Infrastructure

A review of investments in 14 developing countries reveals wide disparities in infrastructure availability between rural and urban areas.¹ Average access to electricity in those countries is 46% in rural areas, compared with 89% in cities. In-house water taps are available to only 12% of rural households, compared with 59% of urban households. And only 8% of rural households have telephones, compared with 38% of urban households. The rural-urban disparity is true across all regions, except in the case of electricity in Eastern European and Central Asia.

There are three challenges to providing universal access to rural infrastructure.

• Ensuring that infrastructure will be maintained.

• Ensuring that financing arrangements can be scaled up to universal coverage.

• The third is determining how to ensure the right balance between cost sharing and reaching poor communities.

Rural infrastructure constitutes a substantial and growing component of Bank activities. Currently, over one-fifth of Bank lending in the rural sector is spent on infrastructure. That is substantially higher than the 1994 level of only 3% of total lending. Combined investments in rural transport and in rural water supply and sanitation account for 15% of rural sector projects and 20% of the funds approved for rural activities in FY 1999 and FY 2000. When other infrastructure sectors are considered—e.g., rural energy and rural telecommunications, as well as alternative multi-sector delivery arrangements (including, social funds and rural development funds)—the proportion is likely to be significantly larger—as much as 50 to 70% of total rural funding.