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Costs of Infrastructure Deficiencies for Manufacturing in Nigerian, Indonesian and Thai Cities

World Bank, Washington, DC, kyusiklee{at}aol.com.

Alex Anas

Department of Economics, SUNY at Buffalo, 405 Fronczak Hall, Amherst, New York 14260, USA, alexanas{at}anassunl.eco.buffalo.edu.

Gi-Taik Oh

World Bank, 1818 H Street, NW, Washington, DC 20433, USA, goh{at}worldbank.org.

This paper is a sequel to an earlier paper on Nigeria published in this journal. Using the fresh results obtained from the sample survey of manufacturing establishments conducted in Indonesia and Thailand (a sample of 290 and 300 establishments, respectively), the authors contrast and compare the findings from these new data with those of an earlier study on Nigeria. The main elements of comparisons include: the extent and incidence of public infrastructure deficiencies; the extent of manufacturers' private provision responses to the deficiencies; the capital shares of various private infrastructure investments including electric power, water, telecommunications, transport and waste disposal; and, costs of producing their own electricity and water. The extent of public infrastructure deficiencies and private provisions varies across the countries and firm sizes. For example, 92 per cent of the Nigerian firms had their own generators to supplement the inadequate public supply, while the figure was 66 per cent in Indonesia and only 6 per cent in Thailand. However, the quality of electric power in Thailand was not very different from that of Indonesia. The total share of capital investment in private infrastructure was 16 per cent of the total capital in the case of the Indonesian firms which is comparable with 14 per cent in the case of the Nigerian firms, but is twice that of the Thai firms. The private costs of infrastructure deficiencies are substantial and the burdens are much greater for small firms than large firms, which has a negative implication for the birth and growth of firms, hence employment and income generation, in cities in developing countries.

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