Development and Globalization: Facts and Figures2016 United Nations Conference on Trade and Development

Target 9.1: Resilient infrastructure

Develop quality, reliable, sustainable and resilient infrastructure, including regional and trans-border infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all.
Figure 9.2. The three pillars of sustainable and resilient transport infrastructure

Transport infrastructure is integral to any national, regional and transborder infrastructural assets. Existing definitions of sustainable and resilient transport vary and tend to promote one particular dimension, such as the environment (green transport), society (inclusive transport) or the economic dimension (efficient and competitive transport). A clearer definition and an improved understanding of the concept is, however, required to help better identify relevant sustainability and resilience criteria. A universally agreed definition would facilitate a better assessment and quantification of progress (UNCTAD, 2015a). Sustainable and resilient transport infrastructure entails, among other features, the ability to provide transportation that is safe, socially inclusive, accessible, reliable, affordable, fuel-efficient, environmentally friendly, low-carbon, and resilient to shocks and disruptions, including those caused by climate change and natural disasters (UNCTAD, 2015a).

Figure 9.2 illustrates the intersection between the economic, social and environmental dimensions of sustainable development as applicable to transport and the transport infrastructure. Given the strong nexus between trade-led growth, energy use and environmental concerns, including those related to climate change, integrated consideration of these issues is required to devise policies that ensure sustainable and inclusive long-term growth. Achieving Goal 9 will require that relevant sustainability and resilience criteria be integrated and mainstreamed into all modes of transport.

In 2012, UNCTAD published a report (UNCTAD, 2012a) to assist in evaluating the benefits of accession to the most modern international legal instruments in the field, which may offer Contracting States substantial compensation in case of an oil spill. The report was prepared with particular reference to the interests of coastal developing states, including SIDS, as their exposure to damage arising from ship-source oil pollution incidents poses a potentially significant economic threat. Also in the context of marine pollution, UNCTAD has also been analyzing the potential implications of the carriage of HNS substances.

Figure 9.3. The Organization for Economic Cooperation and Development (OECD) Industrial Production Index and indices for world gross domestic product (GDP), merchandise trade and seaborne shipments, 1975–2014 (1990=100) Download data
Figure 9.3: Line chart
Source: UNCTAD (2015b).
Note: World merchandise trade refers to exports. The seaborne trade data reflect goods loaded at ports worldwide (a proxy or equivalent to exports). Data on goods loaded at ports worldwide and carried on international maritime routes are compiled by the UNCTAD secretariat on the basis of data supplied by reporting countries and as published on the relevant government and port-industry websites, and by specialist sources.

Recognizing the importance of transport infrastructure, the Inter-agency and Expert Group on Sustainable Development Goal Indicators (IAEG-SDG) has proposed that freight volumes, including by mode of transport be used to measure progress towards the realization of target 9.1. The proposed indicator recognizes that absent or insufficient transport infrastructure capacity, including ports, rail and road networks, can significantly jeopardize and constrain the levels and movement of freight volumes. Maritime freight is critical in particular given the role of maritime transport as the backbone of globalization that underpins regional and international cross-border transport networks, and supports supply chains, cross-border trade and international production processes. The added importance and relevance of freight volumes as an indicator of the state of infrastructure stems from the role of the transport sector in enabling industrial development through, inter alia, driving manufacturing growth, linking rural and urban economies, enhancing the productivity of farmers, bringing together consumers, intermediate and capital-goods industries, generating employment, and promoting regional economic and trade integration.

Although freight volumes provide a useful measure from which to infer the quality and adequacy of the underlying transport infrastructure, it should be noted that apart from infrastructure, other factors also contribute to driving freight volume levels. Demands for transport infrastructure, and by extension freight volumes, are also derived from growth in, among others, the economy, population, consumption needs, industrial activity, urbanization and trade (see figure 9.3).

Maritime freight volumes

Maritime freight accounted for 80 per cent of world merchandise trade by volume in 2014.

