Dr. Peter Ramsauer: Mobility as key prerequisite of economic growth

Two factors are of decisive importance for the mobility of people and the smooth transport of goods: an efficient infrastruc­ture and efficient logistics. In both cate­gories Germany has a leading position in the world.

At first sight it may sound contradictory, but Germany is a country of short journeys, especially because of its long traffic routes. With an overall infrastructure of approximately 7,300 kilometres of inland waterways, more than 33,000 kilometres of railway lines and more than 230,000 kilometres of roads in Germany, one could travel more than six times around the world. The well-developed infrastructure and the closely linked transport network make it possible to go from one place to the next quickly and directly.
Our transport infrastructure is an essential prerequisite of our social life and a lively trade. A functioning mobility is not possible without an intact infrastructure. One cannot imagine a modern and highly specialised national economy based on division of labour without it. And it has multiple benefits. The infrastructure is at the same time a locational, production and employment factor and thus it guar­­antees long-term growth effects. In addition, it has an important function for the connection and development of rural regions.

Investments in the infrastructure always have a direct influence on jobs and revenues – and this applies mainly, of course, to the relevant infrastructure goods indus­­tries like the construction industry. On the other hand, the upstream industries profit indirectly from the infrastructure investments, for example when in turn the construction industry obtains raw materials and other advance services from suppliers and raw material producers. But beyond these short-term growth incentives, infrastructure investments mainly have long-term growth effects for the national economy. For the trunk roads, for example, the average cost-benefit factor is 4.7. This means: every euro that we invest in the infrastructure entails nearly five euros of economical benefit.

The German rail network consists of  more than 33,000 kilometres.

The German rail network consists of more than 33,000 kilometres.

The importance of the transport infrastructure also becomes clear in the topical study of the World Economic Forum (WEF) on global competitiveness. A total of 139 countries are compared using more than 110 indicators.
The quality of the infra­structure is one of the main criteria. Germany has moved up in the WEF ranking into the group of the five most competitive nations and in the euro area even is number one. Apart from the highly developed business culture, the pronounced competition and efficient goods markets, this gratifying result is mainly due to one factor: the infrastructure here is considered to be the second-best in the world. In order to consolidate this position, we have to master three great challenges.

First: the traffic growth. In the next few years we will see an enormous traffic growth. The forecast for Germany alone expects an increase of the traffic perform­ance of about 20 per cent in passenger transport and of even more than 70 per cent in goods transport until the year 2025 compared to 2004. We therefore have to make the infrastructure investments where they are most urgently needed and where they achieve the greatest social and economic benefit. Due to their transport hub function, the 22 international airports, the 17 major seaports and the approximately 250 inland ports are of special importance. They are Ger­many’s gateways to the world. We will continue to see to it that they are linked to the transport network in the best way possible. Here especially the development of the port-hinterland connections plays a central role in coping with the future growth in goods transport.

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Second: the funds. In Germany – as in many other states – it is necessary to consolidate the public budgets. This is due to the duty of the state not to leave excessive debts to the following generations. However, neither should we burden our children and grandchildren with debts in form of a ne­­glected infrastructure. If one day they had to make up for the neglected maintenance of our roads, railways and waterways this would burden them with much higher costs still. We therefore will not make savings at the wrong place. And we will tread new paths as regards infra­structure financ­­ing. Why shouldn’t we succeed in structuring invest­­ments in our infra­structure to be just as worthwhile business models as invest­ments in other business areas? One possible way are so-called public-private partnerships as they are already applied in the construction of federal trunk roads. This is the term used for a long-term cooperation laid down in an agreement between the public administration and the economic sector.

The func­­tions and the risks are shared. The private partners do not only build the road section, they are also responsible for maintenance and operation. This results in long-term planning security and performance incentives for them and in effi­ciency gains for the public sector as well.

Third: the limits of development. In a coun­­try which is as densely populated as Germany there are limits for the development of the infrastructure; this applies to the demands on environment and nature as well as to the acceptance by the citizens. Traffic is always connected with adverse effects – for example noise and exhaust gases. This is why low-emission propulsion systems, noise protection walls, whis­­­pering asphalt, quieter tracks and wagons and many other things are the core functions of an infrastructure policy which is people-oriented and environmentally compatible. Efficient logistics, too, can make a contribution to the acceptance of traffic.

Each euro invested in the infrastructure brings nearly five euros of economical benefits.

Each euro invested in the infrastructure brings nearly five euros of economical benefits.

Short journeys or, to say it in more general terms: to overcome the distance to the destination faster has always been a central requirement of logistics. Through global­­­isation and digital networking logistics have undergone a fundamental change. If in former times logistics meant relatively simple services, like the transport and storage of goods, today it means the management of goods flows, from acquisition and dis­tri­bu­tion log­istics over storage to additional services. In Germany logistics and goods transport are the third-largest industry. German log­­istics services are leading in the world.

To determine, develop and pool measures that strengthen Germany as a logistics location, the Federal Ministry of Trans­port, Building and Urban Devel­opment has developed, together with the industry, a Freight Transport Logistics Action Plan. A central aim is to shift the biggest-possible share of the expected traffic growth to the rail. A promising method to do this is to strengthen the so-called combined transport, that is the integration of different modes of transport into the trans­­port chain. The Federal Gov­­ern­ment has supported the construc­tion and up­­grading of the terminal infra­­struc­ture of, in the meantime, more than 70 tranship­ment installations through targeted financial assistance. In 2008, that is before the crisis of the financial markets had an im­­­pact on the real economy, goods amount­ing to approx­imately 73 million tonnes were carried in combined transport on the German rail network. This cor­­­­responds to a trans­port volume of about 12,000 lorry journeys – every day! This makes it possible to considerably relieve above all the highly frequented traffic corridors.

With all its transport policy measures, the Federal Government pursues the prime objective of making mobility possible in­­stead of preventing it. This applies to passenger transport just as much as to goods transport. And we want to use the limited funds in a targeted manner to be able to continue to trust in an efficient infrastructure network – so that Ger­many remains a country of short journeys. 

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The author is the Federal Minister of Trans­port, Building and Urban Devel­opment in the Cabinet of Federal Chan­cellor Angela Merkel. He studied economics at the Ludwig-Maxi­mi­li­ans Uni­versity of Munich and earned his PhD in business administration 1985. He was appointed into his office as deputy chair­man of his party in October 2008.