Blog |March 12, 2018
Conversations on connectivity, part 1: What lies at the core of connectivity?
In between the plenary panels and roundtable discussions at the first GICA annual meeting held in Paris this past January, we sat down with session panelists and GICA members for an informal Q&A about the core of infrastructure connectivity—why it matters in the broadest sense and on a personal level too.
Thank you to Morag Baird, Senior Manager, Global Infrastructure Hub; Jan Hoffmann, Chief, Trade Logistics Branch, UNCTAD; Iza Lejárraga, Head of Unit, Investment Division, Directorate for Financial and Enterprise Affairs, OECD; and Naoyuki Yoshino, Dean, Asian Development Bank Institute, for sharing their insights and perspectives on why infrastructure connectivity matters to all of us.
Question: Why does infrastructure connectivity matter?
Baird: Connectivity is critical to economic growth. It helps optimize efficiencies across a large network and genuinely helps countries find solutions. We need to take a balanced point of view, recognizing its strengths and also analyzing the risks and what can be done to mitigate those risks. As with any change, there will be people that benefit and people who don’t and we need to manage that change better. Connectivity is something that affects everything in our lives. We need to have an eye on the future and how we can make connectivity work for the best.
Hoffmann: In our work, we highlight “soft” connectivity, which we need and where UNCTAD is stronger in terms of facilitating trade, modernizing procedures, investing in customs and port reforms, but of course we need both soft (services, regulations, institutions) and hard (air, ICT/digital, maritime, road/rail) connectivity. The Sao Tome & Principe port provides a good example of where we need these two dimensions. UNCTAD helps the port with trade facilitation, and World Bank project helps with risk management and updating procedures. But the infrastructure is a huge bottleneck—because the port is not deep enough for ships to reach the port, they need barges to connect to bigger ships that anchor outside.
Lejárraga:Infrastructure connectivity matters because we know it is essential to support a globalized economy. This is all the more important in a world of Global Value Chains, which are more sensitive to efficient and reliable infrastructure than traditional trade flows. We cannot have market access without market connectivity. I have worked on trade and investment agreements all my life, where we focus on reducing protectionism and improving regulations. But open markets cannot deliver the expected gains without connectivity. Trade negotiators put a lot of time and effort into signing trade agreements, which I see as a legal bridge for trade and FDI, but there needs to be physical and digital bridges for business to actually use these agreements. The link between connectivity, trade, and FDI suggests that infrastructure plas should also be coordinated with the trade and investment strategies of the country.
Yoshino: First, connectivity is important for agriculture. Without connectivity, farmers can only sell crops locally. However, urban cities are growing and they need fresh produce. With good infrastructure, crops can be shipped from rural farms to urban areas in a very short time.
Secondly, connectivity via shipping and ports is important for cross-border markets, trade, and expansion of manufacturing and small business. Good ports can connect regions all around the world, which enhances revenues by exporting and importing necessary goods.
Question: What does connectivity mean to you?
Baird: Though GICA is dealing with the inter-country aspect, connectivity is much broader than that. Personally, connectivity means keeping in contact with people around the world, encouraging diversity, travel—making the most of people’s potentials that they can explore and create. Connectivity is not just important between one country and the other. There is also connectivity from one city to another, from one community to another, within communities, and between age groups.
Hoffmann: For me, it’s not an end in itself. At UNCTAD we look at development of countries, to help them trade better and benefit from opportunities. We have done some similar work on the determinants of transport costs, to help developing countries reduce costs and connect better we need to first understand what explains those transport costs and connectivity. The liner shipping connectivity index has shown to be a very useful indicator.
Lejárraga: I come from Panama, a country born out of a connectivity vision, the creation of the Panama Canal. I grew up with my father telling me stories of all the ships passing through the Panama Canal—this vessel comes from China, carrying semi-conductors, going to the port of New York. Hence, connectivity is part of my national identity, and I believe the exchanges it enables across countries and cultures improve our lives, not just in an economic sense, but at a human level as well. When two nations or populations are interconnected there’s less friction and far more tolerance, understanding, innovation, and possibilities.
Yoshino: First, I think of cultural connectivity, of cultures being linked to each other, for example via the Silk Road.
Second, I think of human connectivity. Each of us came to Paris by train or airplane to discuss connectivity in person. Each person has a different background, culture, environment, and in just two days, we learned a lot about each other. We can bring that knowledge back to our organizations to enrich our work around the world.
