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East Asia needs infrastructure to boost trade: World Bank

East Asia needs infrastructure to boost trade: World Bank article image

The economically-exposed East Asian countries need to improve their port infrastructure to boost trade, according to a paper issued by World Bank researchers. Kazutomo Abe and John Wilson have authored a World Bank Policy Research Working Paper showing a distinct link between transport costs and the state of infrastructure in East Asia because those emerging economies "have relied to a great extent over the past decade on export-led growth". "Port congestion has significantly increased the transport costs to East Asia from both of the United States and Japan. The analysis suggests that cutting port congestion by 10 percent could cut transport costs in East Asia by up to three percent," they state. The authors estimate that the trade cost reduction of investment in port infrastructure leading to higher consumer welfare would outweigh the cost for physical expansion of the ports in the region.

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