YOKOHAMA, JAPAN, Nov 7, 2010 (Washington Bangla Radio) Asia must be creative in finding ways to tap its multi-trillion dollar
savings and to mobilize private sector support for new infrastructure
needed to sustain growth in the coming years, said Asian Development
Bank (ADB) President Haruhiko Kuroda.
challenge for developing Asia is one of the most daunting we face today.
We must work diligently to be innovative, yet financially responsible,
in mobilizing Asian savings to deliver successful, sustainable and
robust infrastructure projects," Mr. Kuroda told delegates at the
Infrastructure Finance Forum. The event, jointly sponsored by ADB, the
APEC Business Advisory Council and Japan Bank for International
Cooperation, is being held in Yokohama, Japan today.
domestic savings in emerging Asia reached close to $4 trillion in 2009.
Much of this large cash pile has been underutilized, with regulatory
obstacles, currency mismatches and underdeveloped capital markets
hindering broader financing of essential infrastructure. The needs are
immense with ADB calculating that about $8 trillion in new
infrastructure investments will be required in the region through to
2020 to support current levels of economic growth.
infrastructure needs, energy and electricity will take up 40% of the
total, followed by transport at about 25%. Social infrastructure for
education, health, water and sanitation, and other public goods will
account for another 25%. The balance will be mainly investments in
infrastructure for telecommunications.
With the public sector
unable to meet the immense costs on its own, public-private partnerships
are essential, and governments should look to strengthen existing legal
and regulatory frameworks to attract more private investors and finance
from funds and institutional investors.
"Infrastructure funds and
local institutional investors, like pension and provident funds, can
channel Asian savings to help finance public-private infrastructure
projects," said Mr. Kuroda.
Further development of domestic
capital markets and more local currency lending will also help address
currency mismatches which are a deterrent to investors in the sector.
agencies are central to expanded investment, and here ADB is actively
engaged through activities such as the ASEAN+3 Asian Bond Markets
Initiative which is working to deepen domestic capital markets and
promote local currency bond issues, and a pilot Credit Guarantee and
Investment Facility, which is expected to be operational next year
within ASEAN+3 countries.
ADB also works closely with development
partners on initiatives such as the Asia Infrastructure Project
Development Company which aims to attract private investors to the water
sector in the People's Republic of China, and the Cities Development
Initiative which invests in public transport, methane capture, energy
efficiency and eco-industrial estates and systems around the region.
infrastructure-related investments are expected to exceed $8 billion
annually - or about two-thirds of all its lending - over the next 10