The Asian Development Bank (ADB) has called on Asian economies to strengthen their infrastructure investment through an effective financing framework to achieve higher and more sustainable growth.

To that end, the bank said that as much as US$750 billion would have to be invested annually in infrastructure across the region from 2010 to 2020. This means that around US$8.25 trillion would be invested in that period in national and cross-regional infrastructure projects.

"In view of Asia's enormous untapped economic potential and the global financial crisis, now is the time to build efficient and seamless connections across Asia and with the rest of the world for a more competitive, prosperous and integrated region," said Masahiro Kawai, dean and CEO of the ADB Institute.

To meet the financing needs, the region could build an effective framework to mobilize its vast domestic savings as the main source, while encouraging private financing and participation involving public-private partnerships through "bankable" projects, said Kawai.

He also suggested the strengthening of national and regional local currency bond markets, notably through the Chiang Mai Initiative, the Association of Southeast Asian Nations + 3 bond market initiative, and the Asian Bond Fund.

An "Asian Infrastructure Fund" is being considered to mobilize international public and private funds to support regional projects, and a "Pan-Asian Infrastructure Forum" will be established to coordinate and integrate existing sub-regional infrastructure initiatives, said ADB officials.

The infrastructure investment would buoy regional economic growth and every country would benefit from it, said Klaus Gerhaeusser, director-general of the ADB's East Asia department.

The required infrastructure investment for pan-Asian connectivity in the transport, communications and energy sectors in the next 10 years is expected to produce income gains of about US$13 trillion throughout Asia.

"Although Asia has demonstrated resilient economic growth, infrastructure in the region remains underdeveloped, blocking further national and regional growth as well as further Asian economic integration," said Wu Jinkang, deputy director-general of the international department of China's Ministry of Finance.

Road network coverage in Asia is between 1 and 1.9 kilometers per square kilometers, against 3.3 kilometers in Latin America, and more than 1 billion people are yet to have access to electricity.

Wu advised countries to boost their cooperation in major areas like transportation and energy.

However, some obstacles exist, said Feng Chunping, deputy general manager of the economic research department of the Export-Import Bank of China.

"Fiscal investment won't be sufficient as debt concerns rise and liquidity tightens.

"Governments need to attract as much private capital as possible by making projects more bankable," he said, adding the new multilateral infrastructure financing needs to be based on public-private partnerships instead of a public institutions in order to mobilize private funds.

(China Daily May 29, 2010)