VIENTIANE – Asean needs about US$3.4 trillion during 2013-2030 to finance infrastructure projects so that the region can narrow its development gap and achieve its objective of becoming a single market and production base, according to a senior World Bank official.
The bank’s Vice President for East Asia and the Pacific, Victoria Kwakwa, disclosed this projection recently, according to the regional online publication Asean Post.
Despite increased efforts by the governments in the region to mobilize investment funds from multiple sources over the past few years, the region still faces shortage of funds to meet the demands of regional infrastructure development in upcoming years.
Based on this finding, the publication suggested that it is still unclear whether the region will be able to achieve its infrastructure fund mobilization target in 2030. In addition, it recommended that there is still room for Asean development partners and major global financial institutions to invest in the region’s infrastructure.
China has been aware of the increasing demand for funds for infrastructure development. It is currently providing funds for Laos to build high speed railway line from the Laos-China border to the capital Vientiane. The link is a part of China’s ambition to connect its southern city of Kunming to Singapore.
Observers said transport, energy and IT connectivity is one of the key issues that Asean has to address in upcoming years. This recommendation is based on the fact that old Asean member countries have access to modern infrastructure while new member states lack such infrastructure.
Access to reliable and affordable infrastructure is important for any economy to facilitate job creation and promote sustainable development in the long run. In addition, the development of such infrastructure will help the region to reduce poverty, according to the online publication which quoted Kwakwa.
According to the Asean Post, since its inception on August 8, 1967, the grouping has made tremendous strides in promoting peace and stability in the region. This is carried out through abiding to the rule of law and adherence to the principles of the United Nations Charter, which allows for all member states to subscribe to its respective aims, principles and purposes under the banner of a united regional association.
Regional gross domestic product (GDP) has more than doubled from US$1.3 trillion in 2007 to US$2.8 trillion in 2017 within the span of a decade. Asean is the seventh largest economy in the world and is projected to make the jump to the fourth spot in 2050.
The creation and implementation of the Asean Economic Community in 2015 was a crucial initiative to integrate the 10 member countries as a single market and production base, with investments, services, free movement of goods, skilled labor and flow of capital among its key underpinnings, the Asean Post said.