MEET THE RESPONDENTS
Morag Baird joined the Global Infrastructure Hub (GI Hub) in 2016 on secondment from the UK Department of International Development (DFID) and leads the GI Hub “leading practices” mandate. This area of the GI Hub’s mandate facilitates knowledge sharing by analysing leading practices from around the world to develop tools and practical guidance that will enable governments to take quality infrastructure projects to market.
Morag is a senior infrastructure adviser with over 25 years of experience working on infrastructure issues particularly in developing countries. She brings extensive international experience at both policy and project level including worked based in DFID Ethiopia, Sierra Leone, Bangladesh and Central Asia. During her international postings she has led ondevelopment of infrastructure programmes and the relationship with partner government Ministries, private sector and NGOs. Prior to joining the GI Hub she worked at the European Investment Bank (EIB) focusing on Africa strategy, blended finance and infrastructure project preparation facilities, impact finance and results measurement.
Before joining DFID in 2000, Morag worked with a UK engineering consultancy and her expertise as a chartered civil engineer spans all main infrastructure sectors especially energy, water and transport. She holds a Master’s degree in Engineering from Cambridge University.
Jan Hoffmann joined UNCTAD in 2003 and is currently Chief of the organization’s Trade Logistics Branch, responsible for research and technical assistance programmes in international transport and trade facilitation. Jan is co-author and coordinator of the “Review of Maritime Transport,” initiated the UNCTAD “Maritime Country Profiles,” and created the annual “Liner Shipping Connectivity Index.” Previously, he spent six years with the UN Economic Commission for Latin America and the Caribbean in Santiago de Chile, and two years with the IMO in London and Santiago. Prior to this, he held part time positions as assistant professor, import-export agent, consultant, and seafarer on an Antigua and Barbuda flagged tweendecker. Jan has studied in Germany, UK and Spain, and holds a PhD in Economics from the University of Hamburg. He is member of the boards of various journals and associations and president of the International Association of Maritime Economists (IAME).
Iza Lejárraga is Head of Unit, Investment Division, Directorate for Financial and Enterprise Affairs, at the OECD. Before joining the OECD, she was a Research Economist with the Regional Integration and Trade Department as well as the Development Research Department of the African Development Bank. Previously, she worked at the International Trade Department of the World Bank, and prior to that she was at the Trade Unit of the Organization of the American States. She has provided analytical and technical support to a wide array of regional trade negotiations with Latin American and African countries, from Economic Partnership Agreements (EPAs) to the Free Trade Area of the Americas (FTAA) process. She did her graduate studies in international economics and development at Harvard University, where she has been a post-graduate Research and Teaching Fellow and Visiting Scholar at the Center for International Development.
Naoyuki Yoshino is Dean of the Asian Development Bank Institute (ADBI) and Professor Emeritus at Keio University, Tokyo, Japan. He obtained his PhD from Johns Hopkins University (United States) in 1979 where his thesis supervisor was Sir Alan Walters, economic adviser to former British Prime Minister Margaret Thatcher. Naoyuki has been a visiting scholar at the Massachusetts Institute of Technology (United States) and a visiting professor at various universities including the University of New South Wales (Australia), Fondation Nationale des Sciences Politiques (France), and University of Gothenburg (Sweden). He has also been an assistant professor at the State University of New York at Buffalo and an economics professor at Keio University.
Naoyuki's professional career includes membership in numerous government committees. He was named Director of the Japan Financial Services Agency's (FSA) Financial Research Center (FSA Institute) in 2004 and is now Chief Advisor. He was appointed as Chair of the Financial Planning Standards Board in 2007. He has served as Chairperson of the Japanese Ministry of Finance's Council on Foreign Exchange as well as its Fiscal System Council (Fiscal Investment and Loan Program Section). Additionally, he has been a Board Member of the Deposit Insurance Corporation of Japan and President of the Financial System Council of the Government of Japan.
He was nominated for inclusion in Who's Who in the World for 2009 and 2013, and was named one of the Top 100 Educators in 2009. He obtained honorary doctorates from the University of Gothenburg (Sweden) in 2004 and Martin Luther University of Halle-Wittenberg (Germany) in 2013. He also received the Fukuzawa Award in 2013 for his contribution to research on economic policy.