).
- Prioritization.
Investment projects of different types might have different impacts
on economic growth and poverty reduction. Guidelines to assess those
impacts, even if only crudely, could be issued. Projects proposed by
ministries and provincial governments would then be classified based
on those guidelines and trade-offs (e.g. lower growth impact but
higher poverty impact) could be made explicit.
- Funding. At
present, infrastructure projects can be financed by the State in a
variety of ways, including resources from ODA, the budget or the
issuance of public debt. Clear criteria to identify the appropriate
funding for projects of different types could be discussed. The
appropriate extent of cost recovery, and the pricing policy for
infrastructure services of different types, deserve consideration
too.
- Safeguards. The
implementation of large-scale infrastructure projects can have
social and environmental implications. A review of current
safeguards policies for resettlement would be welcome. Also, the
introduction of environmental impact assessments for large projects
would be an important step in the direction of environmental
sustainability.
- Implementation.
At present implementation of some projects, especially those funded
through ODA, is slow. It could be useful to review the reasons for
the delays. Decentralized implementation of projects is likely to
become more common. But it raises important coordination issues
between central and provincial governments. Mechanisms to improve
that coordination could be discussed.
- Maintenance. One
of the main weaknesses of the current Public Investment Program is
the disconnect between capital expenditures and recurrent
expenditures. The integration of these two components of State
spending would be a key step towards improved planning. Fully taking
into account the maintenance implications of infrastructure projects
would be an important step in the right direction.
- Services. In some
key areas, the provision of infrastructure services is as important
for efficiency as the physical infrastructure itself. Inefficiencies
in the operation of port services, or bus stations, can be as
damaging as poor facilities. The regulation of competition and
pricing in the provision of infrastructure services might need to be
considered as part of the overall approach to large-scale
infrastructure.
- Information. The
Public Investment Program involves a few hundred very large
projects. It is technically feasible to have a live database of
these projects, allowing the monitoring of their implementation as
well as the empirical evaluation of their impacts at sectoral and
provincial levels. A proper information system could be seen as part
of the broader move towards evidence-based policy making.
The World Bank
Hanoi Office
October 7, 2003
[Agenda]
[Summary in English] [Summary
in Japanese]
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