5 Key Transport Challenges Facing Developing Countries and What to Do About Them

By Nicolas Peltier-Thiberge and Rogier van den Berg

Transportation is a crucial enabler of economic development, providing people access to markets, employment, education, and health services. In addition to these development benefits, improving transport systems by making them cleaner, safer, more inclusive and more resilient accelerates climate action locally and globally. But despite transport’s relevance to major development objectives, significant gaps remain that hinder progress and the positive impact that better transportation can have on poverty reduction, economic growth, and climate goals.

Developing country governments, city governments, multilateral development banks, and the private sector must all work together to advance more sustainable transport solutions in the developing world. This requires addressing the following five key transport challenges facing developing countries.

Challenge #1: Addressing the negative consequences that unsustainable transportation can have on climate, air pollution, and road safety.

Transport contributes about a quarter of the world’s CO2 emissions. Meanwhile, every year, complications from air pollution claim more than 7 million lives and road crashes take another 1.3 million. To make progress on broad-based sustainable development, countries must find ways to lower emissions from transport that also improve access to economic opportunities.

Solution: Take action to avoid excessive travel demand, shift to sustainable modes, and improve efficiency.

There are many ways countries can apply this framework to reduce emissions and promote better mobility. Enhancing public transport is perhaps the single most powerful way to simultaneously improve mobility while limiting carbon emissions and pollution. Improving the quality and reach of public transit networks, and linking them with efforts to safely enable walking and cycling in well-planned cities, can bring additional benefits. New technologies – such as electric mobility – are now within reach for many developing countries. Governments can support the use of electric buses, bikes and rickshaws with investments in charging infrastructure and creative financing options to make electric versions affordable.

Challenge #2: Climate-proofing transport infrastructure.

Complex, interlinked transport systems make our world work, but they are highly vulnerable to natural and man-made disasters. Transport is often a casualty of today’s volatile world marked by unpredictable climate disasters, pandemic, and human-made crises. As the risks from climate change escalate, countries need to prepare for rising transport infrastructure costs. For instance, World Bank research estimates that the cost of road maintenance in Africa will increase by 270% in the coming decades as a result of climate change.

Solution: Build with an eye to resilience and adaptation.

Unfortunately, living through crises appears to be a new normal for many people, especially those in developing countries. As a global community, we need to be more resilient, and transport investments are no exception. Physical infrastructure needs to stand strong when disaster strikes. When governments build with the future in mind, they can save significantly by avoiding a rebuild or retrofit later on. This applies to many areas, including improved emergency preparedness, creating redundancies in logistics networks, and ensuring sound asset management, such as road maintenance.

Challenge #3: The world’s logistics systems are struggling to keep up with the times

COVID-19 made the fragility of the world’s logistics systems shockingly obvious. Volatile energy prices, bottlenecks at key ports, and geopolitical conflict had ripple effects throughout the globe, creating shortages of food and other critical goods.

Solution: Modernize logistics networks, processes and policies to ensure efficient and reliable global distribution of goods and services.

More than four-fifths of global merchandise trade by volume is carried by sea, and container trade has been growing at a faster rate than global GDP itself. Addressing the maritime sector is crucial for any significant transformation of global logistics. Digitizing port processes is paramount to streamlining operations, enabling real-time tracking and facilitating the exchange of data between shipping lines, port services, cargo handling operations, and clearing agencies with other transport networks. Governments also need to pursue policy reforms in several areas. Improving the investment climate would help generate the private investment needed to fund infrastructure projects at ports and beyond. And reforms to state-owned enterprises are necessary to enhance competitiveness in the market and lower costs. Finally, to defend against future fuel price volatility, logistics companies can also start preparing for a transition to more sustainable fuels, such as hydrogen, to power ships and planes.

Challenge #4: The world needs new ideas and new ways of integrating transport modes.

Cities are growing – 2.5 billion people will be added to urban areas by 2050, most of them in low- and middle-income countries. Governments need to ensure their transport systems keep up.

Solution: Advance technology and data that support systems change.

Advances in technology are bringing solutions such as alternative fuels, advanced battery technology, open public transport data, real-time air quality sensors, and the power of connecting multiple modes of transport with data and AI. Such integration can unlock transformative change in people’s travel behaviors. These tools all point to a promising future for transport, but only if they are accessible to everyone. Decision-makers need access to the latest tools to advance a future of data-informed policymaking everywhere. Improving technical capacity and governance will help the thousands of fast-growing small- and middle-sized cities use technology more effectively to create integrated transport systems and enable seamless connectivity between different modes for all users.

Challenge #5: Financing sustainable transport.

Traditionally, governments have funded large infrastructure systems, but public budgets are stretched thin. Government debt is at an all-time high and more than half of developing countries are on the verge of debt distress.

Solution: Engage private investors to bridge the gap.

Achieving the investment levels necessary to create modern, efficient, safe transport systems requires the involvement of many stakeholders beyond governments – especially the private sector. The funds exist: in 2021, the world’s 500 largest asset managers had a record $119 trillion in assets under management. But global uncertainty has created high levels of risk that deters private participation in infrastructure projects. This is where the World Bank and other development banks play an important role in creating innovative financing structures to help projects get off the ground. In tandem, WRI and other stakeholders can provide research, analytics, and convening. By combining concessional finance, public-private partnerships, and other risk-mitigating instruments, such as guarantees, development banks can work with national governments and cities to spur more private investors to support the necessary changes to transport infrastructure and vehicle fleets.

The transport challenges facing developing countries are enormous, but so are the opportunities to do things differently in ways that are better for people and the planet. The program at the 2023 edition of Transforming Transportation, the premier global conference dedicated to emerging transport solutions for developing countries, aims to advance resilient transport and sustainable development worldwide.