UNCTAD has an extensive set of time series measuring international maritime freight volume as well as other related performance indicators that could be used to indicate the level and quality of the underlying transport infrastructure, such as transport costs and the Liner Shipping Connectivity Index (UNCTADstat). Latest UNCTAD estimates for 2014 indicate that international seaborne trade volumes grew by 3.4 per cent in 2014, adding more than 300 million tons and taking the total volume to an estimated 9.8 billion tons (UNCTAD, 2015b). UNCTAD further estimates that maritime freight accounted for about 80 per cent of world merchandise trade by volume in 2014. In value terms, some observers such as Lloyd’s List Intelligence have estimated the share of maritime seaborne trade at 55 per cent in 2013, while other estimates are closer to 70 per cent (Bingham, 2016). Containerized trade accounts for most of the total value.

Table 9.1. Development in international seaborne trade, selected years (Millions of tons loaded) Download data
YearOil and gasMain bulksOther dry cargoTotal
(all cargoes)
19701 4404487172 605
19801 8716081 2253 704
19901 7559881 2654 008
20002 1631 2952 5265 984
20052 4221 7092 9787 109
20062 6981 8143 1887 700
20072 7471 9533 3348 034
20082 7422 0653 4228 229
20092 6422 0853 1317 858
20102 7722 3353 3028 409
20112 7942 4863 5058 784
20122 8412 7423 6149 197
20132 8292 9233 7629 514
20142 8263 1123 9039 842
Source: UNCTAD (2015b).
Note: Iron ore, grain, coal, bauxite/alumina and phosphate rock.
Figure 9.4. International seaborne trade, selected years (Millions of tons loaded) Download data
Figure 9.4: Bar chart
Source: UNCTAD (2015b).
Note: The seaborne trade data reflect goods loaded at ports worldwide (a proxy or equivalent to exports). Data on goods loaded at ports worldwide and carried on international maritime routes are compiled by the UNCTAD secretariat on the basis of data supplied by reporting countries and as published on the relevant government and port-industry websites, and by specialist sources.

The critical role of sustainable and resilient infrastructure cannot be overemphasized for the attainment of Sustainable Development Goal 9, considering, in particular, the rise of developing countries as key exporters and importers. Developing countries are contributing larger shares to international maritime freight volumes, with their 2014 contribution in terms of global goods loaded being estimated at 60 per cent and their import demand as measured by the volume of goods unloaded having reached 61 per cent (see figure 9.5).

Behind the headline figures however, the individual contributions vary by region and type of cargo, reflecting, among other factors, differences in countries’ economic structures, composition of trade, urbanization, levels of development, levels of integration into global trading networks and supply chains, and the quality of transport infrastructure.

Figure 9.5. World seaborne trade by country group, 2014 (Percentage share in world tonnage) Download data
Figure 9.5: Bar chart
Source: UNCTAD (2015b).
Note: The seaborne trade data reflect goods loaded at ports worldwide (a proxy or equivalent to exports). Goods loaded (or exports) are generally used as the main measure of seaborne trade. It is assumed that if goods were loaded from ports on board deep sea ships (that is, sailing on international maritime routes) somewhere, they will end up being unloaded (imports) somewhere else. Data on goods loaded at ports worldwide and carried on international maritime routes are compiled by the UNCTAD secretariat on the basis of data supplied by reporting countries and as published on the relevant government and port-industry websites, and by specialist sources.
Figure 9.6. World seaborne trade by region, 2014 (Percentage share in world tonnage) Download data
Figure 9.6: Bar chart
Source: UNCTAD (2015b).
Note: The seaborne trade data reflect goods loaded at ports worldwide (a proxy or equivalent to exports). Data on goods loaded at ports worldwide and carried on international maritime routes are compiled by the UNCTAD secretariat on the basis of data supplied by reporting countries and as published on the relevant government and port-industry websites, and by specialist sources.

