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  • Underutilized potential: The business costs of unreliable infrastructure in developing countries
    https://www.preventionweb.net/go/66733

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Underutilized potential: The business costs of unreliable infrastructure in developing countries

Source(s):  Global Facility for Disaster Reduction and Recovery, the (GFDRR)
World Bank, the (WB)

This study constructs a microdata set of about 143,000 firms to estimate the monetary costs of infrastructure disruptions in 137 low- and middle-income countries, representing 78 percent of the world population and 80 percent of the GDP of low- and middle-income countries. Specifically, this study assesses the impact of transport, electricity, and water disruptions on the capacity utilization rates of firms. The estimates suggest that utilization losses amount to $151 billion a year -- of which $107 billion are due to transport disruptions, $38 billion due to blackouts, and $6 billion due to dryouts.

Moreover, this study shows that electricity outages are causing sales losses equivalent to $82 billion a year. Firms are also incurring the costs of self-generated electricity, estimated to amount to $64 billion a year (including annualized capital expenditure). At almost $300 billion a year, these figures highlight the substantial drag that unreliable infrastructure imposes on firms in developing countries. Yet, these figures are likely to be under-estimates as neither all countries nor all types of impacts are covered. 



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  • Underutilized potential: The business costs of unreliable infrastructure in developing countries
  • Publication date 2019
  • Author(s) Erik, Jun et al.
  • Number of pages 34 p.

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