1. Safe, clean and affordable… Transport for development World Bank and East Asia and Pacific Transport Strategies June 29, 2007

2. 1 Safe, clean and affordable… Transport for development Contents  Transport Sector Strategy Update  The East Asia and Pacific (EAP) Context  EAP Transport Portfolio  EAP Business Lines and Strategic Focus

3. 2 Current Strategy… ‘ Sustainable Transport: priorities for policy reform’ (World Bank, 1996) Objective: To help partner countries to establish the governance, strategies, policies and services that will deliver transport for development in a way that is economically, financially, environmentally and socially sustainable. Objective endures, but the development context has changed.

4. 3 Development Thinking  MDG’s  Country ‘ownership’  Governance  Focus on results  Transport ‘inclusion’ Global Trends  Trade growth  Urbanization  Motorization  Global warming  Transport & Health Bank Actions/ Reviews  Infrastructure Action Plan  Approach to Middle Income Countries  IEG 10-year Evaluation of Transport Sector 2007 Transport Strategy Update Key Drivers of Strategy Update

5. 4 IEG 10-year Review: Recommendations ‘Transport sector activities have been well-managed and effective….’  Ensure focus of operations goes beyond intercity highways and gives attention to air pollution, traffic congestion, safety, affordability, trade;  Prepare WBG transport strategy with a sixfold emphasis:  environmental impact (including pollution and energy efficiency);  greater synergies across sectors;  enhanced knowledge sharing and analysis;  private sector participation;  attention to governance;  redeploying staff/budget resources;  Build up sector’s monitoring and evaluation efforts

6. 5 The Strategic Directions Strategic Direction 1: Increase support for transport investment and governance:  The increase in lending will be matched by greater attention to governance --that is the strategies and policies necessary to meet the objective of sustainable transport  … and informed by enhancing analytic and advisory activities

7. 6 The Strategic Directions Strategic Direction 2: Deepen engagement in the roads and highways sub-sector to meet principles of environmental and social sustainability in four main ways:  Enhance performance, affordability and inclusiveness of freight and passenger road transport services that use road infrastructure;  Make roads safer for all their users, and for those non-users put at risk by them;  Reduce transport-related transmission of HIV/AIDS through major road construction sites and new road corridors;  Take action to bring down the high proportion of transport-related greenhouse gas emissions; Clean Safe Affordable

8. 7 The Strategic Directions Strategic Direction 3: Increase engagement in urban transport sub-sector to make cities more efficient and more livable, especially for the poor  Increasing investment in and efficiency of urban transport in general and public transport in particular  Relying on analytic, advisory services and country dialogue to support:  capacity and institution building in city transport governance  interaction of land-use and transport  mobilization of the private sector to deliver public services  private vehicle traffic/demand management  the needs of pedestrians and other non-motorized transport forms  financing of urban transport

9. 8 The Strategic Directions Strategic Direction 4: Diversify the Bank’s engagement in transport for trade to include non-highway infrastructure:  Increase support for public and private infrastructure to overcome physical or quality transport bottlenecks to trade in goods and services  Promote more diversified lending for investment in non-road transport infrastructure: railways, ports, inland waterways, airports, multi-modal  Support transport and logistics strategies that address non-physical barriers: encourage greater private sector participation  Develop regional transport projects particularly when these can help improve service and cost to landlocked countries, adopting corridor approaches for the diagnosis of needs and design of strategies for major trade routes

10. 9 The Process Adjustments  Process adjustment 1: Increase proportion of transport lending through Program Approaches: Separate sector-wide policy dialogue from loan conditionality  Process adjustment 2: Enhance the quality of policy dialogue and sharing of transport knowledge: Focus AAA on implementing strategy and seek donor funds to support it  Process adjustment 3: Improve monitoring and evaluation  Process adjustment 4: Capture synergies between transport and other World Bank entities and sectors

11. 10 Safe, clean and affordable… Transport for development Contents  Transport Sector Strategy Update  The East Asia and Pacific (EAP) Context  EAP Transport Portfolio  EAP Business Lines and Strategic Focus

