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SOURCE Boao Forum
Support Grows for Chinese President's Proposal for an Asian Infrastructure Investment Bank
BALI, Indonesia, Oct. 4, 2013 /PRNewswire/ -- While the Asia-Pacific does not lack for capital, the region needs platforms to raise funds for financing infrastructure projects, said government, business and academic leaders gathered in a seminar organized jointly by the Pacific Economic Cooperation Council (PECC) and the Boao Forum for Asia in advance of the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting that is to start here on 7 October.
The Asian Development Bank (ADB) has estimated that Asia needs to invest US$8 trillion in infrastructure to avoid bottlenecks and to maintain the momentum for growth. At the seminar, many participants recognized that, while there is no lack of capital in the region, bankable infrastructure projects are few for various reasons including low returns, poor governance and the lack of technical expertise.
"A fundamental barrier within our region is a lack of willingness for governments to provide strong subsidy in some countries, there are limits of fund that government can provide to infrastructures," Mr. Mark Rathbone, Asia Pacific Leader of Capital Projects and Infrastructure of PricewaterhouseCoopers said.
To address the obstacles to infrastructure development, Chinese President Xi Jinping is proposing a regional solution. In his 2 October bilateral meeting with Indonesian counterpart Susilo Bambang Yudhoyono and in an address to the Indonesian parliament today, President Xi said China would support the creation of an Asian infrastructure investment bank to provide financial support for infrastructure development in developing economies in the region.
At the seminar, President Xi's proposal received strong support. "The Asia infrastructure Investment Bank will hopefully lead to multilaterial government participation to facilitate the infrastructure investment," Mr. Fang Fang, Asia Vice-Chairman of J.P. Morgan commented. "It is very important to turn Asia's high savings rate into investment. China is serious about the financing solution for infrastructure in Asia," Mr. Zheng Xinli, Permanent Vice Chairman of the China Center for International Economic Exchanges, told participants. "I hope that the example and lessons that China has learnt in providing excellent infrastructure for its economy in past 20 or 30 years can indeed be transferred into this infrastructure investment bank," Mr. Conor McCoole, Managing Director and Head of Project Finance of Standard Chartered Bank said. "The proposal of China to initiate the Infrastructure Investment Bank is very exciting," Mr. Steve Howard, Secretary-General of the Global Foundation of Australia said, "The message I hear from the panel and floor that this bank can do much more than just to provide finance, but can be a major provider in integrator of know-how."
While welcoming the initiative, others said that fundraising was not the only issue. There should be focus on the project preparation stage. "We need resources for good project development – such as funds for feasibility studies and procurement and draft contracts, which are expensive," noted infrastructure and public-private partnership specialist Laila Horton.
"Infrastructure building generates jobs, fuels growth and lays the foundation for structural reforms," commented Ambassador Zhou Wenzhong, Secretary General of the Boao Forum for Asia, emphasizing that smarter and broader cross-border cooperation and more innovative approaches to planning and financing infrastructure projects are needed. Concluded Djisman Simandjuntak, Chair of the CSIS Foundation and of the Indonesia PECC Committee: "Nothing moves without finance."
About the Pacific Economic Cooperation Council
The Pacific Economic Cooperation Council (PECC) is a non-profit international organization committed to the promotion of cooperation and dialogue in the Asia Pacific. Founded in 1980, PECC is a tripartite network of 26 member committees comprising individuals and institutions dedicated to this shared mission. Of the 26 member committees, 23 represent the economies of Australia, Brunei Darussalam, Canada, Chile, China, Colombia, Ecuador, Hong Kong (China), Indonesia, Japan, Korea, Malaysia, Mexico, Mongolia, New Zealand, the Pacific Islands Forum, Peru, the Philippines, Singapore, Chinese Taipei, Thailand, the United States of America, and Vietnam. The PECC also has one associate member, France (Pacific Territories), and two institutional members, the Pacific Trade and Development Conference and the Pacific Basin Economic Council. As the only non-governmental official observer of APEC (Asia-Pacific Economic Cooperation), PECC provides independent business and research input for the regional policy-making process. www.pecc.org
About the Boao Forum for Asia
As a non-government, non-profit international organization, Boao Forum For Asia (BFA) is the most prestigious and premier forum for leaders in government, business and academia in Asia and other continents to share visions on the most pressing issues in this dynamic region and the world at large. The Forum is committed to promoting regional economic integration and bringing Asian countries even closer to their development goals. Initiated in 1998 by Fidel V. Ramos, former President of the Philippines, Bob Hawke, former Prime Minister of Australia, and Morihiro Hosokawa, former Prime Minister of Japan, Boao Forum for Asia was formally inaugurated in February 2001. Countries across the region have responded with strong support and great enthusiasm, and the world has listened attentively to the voice coming from a tiny, quiet and scenic island at the southernmost part of China – Boao, the permanent site of the Annual Conference of the Forum since 2002.
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