MEDiterranean PROspects

Lack of adequate infrastructure is a significant inhibitor to increased trade of the countries of the Mediterranean region. Bringing their transport infrastructure to standards comparable with countries of a similar per capita GDP will be costly but worthwhile.

We compare the current quantities of six types of transport infrastructure with international benchmarks, and estimate the additional quantities needed to reach the benchmarks. We also estimate the cost of that infrastructure and express it as a percentage of GDP. Finally we make tentative estimates of how much trade might be generated and how this might impact on GDP. All the estimates are made for 11 southern and eastern Mediterranean countries (SEMCs) under four scenarios.

The greatest need for additional infrastructure is for airport passenger terminals (between 52% and 56%), whereas the least is for more unpaved roads (between 7% and 13%). The investment (including maintenance) cost would be between 0.9% of GDP and 2.4% of GDP, although the investments in some countries would be between 1.4% and 4.5% of GDP.

The impact on non-oil international trade would be substantial, but with differences between imports and exports. The overall trade balance of the 11 countries would be an improvement of between 5.4% and 17.2%, although some countries would continue to have a negative balance. A final assessment is made of the benefit ratio between the increase in GDP and the cost of transport investment. This varies between about 3 and 8, an indication of the high return to be expected from increased investment in transport infrastructure.

Until recently Robin Carruthers was a Lead Transport Economist at the World Bank, responsible for the quality of its evaluation of transport projects and its transport research, and is the principal author of its Toolkit on Transport Corridors and a major contributor to its guide to Trade and Transport Facilitation. He is now a consultant to several international lending institutions on transport, trade and infrastructure, and their interrelationships.