World Bank Report: Turmoil at Twenty

For those who don’t have time to slog through 276 pages of World Bank Reports, here are the main points from the introduction of the report:

> The nature of the transitional economy made the impacts of the current financial crisis more severe due to not as strong financial policy and banking oversight. Avoiding a humanitarian crisis is critical.

>Utility infrastructure is important, but only if it’s going to be open to private enterprise and make revenues to attract foreign investment.

>The high growth (up to 7%) in the last decade has created capacity constraints in terms of an educated work force and infrastructure.

>The economy will recover and development will surpass where it was in about 20 years.

While the World Bank is talking mostly about electricity infrastructure the reality is that electricity is only good if you have other public goods as well. Water, electricity, telecommunication, and transportation infrastructure are all important to development. The reason electricity is coming up (and sometimes natural gas) is because there is a potential for foreign direct investment and a potential for profit. It’s probably a good time for a large utility company to come in and buy the land or surface easements for their future power lines. But it’s harder to plan for utilities when you don’t have enough transportation infrastructure to facilitate centralized development along the corridors.