ADB and Regional Infrastructure Development ADB Transport Forum SPS 7: Regional Cooperation and Integration Jin W. Cyhn Office of Regional Economic Integration Asian Development Bank May 2010
Structure of Presentation Asia s infrastructure requirements (emphasis on transport, but other sectors covered as well) Recent activities of ADB Main issues, challenges and opportunities Future plans of ADB Summary and conclusions
1. Asia s s Infrastructure Requirements (Part 1) Region s s Infrastructure Stock km of Roads 400 300 200 100 0 Roads per 100km 2 of Land 1996 2005 NE Asia C Asia S Asia Others OECD World Percentage 50 40 30 20 10 0 Infrastructure Quality: Asia Compared to the US 1991 2000 2005 Source: Infrastructure for a Seamless Asia (2009) Source: Institutions for Regionalism (2010) NE Asia SE Asia S Asia C Asia All Asia Index Score 4 3 2 1 0 LPI Comparison 2009 Data NE Asia SE Asia S Asia C Asia Pacific EU N America Source: World Bank Logistics Performance Index Progress has been made, but Asia is still behind the developed countries Disparities within Asia are an important issue
1. Asia s s Infrastructure Requirements (Part 2) Resource Requirements US $ Billions 100 50 0 ASEAN Investment Requirements Maintenance New Capacity Source: ADBI Working Paper #138 (2009) Power Transport Water Telecomm US $ Billions 100 80 60 40 20 0 Private Investments to Emerging Asia 1995 1997 1998 2003 2007 2008 Source: World Bank PPI Index ASEAN requires about $500 billion in the next 10 years Infrastructure for a Seamless Asia indicates investment needs of $8 trillion during 2010-2020 2020 Private investments are important for Asia, but they are largely determined by global financial conditions
1. Asia s s Infrastructure Requirements (Part 3) Opportunities for the Region Number of Agreements 101 76 51 26 1 Bilteral Trade Agreements 13 Source: ADB ARIC Database 1 Intra-Subregional Extra-Regional 13 31 44 2000 2010 95 Inter-Subregional 27% 7% Share of World Trade: 2009 4% 5% Source: WTO Database 13% 4% 40% N.A. L.A. EUR CIS AF ME ASIA Top 50 Bilateral Trade Routes in Asia (2008) Importance of market access for efficiency and competitiveness Legends: Intra- Subregional Inter- Subregional Source: ADB ARIC Database AUST 43% of top 50 trades in Asia: inter-subregional
2. ADB s s Activities (Part 1) ADB s s Lending Operations (Projections) US $ Millions $10,000 $8,000 $6,000 $4,000 $2,000 ADB Lending for Infrastructure $0 '06-'08 Source: ADB WPBF (2009) '09-'11 2012 Annual Average/Projections Subregional Breakdown of Regional Infrastructure Lending 28% 2% 4% 46% C Asia S Asia E Asia SE Asia Pacific US $ Millions $6,000 $4,000 $2,000 $0 ADB Lending for Regional Infrastructure Source: ADB WPBF (2009) 2006-08 2010-12 Annual Average/Projections Significant growth in infrastructure lending, especially for regional infrastructure projects 20% Source: ADB WPBF (2009)
2. ADB s s Activities (Part 2) Financing Initiatives and Knowledge Products Financing Initiatives Asia Infrastructure Financing Initiative with the Republic of Korea and IsDB in 2008 ASEAN Infrastructure Fund (in preparation) Additional cofinancing (±$3b( targeted for 2010: WPBF) Knowledge Products Focusing on Regional Cooperation Emerging Asian Regionalism (2008) Pan-Asian Integration (2009) Infrastructure for a Seamless Asia (2009) Institutions for Regionalism (2010)
3. Major Issues and Challenges (Part 1) Need for Coordination Common understanding on infrastructure development as a regional challenge Mechanism for coordination among the stakeholders: knowledge, understanding of key issues, database, project identification and preparation, harmonization of regulations,, capacity development, and funding Comparison with other regions: Europe Latin America Central America Trans-European Networks (Cohesion Fund) Initiative for Integration of Regional South American Infrastructure Mesoamerican Development and Integration Project $35 B $10 B $7 B
3. Major Issues and Challenges (Part 2) Need for Additional Financing No quick solution. Rather, a series of actions are required: Support from donor agencies Spending by the governments (fiscal resources) PPP projects (with donor / public support) Mobilization of other o sources as such pension funds, foreign reserves, etc. Domestic capital market development ADB / ASEAN+3: Credit Guarantee Investment Fund Connecting those with finance but without projects with those with projects but without finance
4. ADB s s Recent Initiatives (Part 1) A Quick Summary Financing Support Development of the AIF, CGIF, and other measures Additional ADB lending and catalyzing resources Knowledge Support Publication of Institutions for Regionalism Implementation of Infrastructure for a Seamless Asia recommendations Operational Support Sustainable Transport Initiative: Operational Plan (RCI: Trade and Transport Linkages) Replenishment of Regional Cooperation and Integration Fund (project development facility)
4. ADB s s Recent Initiatives (Part 2) Region-Wide Project Pipeline Asian Highway (AH) / Trans-Asia Asian Railway (TAR): : almost 250,000 km Connecting all major cities, capitals, and commercial areas Actively promoted by UNESCAP ADB has been a major financier of AH: almost $18 billion for 17% of the road network A new RETA with UNESCAP for AH and TAR: : updating of databases, prioritization of projects, and identification of possible financing
4. ADB s s Recent Initiatives (Part 3) Ideas for Pan-Asia Infrastructure Forum Coordinating Institutions ADB & Development Partners (Donors) Forum for information and knowledge Civil Society Consensus from local Communities Environmental and social safeguards Regional Infrastructure Development: Need for a Coordinated Approach Private Sector Increase of private financing through support from the public sector Not only effective investments, but also management Asian Governments Recognition of regional implications of infrastructure Harmonization of national and regional policies Donor Agencies Provision of resources and technical support Facilitation ion of the process as honest brokers Research Institutes Support for capacity development and knowledge dissemination Creation and maintenance of databased atabases
5. Summary and Conclusions Infrastructure Requirements Despite progress, still inadequate level of infrastructure stock Huge investment needs coupled with declining private investments Need for supporting the expanding trade in Asia-Pacific Major Issues and Challenges Need for coordination and resource mobilization ADB s s Activities Lending and non-lending support for DMCs Operational and financing initiatives Partnerships with UNESCAP, and call for active coordination
References & Contact Information ADB / ADBI Documents Available in the Internet ADB s s Strategy 2020: http://www.adb.org/strategy2020/ ADB / ADBI Infrastructure for a Seamless Asia : http://www.adbi.org/book/2009/09/15/3322.infrastructure.seamless.asia/.asia/ ADB Infrastructure Development per Sector / Climate Change http://www.adb.org/climate-change/default.asp Change/default.asp http://www.adb.org/clean-energy/default.asp http://www.adb.org/water/default.asp http://www.adb.org/transport/default.asp ADB Regional Cooperation http://www.adb.org/regionalcooperation/default.asp Contact Information: Jin W. Cyhn Asian Development Bank 6 ADB Avenue, Mandaluyong City, 0401 MM P.O. Box 789, 0980 Manila, Philippines Tel (632) 632-5441 / 632-6154 6154 Fax (632) 636-2183 E-Mail: jcyhn@adb.org