Technology Transfer for Infrastructure … Transfer for Infrastructure Development in Nepal Surya...
Transcript of Technology Transfer for Infrastructure … Transfer for Infrastructure Development in Nepal Surya...
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Technology Transfer for Infrastructure Development in Nepal
Surya Raj Acharya, PhDSenior Research Fellow
Institute for Transport Policy Studies (ITPS)3-18-19 Toranomon, Minato-ku, Tokyo
[email protected] 12, 2008
The Second NEA-JC Workshop on Current and Future TechnologiesOctober 12, 2008
Tokyo, Japan
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Contents
Role of Infrastructure development
Capacity gap and resource gap
Technology transfer: issues
Examples from Japan, Korea
Sum-up
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Expressway development in China
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10000
20000
30000
40000
50000
60000
1988 1998 2002 2007
Expr
essw
ay (
km)
Data source: Fwa (2008)
Others countries (2003):
Indonesia: 580 km
Thailand: 331 km
Philippines: 173 km
India: ~200 km
..tells a lot about infrastructure and economic growth in China
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Road Transport: Situation in Nepal
When we will have a bridge?Bullock cart pulling a passenger bus crossing RIU RIVER (Chitawan): Photo source: kantipuronline.com
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Overall competitiveness Infrastructure competitive.Country Rank Score Rank Score United States 1 5.7 6 6.1 Germany 5 5.5 1 6.7 Singapore 7 5.5 3 6.4 Japan 8 5.4 9 6.0 Korea, Rep. 11 5.4 16 5.6 Hong Kong 12 5.4 5 6.2 France 18 5.2 2 6.5 Malaysia 21 5.1 23 5.3 Thailand 28 4.7 27 4.9 Spain 29 4.7 19 5.5 China 34 4.6 52 4.0 India 48 4.3 67 3.5 Indonesia 54 4.2 91 2.7 Vietnam 68 4.0 89 2.8 Sri Lanka 70 4.0 73 3.2 Philippines 71 4.0 94 2.7 Pakistan 92 3.8 72 3.2 Bangladesh 107 3.6 120 2.2 Nepal 114 3.4 128 2.0
Global Competitiveness Ranking 2007 (Countries: 131; full score 7)
Data source: World Economic Forum 2008
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Major constraints for Infra. Development
Resource Gaps
Domestic savingResource availability
Foreign exchange$$ to import project inputs
Viable finance• Govt Revenue• Special tax, bond• User’s fee• Private finance
Capacity Gaps
Human ResourceKnow-how
Organizationformulation and implementation of Plans & projects
InstitutionLaw, regulation, strategies and policies
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Which constraint is more binding for Nepal?
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Surplus domestic saving combined with increasing in- flow of remittance: relaxes resource gap pressure
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Capacity (technical) gap impacts in multiple ways–
Ability to implement project and operate services, facilities and maintain infrastructure
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Cost effectiveness of infrastructure building–
Multiplier effects in the economy
0 5 10 15 20 25
Philippines
Japan
Hong Kong
Nepal
Thailand
India
Pakistan
Bangladesh
US cent/unit
Electricity tariff* in Asia* Rate for household consumption (median group, 21~400 units)
Data source: UN-ESCAP (2007), NEA (2007)
Why electricity tariff in Nepal comparatively higher?
