Southeast Asian nations are in talks to establish a fund to channel their massive currency reserves to finance the much-needed infrastructure projects in the region, finance ministers said Wednesday.

Thai Finance Minister Korn Chatikavanij said the topic will be discussed among finance ministers from the Association of Southeast Asian Nations (ASEAN) and ranking officials from the regional multilateral development lender at the on-going 17th Asia-Pacific Economic Cooperation (APEC) Leaders' Week meetings in Singapore.

He said ASEAN ministers are still discussing the structure of the fund and have yet to decide on its scale. And the Asian Development Bank (ADB) is initially eyed to provide financial backing and credit enhancement -- critical elements to make the fund work.

Indonesian Finance Minister Sri Mulyani Indrawati also confirmed the talks and said such a move is very "logical" as the Southeast Asian nations can now invest their excessive savings into the infrastructure projects at home rather than buying US Treasury bills, which is blamed for causing the global imbalance that created conditions for the current financial crisis.

She said the idea of a regional infrastructure fund is not new but the global recession has accelerated the setup process.

Attending an investment summit with some of the ASEAN finance ministers on the sidelines of the APEC meetings, ADB President Haruhiko Kuroda said the infrastructure requirement in Asia could soar to a staggering US$750 billion a year by 2020. And the huge gap in infrastructure financing needs an active participation of the private sector.

Kuroda said private investment accounts for only 20 percent of the region's infrastructure financing.

In an earlier speech delivered at the summit, Singapore's Finance Minister Tharman Shanmugaratnam said the increase in current-account surpluses in most Asian economies earlier in this decade largely reflected a decline in investment rates, except China, after the 1997-1998 Asian financial crisis.

"Investment rates have not recovered since then," he said.

The 10-member ASEAN includes seven APEC members -- Singapore, Thailand, Malaysia, Indonesia, the Philippines, Brunei, Vietnam --and Cambodia, Myanmar and the Laos. It remains unclear whether the establishment of the ASEAN Infrastructure Fund would involve the group's regional strategic partners -- China, Japan and South Korea.

Beijing announced in April it would set up a US$10-billion "China-ASEAN Fund on Investment Cooperation" to support infrastructure development in Southeast Asia.

(Xinhua News Agency November 12, 2009)