12. 11 Transport – Key Economic & Development Context Urbanization Economic Growth and Trade Motorization Private passenger vehicles in China is expected to increase from 10 million in 2004 to 110 million in 2020 EAP’s average GDP growth has been 7% for the past 15 years By 2025, EAP will absorb 500 million new urban residents Fast motorization Rapid urbanization High Economic Trade-Led Growth Unprecedented Demand for Transport Environ- mental and Social Impacts

13. 12 Trade-Led Economic Growth underpinned by high level of investment in transport Investment in Transport Fixed Assets (US$ billion) Exports as Share of GDP % % % However, cost of logistics still very high in EAP: China 20% of GDP, Thailand 19% of GDP (versus 8-10% in developed countries)

14. 13 Rapid urbanization led to urban congestion and intense pressure for infrastructure services Congestion can affect efficiency of urban economies which contribute 80% of the national GDP In Beijing average peak-hour speeds on arterial roads have declined from 45 km/hr in 1994 to about 10 km/hr in 2005 Beijing

15. 14 Fast motorization has left little time for governments to prepare strategically 1990-2003 2004-2020 Annual growth31% Exponential China - Private Passenger Vehicles (millions) 13 million 77 million Source : International Energy Agency, 2005; World Bank Staff Estimates

16. 15 Impact on global environment substantial and increasing Countries’ and Country Groups’ Share in Global GHG Emissions, 2000  Transport, mostly trucks and cars, accounted for 26% of total world energy use in 2004  14% of GHG emission coming from Transport (Stern Review)  CO 2 from Transportation is growing at an unsustainable rate in EAP CO 2 from Transportation

17. 16 Social Externalities Mainly China Transport fatalities forecast to increase by 67% by 2020

18. 17 Need to address a wide range of challenges …  Mitigating global and domestic environmental impact  Addressing negative social externalities such as traffic safety and HIV/AIDS  Managing transport demand growth and increasing efficiency  Promoting access to opportunities by all segments of population while providing for adequate transport network capacity  Sustainable financing through appropriate pricing and users’ charges policies  Facilitating trade and regional integration  Enhancing good governance and participation of private sector (e.g., PPPs) Clean Safe Affordable

19. 18 … within a wide country diversity Logistics Perception Index (LPI) Characteristics of Road Network (2003) Source: GFP LPI Survey 2006 – performance measurement Of key trade logistics processes for 100 countries

20. 19 Safe, clean and affordable… Transport for development Contents  Transport Sector Strategy Update  The East Asia and Pacific (EAP) Context  EAP Transport Portfolio  EAP Business Lines and Strategic Focus

21. 20 EAP Transport Lending (FY95-07)  EAP transport lending among the largest program in the Bank averaged $860 million per year over (FY03-07) Source: *Business warehouse data as of May, 1 2007, includes pipelines and approvals  Transport accounts for a significant share of lending averaged 27% over the last 4 years

22. 21 EAP Transport Lending (by sector) Commitments Total: US$5.6 billion Number of active projects Total: 43 projects

23. 22 EAP Transport Lending (by country) Number of active projects Commitments Total: US$5.6 billion Total: 43 projects

24. 23 Safe, clean and affordable… Transport for development Contents  Transport Sector Strategy Update  The East Asia and Pacific (EAP) Context  EAP Transport Portfolio  EAP Business Lines and Strategic Focus

25. 24 Process adjustments in EAP  Expanded use of program approaches Output-based disbursement and SWAPs (e.g., China) Emphasis on governance: processes & institutions (IN, PH, CAM, Lao)  Enhance policy dialogue/underpinning of operations through analytical activities (AAA) and knowledge sharing instruments (e.g., GDLN) Seek trust fund resources and coordination with other donors  Greater emphasis on M&E at both project and sector levels Systematic use of impact assessments to measure results/inform project decisions More work on assessing performance of transport systems, institutions, logistics, impacts on climate change  Capture synergies through collaboration and cooperation within WBG On transport and climate change (with energy and environment, now all part of the “Sustainable Development” Department) Road safety and HIV/AIDs (with Global Road Safety Facility and Human Development Network) For PPP initiatives with IFC (e.g., LRT in the Phillipines)