- Higher project cost due to lack of domestic capacity
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Consulting/construction industry: “Low-capacity Trap”
Firm size
Cos
t/Rev
enue
S1 S2S2
Revenue
Cost
Needs government support to escape the trap• Public sector firm, public-private ownership• Creating a viable market prospect (commitment for infrastructure investment)• Protection in market (for a fixed term) to minimize the risk
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Importance of conducive environment to facilitate the capacity building process
Institutional Capacity
Organizational Capacity
Human ResourcesCapital Resource
• Law, Regulation
• Policy support
• Long-term strategy
• Incentives
• Accountability
Research and development
Professionalism
Technology transfer
Learning-by-doing
Education, training
Opportunities for technology transfer: • Infrastructure projects with foreign consultants/contractors
- Projects under ODA (grants and loan) - Private sector funded projects
• Stand alone technology transfer activities (Technical cooperation etc)
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Emphasis more on peripheral capacity rather than on core capacity
Core capacity• Policy/plan• Financing• Technology• Management• Regulation
Peripheral capacity
• Participation• Decentralization
• Privatization• NGOs• Activism
Capacity building process in Nepal
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Efficiency/sustainability
Domestic resource Total Investment
Infrastructure/servicesEconomic development
Capacity
ODA
Ownership
ConditionsTA /TC
ODA implementationmechanism
Recipient’s participation
Learning-by- doing
Debt burden
ODA implementationmechanism
ODA
ConditionsTA /TC
Debt burden
Dynamics of ODA and Capacity Building
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Japan’s Experience: Railways
• First Railway line in 1872: Shimbashi-Yokohama• Almost 100 % inputs from Britain (including man power)• British expert’s wage: several times higher than local• Financing: London bond market, 12 % interest rate• Policy makers realized the value of technology transfer• Concrete plan for Technology Transfer (TT)• Tech. Transfer: Learning by Doing (“story of Mr. Page”)
• By 1880, mostly Japanese inputs (except locomotives)• By 1990, Locomotive also Japanese; steel industry • Rapid expansion of Railway network • Japan now world leader in railway technology
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1950’s
1960’s
“The roads of Japan are incredibly bad. No other industrial nation has so completely neglected its highway system.”Ralph J. Watkins, Road advisor in 1956
Japan’s Experience: Road development
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• In 1954, Japan established a system Five-Year Road Development Plan
• Watkin’s report 1956: like a “road bible”• The road planning system was supported by road
special account – Fuel and vehicle ownership taxes
• Japan Highway Public Corporation in 1956– Tolled expressways
• First Expressway: Osaka-Kobe only road project by World Bank loan-
effective technology transfer !
Comprehensive Road Development System
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Japan now boasts a network of high-quality highways….
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Korea: Seoul-Pusan Expressway•
4-lane highway planned, Seoul to Pusan
(428 km) in 1967
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Requested for World Bank loan: WB conditions−
4-lane too wide, scale down the design
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Need to employ foreign consultant and contractor•
Korean government position−
4-lane: for long-term (not for current demand)
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Local consultant/contractor’s lead role: learning-by-doing•
Result: No World Bank and other donor’s aid
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Korean government decided to do on its own•
Major bottleneck: Foreign exchange and know-how
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Made best effort (used $ from Koreans serving Vietnam war)
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Project completed 1970 before the schedule time !•
Rapid development Korean construction industry !
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Sum-up•
Infrastructure development: key development agenda for “New Nepal”
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Strategically, closing capacity gap is more important but not given due importance
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Need to set mechanisms for technology transfer thorough learning-by-doing
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Professionalism and research: develop ability to ask right question !
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Contribute to the process of setting “national vision”
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Lee Kuan Yew on Foreign Aid…(when Britain was planning to close military base in Singapore directly cutting down Singapore’s GDP by 20 %)
“Britain had promised ‘significant aid’…..I was determined that our attitude to British aid, indeed any aid, should be opposite of Malta’s….I was shaken by their (Malta’s) aid dependency, banking on continuing charity from the British, which nurtured a sense of dependency, not a spirit of self-reliance…I warned our workers ‘The world does not owe us a living. We can not live by the begging bowl’…” (page 52-53)
“ On my first visit to America in October 1967, I recounted to 50 business people……Singapore’s philosophy was to provide goods and services ‘cheaper and better than anyone else, or perish”. They responded well I was not putting my hand out for aid, which they had come to expect of leaders from newly independent countries…. (page 56)
Quoted from “From Third World to First” by Lee Kuan Yew
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“….Whereas the Chinese child grows up in an environment that is shaped by economic activities, the vast majority of Malays used to grow up as part of the peasantry………In the past, even the Malay people who had shops had no real sense of an efficient enterprise. Their Idea of business basically was that anything earned through the sale of goods should be regarded as pure profit…………..change people’s value and educate them in basic business skills…….We established a Ministry of Entrepreneur Development and a university entirely devoted to the training of business managers….special training schemes to educate Malays……they now own thousands of companies…”
Dr. Mahathir Mohamad
(quoted from, A New Deal for Asia, 1999)
Dr. Mahathir on capacity building..
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“The significant problems we face cannot be solved by the same level of thinking that created them”
….Thank you for your attention!
Albert Einstein