Infrastructure gaps limit economic growth & human development - this short revision video helps to explain why

Infrastructure Gaps

Infrastructure gaps limit growth & human development because

1. It increases supply costs for businesses – this causes higher prices – therefore hitting real incomes for consumers
2. Reduces geographical mobility of labour causing higher structural unemployment (labour market failure)
3. Damages export competitiveness and limits intra-regional trade (e.g. trade within the sub Saharan Africa continent)
4. Can make a country less attractive to inward foreign direct investment (FDI) which might then slow economic growth
5. Makes an economy vulnerable to effects of climate change / natural disasters such as flooding and earthquakes
6. Contributes to gender inequality

Here is a good example of the economic cost of poor infrastructure on the Indian economy.