**Total infrastructure investment in South Asia increased from 4.7 percent of GDP in 1973 to 6.9 percent in 2009, but fluctuated considerably around this trend.** It rose from a low of 4.7 percent in 1973 to peak at 7.1 percent in 1985, before dropping down to only 5.0 percent in 1997 and then rising again to 6.9 percent in 2009 (Figure 2a). Nonetheless, despite these fluctuations, the total change in annual infrastructure in South Asia during 1973-2009 was sizeable, increasing by more than 47 percent.

**The main driver of these fluctuations was the large infrastructure investment in electricity generation in the region during the 1980s.** Infrastructure investment in the electricity sector on average constituted more than a third of the total portfolio (Figure 2b), but fluctuated considerably during the 1973-2009 period. Infrastructure investment in electricity was only 1.9 percent of GDP in 1973. It then increased dramatically to almost 3 percent GDP in the mid-1980s, as India, Pakistan, and Nepal invested heavily in the sector. Subsequently, investment dropped to merely 1.5 percent of GDP at the turn of the century before rising again to 2.4 percent in 2009.

**In contrast, investment in transport, water supply and sanitation, and irrigation was much more stable.** Infrastructure investment in transport remained stable throughout most of the period averaging 1.8 percent of GDP per year and 31 percent of total investment. After an initial upsurge from 1.3 percent in 1973 to about 2 percent in the 1980s, it largely fluctuated around this trend. Similarly, infrastructure investment in water supply and sanitation, as well as irrigation, remained fairly constant at the average of 0.9 percent and 0.1 percent of GDP respectively. However, the figures for irrigation mask a continual decline in the sector's contribution to total investment. In fact, the share of irrigation declined from 20 percent in the early 1970s to merely 13 percent in 2009.

**Over the past four decades an increasing amount of resources were devoted to the emerging telecom sector, although its overall contribution remains small.** In 1973, investment in this sector stood at only 0.3 percent of GDP, but rose to an impressive 1.1 percent in 2009. As a result, its share of total investment doubled, from 6 percent in 1973 to 16 percent in 2009.

**Figure 2: Electricity is Driving the Rise in Infrastructure Investment** _Investment in Infrastructure in South Asia, 1973-2011 (Percentage of GDP)_

<!-- Start of picture text --> a. Total Investment as Percentage of GDP b. Share by Sector of the Total Investment<br>10%<br>Electricity<br>8%<br>11%<br>6% 7% Transport<br>4% 37% Irrigation<br>15%<br>2%<br>31% Water supply<br>0% and Sanitation<br>Telecommunicat<br>ions<br>1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 (*)<br><!-- End of picture text --> Sources: Data has been collected from the public investment plans for each country. The Investments for the region were computed as a weighted average by GDP level across the countries in SAR. _Note:_ Missing data is linearly interpolated. Extrapolation is based on the average growth rate of the other countries, weighting by their share in regional GDP. Figures for 2010 and 2011 are estimate projections based on India’s public investment trends.

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