Underdeveloped infrastructure and poor domestic and international connectivity prevented Indonesia from achieving its growth potential. Furthermore, the pace of economic growth and job creation was insufficient to reverse the declining poverty reduction rate and widening rural-urban disparity as well as close the socioeconomic gap between the western and eastern regions.
The interior regions of the People’s Republic of China (PRC) have not benefited as much from economic growth and reforms as the east coast. In fact, the gap in economic and social development had been increasing in the years leading to the project appraisal in 2005. Inadequate transport infrastructure and high logistics costs were among the key constraints.
After rapidly increasing for 3 decades, Thailand’s growth had slowed in the years prior to project appraisal in 2009. Reinvigorating growth by strengthening competitiveness thus became the centerpiece of the government’s economic policy.
Agriculture has always been an important sector of India’s economy. In 2009, it contributed 16% of the country’s gross domestic product, and in 2010, employed 53% of its workforce. Over a decade before project appraisal in 2010, however, sector performance had been below government targets due to lack of infrastructure, weak backward-forward linkages, and inadequate production capital.
During 2000–2005, infrastructure investments in Indonesia dropped to an annual average of 3% of gross domestic product (GDP), from 8% of GDP during 1995–1997. Private infrastructure investment fell sharply from 1.8% of GDP during 1995–1998 to 0.5% of GDP in 2000–2005.