In recent decades, developing countries have incrementally shifted their patterns of trade. Since the 1970s the distribution between the goods loaded and unloaded has been altered significantly, with developing countries becoming major importers and exporters and a key driving force underpinning maritime freight volumes and demand for maritime transport services. Developing countries are no longer simply sources of supply of raw materials, but are now key players in globalized manufacturing processes and a growing source of demand. In terms of regional influence, Asia remained the main loading and unloading area in 2014, followed by the Americas, Europe, Oceania and Africa (figure 9.6).

Sustainable and resilient transport

Sustainable and resilient transport infrastructure systems are a prerequisite for successful trade and economic integration, as well as for attracting investment, developing enterprise and building productive capacities. However, with transport being a derived demand that responds to developments and trends in the world economy, significant pressures are being imposed on international transport systems. Trade-related international freight is expected to grow more than fourfold by 2050 (compared with 2010). It is projected that one third of trade in 2050 will occur among developing economies (compared to 15 per cent in 2010) (OECD and International Transport Forum (ITF), 2015). World road and rail freight volumes are expected to increase by 230 per cent and 420 per cent, respectively, by 2050 (compared with 2010), depending on freight intensity of GDP growth. The share of road freight in international freight tonnage is expected to increase by 40 per cent by 2050 (OECD and ITF, 2015).

These pressures increase exposure to global risks such as unsustainable energy use, high oil prices, environmental degradation and climate change. Indeed, in addition to raising transport costs and acting as a barrier to trade, heavy reliance on oil for propulsion undermines resource-conservation objectives and leads to environmental deterioration through pollution as well as carbon emissions. Carbon dioxide (CO2) emissions generated by all modes engaged in international trade between 2010 and 2050 are projected to grow by a factor of 3.9 (OECD and ITF, 2015). In this context, locking in fossil fuels and related technologies into freight transport, including maritime transport, will perpetuate unsustainable transport patterns. Breaking away from fossil-fuel-intensive maritime transport systems and a shift towards greater sustainability and resilience, including through tailored and targeted policies, regulations, incentives and programmes, is an imperative for freight transport (UNCTAD, 2009a, UNCTAD, 2010, UNCTAD, 2015a). UNCTAD has made available much-needed empirical data to advance the understanding of oil prices as a determinant of maritime freight rates (UNCTAD, 2010).

One hundred and thirty-six port megacities around the world are vulnerable to coastal flooding.

While reducing greenhouse gas emissions (GHG) remains an urgent imperative to ensure manageable global warming levels, the effects of climate variability and change – irrespective of the causes – are already being felt, often in the poorest countries with low adaptive capacity (UNCTAD, 2012b). Transport networks and coastal transport infrastructure in particular ports are likely to be highly affected by climate change factors given the ports’ location and vulnerability (UNCTAD, 2009a, UNCTAD, 2011a, Becker et al. 2013). One study estimated in 2005, that the value of potential damage induced by the exposure of 136 port megacities to coastal flooding was US$3 trillion (Nicholls et al., 2008). Assuming a sea level rise of half a metre by 2050, the assetBuildings, transport infrastructure, utility infrastructure, physical assets within built infrastructure, vehicles and other assets.
exposure of these 136 ports was projected to be US$28 trillion (Lenton et al., 2009). Building climate resilience of transport infrastructure, including maritime and inland, is therefore a pre-condition for sustainability (UNCTAD, 2011a, UNECE, 2013, Becker et al. 2013). The special case of the geographically disadvantaged and economically vulnerable countries, namely landlocked developing countriesLandlocked countries have no territorial access to the seas, limited border crossings and transit dependence.
(LLDCs) and small island developing StatesSIDS were recognized as a distinct group of developing countries facing specific social, economic and environmental vulnerabilities at the Earth Summit, held in Rio de Janeiro (3–14 June 1992).
(SIDS) requires particular focus given the underlying vulnerabilities and the particular transport and logistical challenges, as well as the sustainable development gaps facing these economies (UNCTAD, 2014a and UNCTAD, 2014b).

