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

Date 22 March 2007
Press Release No. G/06/2007

Regional Meeting Points Way Forward to Tackle Asia-Pacific Infrastructure Gap

Proposal to establish a new regional body to raise funds

New Delhi (United Nations Information Services Bangkok) -- The Asia-Pacific region faces a serious issue of underinvestment in infrastructure. The time has come to take solutions from academic discussion to political decision-making. It is also time to consider means of setting up a regional mechanism to utilize the large amount of savings of the region for much needed investment. The appeal comes today at the end of a meeting in New Delhi. Participants included about 100 government ministers, officials, academics and private sector CEOs, representing 20 countries.

The two-day meeting, the High-level Policy Dialogue on Regional Cooperation for Infrastructure Development and Financing in Asia-Pacific, was co-organized by the UN’s regional arm, the Economic and Social Commission for Asia and the Pacific (UNESCAP), and a leading think-tank in India, Research and Information System for Developing Countries (RIS).

“This meeting is a crucial step,” says Mr. Kim Hak-Su, UN Under-Secretary-General and Executive Secretary of UNESCAP. “It shows clearly the way forward to meet one of the biggest challenges the region faces. A lack of investment in infrastructure is threatening the long-term development of Asia and the Pacific. The region needs to find a way to utilize our large amount of savings and foreign exchange reserves, to build much needed infrastructure.”

Mr. Kim praised India for its leading role in promoting a regional solution. A study commissioned by the Government of India and presented by RIS at the meeting echoes earlier research by UNESCAP. Both show that the region needs an annual investment of about $600 billion in transport, energy, water and telecommunications. But, there is a short fall of more than $200 billion annually. The region’s foreign exchange reserves meanwhile stand at $3 trillion dollars. Much of the reserves are invested outside of the region.

The meeting endorsed a RIS study proposal to set up a regional intermediary, to channel savings into infrastructure investment. It could, for example, be an Asian infrastructure investment bank or an Asian infrastructure finance corporation. The new body could be independent or be an affiliate of an existing institution, such as the Asian Development Bank. Besides raising funds, the institution could also help Asia-Pacific countries in addressing non-financial constraints which discourage infrastructure investment by the private sector. The constraints include regulatory barriers, the lengthy process of project formulation and risks associated with long-term and large-scale investment.

The meeting suggests that UNESCAP member states set up a high-level working group to consider options and make recommendations to Governments.

Among those who addressed the meeting were the Finance Minister of India, Mr. P. Chidambaram, the Minister of State for Commerce and Industry, Mr. Jairam Ramesh, and the Foreign Secretary, Mr. Shivshankar Menon. Their presence, on behalf of three ministries, demonstrated the broad political support for the initiative, Mr. Menon said, and the time was right to take action.

For further information:

Mr. Hak-Fan Lau
UN Information Services Bangkok
+(66) 2288 1866
+(66) 84 700 1147 (mobile)
Email: unisbkk.unescap@un.org

Mr. Rajiv Chandran
UN Information Centre, New Delhi
011 4653 2242
98106 06833 (mobile)
Email: chandran@unicindia.org

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Headquartered in Bangkok, UNESCAP is the largest of the UN's five Regional Commissions in terms of its membership, population served and area covered. The only inter-governmental forum covering the entire Asia-Pacific region, UNESCAP aims to promote economic and social progress. More information on UNESCAP is available from www.unescap.org