REGIONAL INFRASTRUCTURE
DEVELOPMENT: OPTIONS FOR
FINANCING
International CEO Forum IV
Dr. Ravi Ratnayake
Director
Poverty and Development Division
UNESCAP
17 December 2007, Bangkok
1
Structure of the Presentation
Role of Infrastructure
Challenges
Infrastructure investment needs
Regional cooperation for
financing infrastructure
2
Infrastructure & Economic Growth
Infrastructure is key to:
Production of goods
& services
Trade & investment
Regional integration
3
Infrastructure & MDGs
Infrastructure promotes:
Sharing the benefits
of growth
Income generation
Education & Health
4
Challenges
Transport
Rural connectivity is an
issue in some countries
Water & Sanitation
Access to safe drinking
water & sanitation is low
Energy
One billion people lack
access to electricity
5
Challenges
ICT
Very visible digital divide
Natural Disasters
The Asian & Pacific region
is the most disaster-prone
region of the world
6
Infrastructure Investment Requirements
Aggregated Demand
& Limited Coverage
600
500
>600 B
400
300
200
100
228 B
Annual Needs (US$ bill.)
Sectoral Projections
& Broader Coverage
0
7
UNESCAP Estimates
(Annual Needs in US$ billion)
Energy
ICT
201 B (33.0%)
21 B (3.4%)
Telecom
Transport
224 B (36.8%)
Energy
Wat-San
Disaster
TOTAL
Transport
107 B (17.6%)
W&S
56 B (9.2%)
> 600 B
8
Financing Gap: Sectoral Distribution
UNESCAP-based Estimate
GAP: US$ 220 B / yr
WATER
US$ 66.0 B / yr
(30%)
ICT
ENERGY
US$ 60.7 B / yr
(28%)
US$ 14.4 B / yr
(7%)
DISASTER
MANAGEMENT
US$ 27.1 B / yr
(12%)
TRANSPORT
US$ 52.0 B / yr
(24%)
9
Financing Gap & Regional Resources
US$ billions
UNESCAPbased Gap
Surplus
Forex
220 B / yr
200 B / yr
>3T
10
Regional Cooperation
How to intermediate financial
resources in the region to
infrastructure investment ?
The Study puts forward four
options for regional cooperation
in financing infrastructure
development
11
Institutional Arrangements
1. Asian Development Bank
Expand its mandate:
Give higher priority to
infrastructure development
ASIAN
DEVELOPMENT
BANK
Facilitate its access to
capital markets
12
Institutional Arrangements
2. Subregional Development Banks & Funds
Operationalize, reinvigorate & consolidate
existing proposals:
North East Asian Development Bank
South Asian Development Fund
13
Institutional Arrangements
3. Asian Bond Fund
Expand its mandate to increase
geographical coverage
financial scale
14
Institutional Arrangements
4. A New Institution
New financial institution
modeled after the EIB
Raise funds from capital
markets
Provide financing &
guarantees
Assist in the identification
& evaluation of projects
15
Benefits for SMEs
Potential is high
Globally account for 50% of GDP,30% exports
60-75% of private employment
Major source of innovation and economic
and social cohesion
Growth of SMEs hampered by infrastructure
deficit
Regional development bank could take a lead in
financing the infrastructure gap
16
Thank you
United Nations
ESCAP
17