Of national priority

ASHISH GAJUREL

Many economists have argued the case of road infrastructure and economic growth, and some have cast doubts for several reasons. Transportation is an essential human need. Human survival and societal interaction rely on the ability to move people and goods from one place to another. Efficient and effective mobility systems are essential factors for economic development. Global trade cannot occur without systems to transport people and goods cheaply and efficiently.

Infrastructure development, particularly transport infrastructure, is a prerequisite for economic development. The main mechanism by which changes in transport could have an effect on the economy is by a change in the costs for the movements. Therefore, transport development could be defined as the improvement through intervention - whether by infrastructure investment, more efficient transport management, or otherwise - that successfully produces sustained reductions in transport costs, or equivalent improvement in services delivered.

Nepal’s total road network is comparatively small and the road density is low. Only 43 per cent of the population has access to all-weather roads. More than 60 per cent of the network is concentrated in the lowlands (Terai) areas of the country. As of 2007, the network of Nepal´s road was 17, 282 km, out of which 38 per cent was black-topped, 25 per cent was graveled and 47 per cent was passable in fair weather.

Transport is necessary for the people for different activities like visiting the doctors, going to work, visiting relatives, etc. Transport is an integral part of most public interventions targeted at meeting the basic needs of the poor (for example, food, education and health care). In the absence of adequate access roads, poor farmers will not produce cash crops for the urban population, may not send their children to school and might not participate in preventive health care.

In emergencies, they may not reach hospitals on time. Without adequate transport, poor people in mostly rural and some urban areas will remain in physical isolation and “trapped” in poverty.

Transportation is a medium for a wide range of productive activities in almost all economic sectors. Without transport, production inputs such as raw materials, fuel and labor from different locations cannot be used properly and products cannot be delivered to markets and consumers. Lower transport cost stimulates trade, makes specialization and economies of scale possible, and helps widen the market, thus promoting economic growth. Therefore, adequate transportation is vital for a basic standard of living as well as trade. Trade, as we know, ultimately affects economic growth.

Efficient transport is fundamental to the efficiency of any economy. The ability to move materials is an integral part of all sectors – supplies for manufacturing plants, animal feed supplies for farms, retail goods, etc. The ability of visitors to get to and from tourist areas and to travel within those areas is also important for the tourism industry. The costs of transport in terms of direct costs and costs caused by delays are important influences on business competitiveness and contribute to investment decisions.

Transportation system, however, does not guarantee economic growth and it is also not sufficient on its own to encourage economic growth, but is a facilitator for a series of factors which determine the location and expansion of economic activity. In this sense, transportation infrastructure is a catalyst for economic growth.

Transport infrastructure can unlock unfulfilled economic potential in an area; it can save transport costs; it can increase the level of accessibility, particularly for those industries where it is of great importance – manufacturing, distribution and tourism; it can change the perceptions of an area, and, where that inhibits growth, it can encourage economic activity.

All modes of transport are important to nurturing

economic prosperity. New and improved roads have an important role in opening up development, but they do not create jobs on their own. Investment in roads needs to be part of a wider strategy to promote economic development at national, regional and local levels.

Equal consideration needs to be given to the potential of rail, sea and air transport to support economic growth. But, without proper roads it is difficult to construct railways or even airports, because the network of roads is basic infrastructure to transport labor and materials.

Therefore, before thinking about developing railways in Nepal, priority has to be given to developing roads. Low-quality (mostly rural) roads have benefit–cost ratios for national GDP that are about four times greater than the benefit–cost ratios for high-quality roads.

This means accessibility is more important than the quality of roads for economic growth. Hence, Nepal should first work on making at least all of its regions accessible by roads. Investment in infrastructure should be a national priority to promote the rapid construction of highways and interstate roads.

Gajurel is M.Sc. in Transportation Systems

gajurelashish@gmail.com