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..Press
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UNESCAP News Services
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Date 17
May 2005
Press Release No: G/CS61/09/2005
61ST COMMISSION SESSION
UNESCAP HEAD WARNS OF CRIPPLING COSTS
OF ASIA-PACIFIC INFRASTRUCTURE
BANGKOK (United Nations Information Services)
- The Asia-Pacific region’s infrastructure needs are overwhelming,
both in social and physical infrastructure, UNESCAP's Executive
Secretary Mr. Kim Hak-Su warned delegates of the Ministerial
Segment of the 61st Commission Session of the United Nations
Economic and Social Commission for Asia and the Pacific (UNESCAP).
The 61st Commission session aims to find ways
to create financing for development.
According to a recent study by World Bank, ADB
and Japan Bank for International Co-operation, the region needs
more than $200 billion per year, which far exceeds the available
resources of around $50 billion for all purposes. Private investment
in infrastructure is one-fourth of the levels prevailing before
the 1997 crisis. This has created a large financing gap.
UNESCAP investment estimates for desperately needed
infrastructure are massive.
For the Asian Highway, an additional $18 billion will be required
just to finance priority projects. The Trans Asian Railway would
also need substantial investment. For example, one route from
Singapore to Kunming will cost $2.5 billion.
The costs of regional connectivity infrastructure
such as Internet connections, cabling and broadband are also
substantial.
The gap is exacerbated by a decline of private
investment for infrastructure since the Asian Financial Crisis
in 1997. East Asia private infrastructure investment declined
from $40 billion in 1997 to $11.5 billion in 2003.
The region faces major challenges in securing funding for infrastructure.
“We must mobilize regional domestic savings and further
engage the private sector in infrastructure investment,”
said Mr. Kim.
“At this stage of transformation, Asia and
the Pacific region requires an institution like the European
Investment Bank (EIB) - an independent, government-owned Asian
Investment Bank to promote regional capital markets,”
he said.
Mr. Kim said an AIB could provide infrastructure
loans and collaborate with the banking community in both raising
and investing resources. “The AIB could work with private
sector by co-financing and guaranteeing private investment financing.
Asian capital markets are faced with limited capacity to finance
large and risky infrastructure project and we need an alternative.”
Regional investment in other countries in the
region is also increasing. The region receives foreign direct
investment of over US$100 billion a year, but concentrated in
a dozen countries led by China; Hong Kong, China; Singapore;
Republic of Korea and India. The outward flow of FDI from countries
in the region is also rising. In 2003, the outward flow of FDI
by Singapore was $5.5bn in 2003, followed by the Republic of
Korea at $3.4bn.
UNESCAP aims to help channel FDI to the region’s
poorer countries. It also aims to stimulate intra-regional trade
that also benefits poorer countries.
“We must harmonize bilateral trading arrangements
(BTAs), and Free trade Agreements (FTAs) with multilateral trading
arrangements,” Mr. Kim said. “The Asia-Pacific Trade
Agreement (APTA) addresses these issues,” he said.
UNESCAP would assist the region achieve its infrastructure
goals with a three-track strategy of promoting technical cooperation
in finance, trade and investment; forging greater cooperation
among sub- regional groupings to achieve integration and creating
a Knowledge Management Centre to share experiences of Financing
for Development.
The Session will conclude on 18 May with the adoption
of a report containing resolutions and a summary of the discussions.
NOTE TO EDITORS
Please kindly be reminded that there will be a
Press Briefing of the conclusion of the 61st Commission Session
by Mr. Kim Hak-Su, Executive Secretary of UNESCAP, and the Conference
Chairman, H.E. Mr. Kassymzhomart Tokayev, Foreign Minister of
Kazakhstan, on Wednesday, 18 May at 11:00 to 12:00 am at the
UNCC Theatre. All media representatives are cordially invited
to attend.
For further information please contact:
Mr. David Lazarus
UN Information Services Bangkok
Tel: +(66-2) 288-1861-69, Fax: +(66-2) 288-1052
E-mail: unisbkk.unescap@un.org
http://www.unescap.org/
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