Which Country Has the Best... Infrastructure?
Infrastructure is perhaps the most important influence on a country’s productivity. Poor infrastructure holds back countries while modern, futuristic infrastructure accelerates economic activity
This four part mini-series looks at four aspects of government spending and examines which country leads in each of these sectors. By looking a world renowned systems, however, we can learn how to improve our systems.
According to the WEF, Hong Kong has the best infrastructure in the world. Since becoming independent in 1997, it has developed into one of the richest and most developed regions in the world. The government had led this development; a top-down impetus must come for infrastructure to be rapid and for the fortunes of a country to be transformed. Hong-Kong’s infrastructure has even made news recently because they have built the world’s longest bridge over water. The Hong Kong-Zhuhai- Macau bridge makes the city accessible from mainland China in 30 minutes. Altogether it has 1,138 miles of developed roads, all paved.
To understand the infrastructure system in Hong-Kong it is important to understand the culture there. There is a strong culture of public transport use which means 90% of daily journeys are made on public transport (the highest in the world). This means it is one of the most efficient systems in the world; there is a 99.9% reliability and fares are less than $1. For anybody in London or New York this seems to be the dream system.
Other infrastructure includes a world class airport which has the third largest terminal in the world. Unusually, they also have an extensive system of zero-fare escalators and moving pavements. Hong Kong is not just building new infrastructure, they are also innovating it. While we think of infrastructure as large physical projects, in the 21st century digital infrastructure is just as important. Hong Kong is a world leader in broadband and fibre-optic broadband due to successful investment.
Singapore has a very similar system to Hong Kong being a city state and having heavy government intervention in their infrastructure. Like Hong-Kong they have very efficient and cheap transport and highly developed communications. This has been built out of necessity because cars are very highly taxed so public transport is the norm. Importantly Singapore has adopted a very long-term vision and they are making plans for 40 years in the future. That is partly the cause of their rapid transformation from a destitute country 50 years ago. Looking into the future they are pursuing projects such as using drones as helicopters.
Although government policy has been successful, much of Singapore’s growth has come from their location. They have one of the most important commercial sea ports which is the second largest in the world. Trade is vital for Singapore given they have few natural resources and land is scarce. In fact it is the scarcity of land which has made having a good infrastructure system necessary. Part of this involves a underground system of roads, railways and even pedestrian paths. Finally, telecommunications are under state control and are as highly developed as any other infrastructure.
Outside of South East Asia, the Netherlands has the best infrastructure and consequently its labour productivity is one of the highest in Europe. Like Singapore, they are a significant sea port; it is the main entry point for goods imported to the European continent. Rotterdam has the world’s largest seaport outside East Asia and the largest in Europe. The government has prioritised infrastructure by establishing a special infrastructure fund to reduce the impact on the national budget. They have also pledged $35bn for upcoming projects including a high-speed rail link between Amsterdam and Brussels.
Their road system is one of the densest in Europe, just after Belgium, thanks to their determination to reduce congestion in areas such as Amsterdam and Rotterdam. However, congestion still remains a big problem. Despite this they are not scared to innovate and are running projects such as a solar powered bicycle path. They also have an advanced communications system and were one of the first European countries to introduce 3G.
Overall, Hong Kong has the world’s best infrastructure because of its highly efficient transport system and investment in grand projects. But one thing that is certain is that compared to this country the old powers such as the UK and the US are woefully behind. In the future, if we don’t make similar changes, we will be completely outstripped by these countries. There a few key characteristics of successful infrastructure; heavy state investment, continuous innovation and a long-term vision. If policy makers in other countries are more ambitious they can replicate this system and become just as developed.
Thank you for reading. Please subscribe at the top of this page for updates on new posts and to support this blog.
I have also just joined twitter; you can follow me at www.twitter.com/TheEconomicsEx1