Figure 9.7. International freight costs by country group, 1985–2014 (Percentage of value of imports, 10-year averages) Download data

UNCTAD, as part of its work on transport policy and legislation has been working, ahead of the curve, on the implications of climate change for maritime transportation, since 2008. The particular focus of this work is on impacts and adaptation needs of seaports and other coastal transport infrastructure. Ongoing work drawing also on insights gained at a number of expert meetings (UNCTAD, 2009a, UNCTAD, 2011b, UNCTAD, 2012b, UNCTAD, 2014c) includes a technical assistance project on Climate change impacts on coastal transport infrastructure in the Caribbean: enhancing the adaptive capacity of SIDS (UNDA 9th tranche), which is being implemented over the period 2015-17. The aim of the project is to strengthen the capacity of policy makers, transport planners and transport infrastructure managers in SIDS to (a) understand climate change impacts on coastal transport infrastructure – in particular seaports and airports - and (b) take appropriate adaptation response measures. To this end, based on a case-study approach focusing on two vulnerable SIDS in the Caribbean region (Jamaica and St. Lucia) a transferable methodology for assessing climate-related impacts and adaptation options is being developed.

For many developing countries these pressures are compounded by persistent challenges such as relatively high transport costs and important infrastructure gaps and requirements. Prohibitive transport costs undermine the ability to achieve a more inclusive trade-led growth, requiring access to affordable, reliable and cost-effective transport systems (UNCTAD, 2010, UNECE, 2015). Although maritime freight costs as a percentage of the value of traded goods has fallen globally by around 15 per cent over the last two decades, it remains very high for many developing countries (see figure 9.7). To level the playing field and enable developing countries to effectively compete in the global market place and therefore make progress towards sustainable and resilient transport systems, managing transport costs is crucial.

In addition to transport costs, addressing the persistent infrastructure issues (that is, insufficiency, inadequacy, congestion, and poor maintenance) is key to ensuring the sustainability and resilience of transport systems that support trade flows and freight movements. Transport infrastructure gaps are a challenge that raise costs, reduce access and undermine effective participation in global transport networks (UNECE, 2015).

Spending on infrastructure in developing countries must at least double, to reach US$1.8 trillion–US$2.3 trillion per year by 2020.

Infrastructure development needs, and the associated financing gaps, have been widely acknowledged. Various estimates for future investment needs in the transport sector have been put forward. These include: US$1.1 trillion per annum worldwide over the period 2013–2030 (International Energy Agency (IEA), 2014); around US$1.1 trillion per annum worldwide over the period of 2014–2025 (PricewaterhouseCoopers and Oxford Economics, 2015); US$2.5 trillion in 2008 prices (comprising US$1.8 trillion for new capacity and US$0.7 trillion to replace life-expired assets) in 30 countries in Asia for the period 2010–2020 (Asian Development Bank (ADB) and ADB Institute, 2009); US$1.4 trillion per annum worldwide over the period 2013–2030 (The Economist, 2014); and US$11 trillion over the 2009–2030 period (OECD, 2011).

To close the gap on the large infrastructure deficit in developing countries, including in transportation, existing estimates indicate that spending must reach US$1.8 trillion-US$2.3 trillion per year by 2020, compared with the current levels of US$0.8 trillion–US$0.9 trillion (United Nations Development Programme, 2013) (See Goal 7). Currently, 60 per cent of estimated total annual transport infrastructure investments are allocated to countries of the Organization for Economic Cooperation and Development (OECD) (Partnership on Sustainable Low Carbon Transport, 2015). Sustainability, resilience, affordable and equitable access require that investment in transport infrastructure be scaled up and that a greater share of relevant investments be channelled towards the transport infrastructure of developing countries. Furthermore, new sources and mechanisms of finance and greater cooperation between public and private investment partners are required (UNCTAD, 2009a, UNCTAD, 2011b, UNCTAD, 2011c, UNCTAD, 2015a).