26. 25 EAP Diversified Emphasis of Interventions  Fast-growing saving-rich countries (China, Vietnam, Thailand) – Introduce innovation and best practice in planning, design and management in highways, railways, inland waterways, ports, and urban transport –Support national trunk highway development, local roads improvement, and institutional strengthening –Regional and multi-sector interventions to reduce logistics costs –Contribute to integrating social & environmental concerns upstream  Countries faced with fiscal constraints (Philippines, Indonesia) –Strengthen institutions and capacity building –Focus on leveraging private sector participation (finance and services), towards increased competition, lower tariffs and better services (Philippines) –Established anti-corruption framework for transport  IDA countries (Laos, Cambodia, Mongolia, Pacific Islands) – Contribute to rehabilitate the infrastructure post-crisis, to support recovery in rural production and incomes –Contribute to expansion of rural access and development of sustainable transport with high impact on MDGs

27. 26 Matching transport strategic directions with EAP’s development drivers EAP’s Strategic Drivers Economic Growth UrbanizationMotorizationEnv./Social Externalities Regional transport corridors Private sector participation Sub-national development & competitiveness Enhancing efficiency in the use of resources and technologies Environmental and resettlement actions Quality planning and expenditure Asset management (maintenance) Analytical work on urban transport policies and institutions Social inclusion (rural transport) Road Safety HIV/AIDS People & freight mobility for competitiveness of urban economy Metropolitan area management and Institutional coordination Affordable public transportation for social/economic inclusion Inclusive/ participatory planning (urban) Climate change: GHG emissions (linked to air quality, energy efficiency, NMT, CF) Transport services & logistics bottle- necks; regional & modal integration Rural transport infrastructure management and services Interventions on non-highway sectors (railways, inland waterways) Increase transport investment & governance Deepen road sector environmental & social sustainability Increase engagement in urban transport Diversify engagement in non-highway sectors

28. 27 Country Focus (I) China Vietnam Urban & Multi-modal transport development Performance based contracting Road asset management Transport impacts mitigation Controlling overloading and other road safety issues Global best practice and innovation Sector policy, regulatory, and institutional frameworks Regional integration and trade facilitation Infrastructure financing and effective delivery of services Transport impacts mitigation Capacity building Urban transport development

29. 28 Country Focus (II) Indonesia Expand and extend freeway, national and district road network Road maintenance in provinces and rural areas Access to remote regions Stabilize the funding for road assets PPP framework, risk mgt. and land finance Good governance Philippines Thailand PPP frameworks; long- term and private finance Regional integration to reduce transport costs, increase access to social services Institutional reform in road sector Output-based asset mgt. and upgrading of highways Islands of good governance and anti- corruption Multi-modal transport and logistics Transport asset management Urban transport, especially for Bangkok and Chiang Mai Transport PPP framework and implementation support

30. 29 Country Focus (III) Mongolia State and local road network Institutional strengthening Regional integration and trade Road maintenance Urban transport management Railways CambodiaLao PDR Road maintenance and asset management Infrastructure financing and effective delivery of services Rehabilitation of provincial and rural transport Rural accessibility Capacity building at national and provincial level, including sector governance for budget mgt., procurement and financial mgt. Adequacy, quality and efficiency of national and provincial transport system Sub-national access to social services Road maintenance Cross-border transport and logistics Rural accessibility Capacity building at national and provincial levels Good governance

31. 30 Network Development & Improvement/Multi-Modal  China railway projects (IV & V)  China inland waterway projects (Jiangxi)  Highway projects in China, Indonesia, Vietnam  China comprehensive transport planning AAA Urban Transport  China 4 urban transport projects and GEF  Vietnam Hanoi urban transport  Philippines Manila bus dispatch (CF) Regional Integration  Vietnam Mekong Delta and North Delta  GMS AAA Rural Access  China Fujian highway sector investment project  Road projects in Laos, Cambodia, and Indonesia  Road maintenance projects in Pacific islands Sustainable Financing & PPP  Philippines LRT and CALA projects  Vietnam freeways AAA Key Strategic Activities in Transport Pipeline

32. 31 Thank You