Growing pains

PUBLISHED : Tuesday, 06 August, 1996, 12:00am
UPDATED : Tuesday, 06 August, 1996, 12:00am

No wonder Malaysian Prime Minister Dr Mahathir Mohamad was shaking with rage. An 18-hour power blackout was deeply embarrassing for a nation which repeatedly proclaims its intention of joining the ranks of First World countries by 2020. Worse still, it cast a shadow over the unveiling two days earlier of a multi-media super corridor, which is supposed to attract multinational corporations to relocate to Kuala Lumpur.

But Dr Mahathir need not feel alone in his embarrassment. Across Asia such problems have become commonplace, as the region's infrastructure struggles to keep pace with rapid growth rates. The Philippines, Vietnam, and most parts of China have all experienced similar power cuts, sometimes on an almost nightly basis, as increasing prosperity brings a surge in demand that their antiquated generators are unable to cope with.

Nor are such problems confined to inadequate power supply. From Bangkok to Beijing, the gridlock in Asian capitals has become almost legendary. Outside the major cities, the situation can be even worse. The majority of roads in many countries are still unpaved, and rail systems poor. In China, this means it costs more to move a container from Guangdong to Hong Kong, than to ship it on to north America.

Other problems include lack of sanitation. Cities such as Jakarta have no public sewerage systems, while even Hong Kong still dumps much of its waste in the harbour.

Private sector vital To solve such problems, the World Bank estimates East Asia will have to spend US$1.5 trillion on improving its infrastructure over the next decade, half of it in China.

Since no government can afford such huge sums, much of it will have to come from the private sector. But many countries are doing very little to encourage such investments. One of the worst examples is in Bangkok, where political wrangling has repeatedly stalled the plans of Gordon Wu Ying-sheung to ease the gridlock by building a mass transit system. In China, where Mr Wu pioneered outside investment in power generators, the Beijing government has subsequently cut the permitted rate of return on such projects so low as to make them economically unviable.

Shining examples But there have also been some shining examples. Only a few years ago, some parts of the Philippines used to suffer power shortages for up to eight hours a day. Now a crash programme to increase generating capacity has reduced the blackouts to five minutes a month, and brought in so much investment that 80 per cent of power production is expected to be handled by the private sector by 1998.

In China, despite the difficulties, the situation is slowly improving. The completion of Daya Bay has greatly eased the power shortage in southern Guangdong. The signing of massive contracts for highway and other infrastructure projects, during the just-concluded trade fair, shows foreign investors can still be attracted for such projects.

Some of the region's most successful economies, such as Hong Kong and Singapore, have established their reputation by providing an efficient infrastructure. Malaysia has also made great strides in this direction, building a north-south highway to improve links with Singapore, and a new international airport outside Kuala Lumpur. Hence Dr Mahathir's fury at the power cut that undermined the positive impression conveyed by those projects.

It would have been a cause for concern had he not been so angry. So long as Asia has leaders like Dr Mahathir, who recognise that improving infrastructure is a matter of actions rather than rhetoric, then the region should continue its slow progress towards reducing gridlock and blackouts.