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Transport Infrastructure for MED11 Countries

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  • Robin Carruthers

Abstract

Lack of adequate infrastructure is a significant inhibitor to increased trade of the countries of the Mediterranean region. Bringing their transport infrastructure to standards comparable with countries of a similar per capita GDP will be costly but worthwhile. We compare the current quantities of six types of transport infrastructure with international, and estimate the additional quantities needed to reach the benchmarks. We also estimate the cost of that infrastructure and express it as a percentage of GDP. Finally we make tentative estimates of how much trade might be generated and how this might impact on GDP. All the estimates are made for each MED11 country and for each of four scenarios. The highest need for additional infrastructure will be for airport passenger terminals (between 52% and 56%), whereas the lowest need was for more unpaved roads (between 7% and 13%). The investment (including maintenance) cost would be between 0.9% of GDP and 2.4% of GDP, although the investments in some countries would be between 1.4% and 4.5% of GDP. The impact on non-oil international trade would be substantial, but with differences between imports and exports. The overall trade balance of the MED11 region would be an improvement of between 5.4% and 17.2%, although some countries would continue to have a negative balance. A final assessment was of the benefit ratio between the increase in GDP and the cost of transport investment. This varied between about 3 and 8, an indication of the high return to be expected from increased investment in transport infrastructure.

Suggested Citation

  • Robin Carruthers, 2012. "Transport Infrastructure for MED11 Countries," CASE Network Reports 0108, CASE-Center for Social and Economic Research.
  • Handle: RePEc:sec:cnrepo:0108
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    File URL: http://www.case-research.eu/sites/default/files/publications/CNR_2012_108_0.pdf
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    References listed on IDEAS

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    1. Hurlin, Christophe, 2006. "Network effects of the productivity of infrastructure in developing countries," Policy Research Working Paper Series 3808, The World Bank.
    2. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    3. Coutinho, Leonor, 2012. "Determinants of Growth and Inflation in Southern Mediterranean Countries," CEPS Papers 6736, Centre for European Policy Studies.
    4. Fay, Marianne & Yepes, Tito, 2003. "Investing in infrastructure : what is needed from 2000 to 2010?," Policy Research Working Paper Series 3102, The World Bank.
    5. Wilson,John S. & Mann, Catherine L. & Otsuki, Tsunehiro, 2003. "Trade facilitation and economic development : measuring the impact," Policy Research Working Paper Series 2988, The World Bank.
    6. Leonor Coutinho, 2012. "Determinants of Growth and Inflation in Southern Mediterranean Countries," CASE Network Studies and Analyses 436, CASE-Center for Social and Economic Research.
    7. Canning, David & Bennathan, Esra, 2000. "The social rate of return on infrastructure investments," Policy Research Working Paper Series 2390, The World Bank.
    8. Canning, David, 1999. "Infrastructure's contribution to aggregate output," Policy Research Working Paper Series 2246, The World Bank.
    9. Ahmed Farouk Ghoneim & Javier Lopez Gonzalez & Maximiliano Mendez Parra & Nicolas Peridy, 2011. "Shallow versus Deep Integration between Mediterranean Countries and the EU and within the Mediterranean Region," CASE Network Reports 0096, CASE-Center for Social and Economic Research.
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    Cited by:

    1. Marek Dabrowski & Luc DeWulf, 2013. "Economic Development, Trade and Investment in the Eastern and Southern Mediterranean Region," CASE Network Reports 0111, CASE-Center for Social and Economic Research.

    More about this item

    Keywords

    Infrastructure; Region; Investment; GDP; Trade; Benefit ratio;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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