Failure to meet the infrastructure needs of ASEAN could stifle growth in GDP and
employment and compromise a range of human development efforts in less-developed
ASEAN partners. Infrastructure is a rare “win-win” that generally boosts overall economic
productivity in the long run and creates jobs in the short term, the latter being of
significant importance given the current employment challenges and excess construction
capacity in many countries.
The McKinsey Global Institute report on Infrastructure Productivity1 suggests that an
increase of infrastructure investment equivalent to 1 percent of GDP could translate
into an additional 3.4 million direct and indirect jobs in India, 1.5 million in the United
States and 700,000 in Indonesia. In addition to supporting growth and job creation,
infrastructure investments lead to improved health, education and social outcomes. For
example, in the Indian state of Assam, a 1 percentage point increase in the electrification
rate, resulted in a 0.17 percentage improvement in the literacy rate, suggesting that
complete rural electrification of the region could contribute to raising the literacy rate to
74 per cent from 63 per cent.