..Press Release................................ UNESCAP News Services

Date 13 February 2006
Press Release No: G/04/2006

INDIA TO FUND STUDY ON ASIA-PACIFIC INFRASTRUCTURE FINANCING OPTIONS

State visit highlights India’s emerging leadership role

BANGKOK (United Nations Information Services Bangkok) – The Ministry of Commerce and Industry, Government of India, agreed on 10 February to fund a study covering financing instruments and institutions for infrastructure development in the Asia-Pacific region.

UNESCAP Executive Secretary Mr. Kim Hak-Su and Mr. Jairam Ramesh, Hon’ble Minister of State for Commerce, Government of India, agreed that the Indian Council for Research on International Economic Relations (ICRIER) and the Research and Information System for Developing Countries (RIS), both of New Delhi, would jointly carry out a study on alternative models for infrastructure financing for Asia and the Pacific. The two think tanks may collaborate with institutions in other countries.

“Why wait for others to do the study? Why can’t India take the leadership role?” Minister Ramesh asked.

Mr. Kim told the Hon’ble Minister that he was encouraged by India’s positive response to solving the problem of infrastructure financing in Asia and the Pacific. “India’s contribution will significantly brighten the prospects of finding a long-term solution to the Asia-Pacific region’s vast infrastructure investment needs,” Mr. Kim said.

According to UNESCAP, the resource requirement for infrastructure investment in the region is very large. It has estimated that in four major infrastructure sectors, namely transport, ICT, energy, and water, the requirement could be anywhere between US$220 billion (estimate based on infrastructure demand model studies of the World Bank, ADB, and JBIC) and over US$500 billion per year (estimate based on sectoral projects).

Of this large requirement, UNESCAP further estimates that under a ‘business as usual’ scenario, the total resources available for infrastructure investment could be US$48 billion per year from Government budgets and private investors, including US$7.4 billion per year for infrastructure investment provided by ADB, World Bank, and JBIC. This leaves a resource gap of US$180 billion per year at the minimum.

The Hon’ble Minister of State for Commerce also added that “Natural disaster management, disaster forecasting, and early warning systems are issues that naturally come as areas for collaboration between India and UNESCAP. These cannot be responsibilities of individual countries.”

During his four-day State visit to India, 8-12 February, Mr. Kim met with a number of Ministers and senior Government officials. He also gave the keynote address at the opening ceremony on 10 February at the WFUNA 2nd Asia-Pacific Model UN Conference.

On 10 February, Mr. Kim called on Mr. Pavan Kumar Bansal, Hon’ble Minister of State for Finance, Government of India, and discussed with him important issues related to UNESCAP/India cooperation. The Hon’ble Minister assured Mr. Kim of his highest consideration on proposals for the creation of a UNESCAP-India cooperation fund, and on proposals relating to infrastructure development in Asia and the Pacific. The Hon’ble Minister also expressed his hope that cooperation between India and UNESCAP would flourish in the immediate future.

Later in the afternoon Mr. Kim called on Mr. Kamal Nath, Hon’ble Minister for Commerce and Industry, Government of India, where they reviewed the outcomes of the meetings that Mr. Kim had held with the Hon’ble Ministers and agreed on a future course of action. “India is reaching out to the world and the world is reaching out to India. But India still has 300 million people who live on one dollar a day income. There is a need for greater collaboration between India and other international organizations like UNESCAP in fighting poverty,” Minister Nath told Mr. Kim.

Mr. Kim also met with Mr. Ashok Jha, Secretary, Economic Affairs, Ministry of Finance, Government of India, briefed him on the outcomes of the visit, and sought his support for strengthening UNESCAP/India cooperation. “India’s financing needs for infrastructure development would be US$160 billion over the next five years,” he said. “The steps contemplated by UNESCAP to look at financing instruments and institutions for infrastructure development are welcome.”

Dr. Montek Singh Ahluwalia, Deputy Chairman, Planning Commission of India, met with Mr. Kim on 11 February and was briefed on financing of infrastructure and a UNESCAP-India cooperation fund. Dr. Ahluwalia told him that finances are important but, “in many cases absorption capacity and policy environment also need to be fixed for development of infrastructure.”

On 9 February Mr. Kim met with Ms. Maxine Olson, United Nations Resident Coordinator, and the UN Country Team in India.

At the Model UN conference, hosted by the Indian Federation of United Nations Association (IDUNA), Mr. Kim told the young delegates that he hoped they would discuss the challenges of achieving the UN Millennium Development Goals (MDGs) in the Asia-Pacific region, and reflect on their own roles in contributing towards their fulfilment.

Mr. Kim began his visit to India by paying homage to the Father of the Nation, Mohandas Gandhi, at the Raj Ghat.

Located in Bangkok, Thailand, the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) is the largest of the UN's five Regional Commissions, in terms of population served and area covered. The only inter-governmental forum covering the entire Asia-Pacific region, it aims to promote economic activity and social progress in the developing countries of the Asian and Pacific region.

For further information please contact:
Mr. David Lazarus, Chief, United Nations Information Services Bangkok
Tel: +(66-2) 288-1861-69; Fax: +(66-2) 288-1052
E-mail: unisbkk.unescap@un.org

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