EIB Papers Volume 13. n°1/2008 - European Investment Bank

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Table 7. Infrastructure indicators in NMS and the EU-12 (per 1,000 people) Fixed and mobile phone subscribers Electricity generation (kwh) 130 Volume13 N°1 2008 EIB PAPERS Road networks (km) Internet users 1991-1995 1998-2002 1991-1995 1998-2002 1991-1995 1998-2002 1991-1995 1998-2002 Baltic states Estonia 7.1 6.2 245.6 740.1 5.3 8.2 10.5 228.5 Latvia 1.7 1.9 261.8 506.5 5.6 22.7 .. 68.6 Lithuania 4.6 4.2 235.1 514.6 12.3 19.5 .. 64.0 Czech Republic 5.8 6.9 197.9 816.9 5.4 12.4 11.0 121.5 Central and Eastern European countries Hungary 3.2 3.6 161.9 714.3 6.5 6.8 2.8 95.3 Poland 3.5 3.7 118.5 413.5 6.2 6.5 2.4 99.2 Slovak Republic 4.5 5.5 173.2 564.6 4.0 6.9 3.2 92.1 Slovenia 6.2 7.0 273.7 925.6 5.7 10.1 14.4 210.7 Bulgaria 4.5 5.1 281.4 485.2 4.0 4.3 0.5 50.9 Recently acceded members Romania 2.5 2.4 117.5 297.4 3.4 4.5 0.4 46.1 Memorandum items: Group average 4.6 4.9 208.5 649.5 6.4 11.6 7.4 122.5 Baltic states 4.5 4.1 247.5 587.0 7.7 16.8 .. 120.3 Central Eastern Europe 4.6 5.3 185.0 687.0 5.6 8.6 6.8 123.7 Recently acceded members 3.5 3.7 199.5 391.3 3.7 4.4 0.4 48.5 EU-12 average 5.5 6.5 473.1 1,119.1 11.1 15.4 10.6 234.9 Source: World Bank (2005) Note: EU-12 average refers to simple averages of the 12 countries of the Euro area before 2007: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxemburg, the Netherland, Spain, and Portugal.
Table 8. Infrastructure investment needs for NMS, 1995-2010 Sector Reference Investment needs Roads Modernization/construction to EU-15 average density Railways Modernization/construction to EU-15 average density Telecoms Telecom density of 35 mainlines per 100 citizens Water/Sewage European standards for collection and treatment Energy Network development, oil, gas and coal sector reforms in EUR billion in percent of GDP 44 0.5 37 0.4 63 0.9 180 1.5 110 1.4 Environment EU-Directive Air Pollution and Waste 71 0.3 Sum 505 5.0 Source: Brenck et al. (2005) Most estimates of investment needs have significant shortcomings regarding the concepts and methodologies used. A particular limitation of most estimates of infrastructure investment needs is that they abstract from country-specific resource and absorption capacity constraints (IMF 2005). Therefore, they cannot provide concrete policy guidance on how and within what timeframe to meet these needs. Furthermore, they also cannot distinguish priority needs (i.e., those that address growth bottlenecks) and low-priority needs. Hence, these approaches need to be complemented with assessments of the scope for mobilizing both private and public resources for infrastructure spending on the basis of a macro-fiscal policy framework and a clear prioritization of projects based on their economic and social rates of return. The appropriate public investment strategy for the NMS will vary from country to country and critically depend on the macro-fiscal environment. In principle, countries have several options for upgrading their infrastructure. These include: raising financing for public investment by borrowing, increasing public saving, and reallocating public spending from other sectors; getting more out of their investments by improving investment planning and project evaluation and implementation procedures; and encouraging private sector investment. These can be classified according to whether they operate primarily through the private sector or the public sector, and the time needed to implement them (IMF 2005) (Table 9). That said, all EU countries must adhere to the common public deficit and debt ceilings of the Stability and Growth Pact, which limits their room for manoeuvre with regard to public investment. In addition, the particular fiscal and macroeconomic environment in the NMS further constrains some of the options for increasing public investment. Countries with stronger fiscal positions, like the Baltics, usually have more policy flexibility, although they may be constrained by other considerations (e.g., an overheating economy). In contrast, countries with large fiscal deficits and debt levels, such as Hungary, would generally need to match increases in public investment with similar increases in public saving, which will need to be driven by reforms aimed at limiting current expenditures given an already large tax burden. Macro-fiscal frameworks and social-returns analyses should be used to select projects and to decide when and how to implement them. EIB PAPERS Volume13 N°1 2008 131
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EIB Papers • Volume 13 • No1
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Preface This year the European Inve
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Infrastructure investment, growth a
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Government investment is not the sa
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Different types of government inves
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Infrastructure accounts for one-thi
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A common feature for the new member
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The share of transport in governmen
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The proxies are subject to caveats.
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The shares of infrastructure and ho
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There have been marked differences
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Government transport investment has
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Transport and other infrastructure
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In some countries a shock to public
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The analysis accounts for long-run
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Table 1. Some VAR studies (publishe
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There is no systematic pattern for
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High variability of the public-capi
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Has the impact of public capital on
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Productivity of public capital incr
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The impact of public capital on out
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