With different regions of the world varying in their specific infrastructure needs, all sectors are expected to experience healthy growth in the period 2010-2020 (see Exhibit 2). Globally, the road infrastructure sector is expected to continue leading in investment spend in 2020. However it is expected to have reduced in size relative to its position in 2010, due to investments in faster growing sectors like telecommunications, and electricity and power. At a regional level, it is the electricity and power sector that will see the greatest increase in levels of investment and overtake road infrastructure sector as the largest sector by infrastructure spend in Asia-Pacific by 2020 due to a combination of population growth, increasing urbanization and a growing middle class.
EXHIBIT 3: DIFFERING INFRASTRUCTURE NEEDS ACROSS ASIAN ECONOMIES
MATURE ECONOMIES • Mature markets need to refurbish ageing infrastructure to cater to population growth and economic expansion • Focus is on meeting social needs like education, healthcare and housing as well as improving transport links and addressing energy supply security concerns • Examples: Singapore, japan, Australia |
EMERGING ECONOMIES • Emerging markets need new infrastructure to support increasing urbanization and global trade • Priority is building economic infrastructure to meet transportation and utility needs • Examples: China, India, Indonesia, Thailand |
Source: APRC analysis
At an individual country level, the demand for each type of infrastructure does vary relative to the stage of development of the nation. In the more mature economies (see Exhibit 3), demand has often moved beyond core energy access and transportation concerns into broader social infrastructure needs. Where the demand exists for energy investments this is often driven by a clean energy agenda which has significant financing and regulatory implications. Emerging economies in the region are more likely to be focused on achieving basic energy access targets, given that there are still some 700 million people in the region without access to electricity, or improving transport connectivity.