ASEAN businessmen suggest establishment of regional development bank
JAKARTA (JP): The ASEAN Business Forum, grouping business executives of the Association of Southeast Asian Nations (ASEAN) has proposed the establishment of a regional development bank.
Aburizal Bakrie, the chairman of the forum, said here yesterday that the establishment of an ASEAN development bank is essential because most of ASEAN's six member countries lack funds to finance their development projects while available world investment funds continue to decline.
Speaking at the forum's second meeting, Aburizal said most ASEAN countries -- including Brunei, Indonesia, Malaysia, Thailand, the Philippines and Singapore -- are now engaged in massive programs to develop their infrastructure facilities, especially those dealing with power supplies and telecommunication services.
The two-day meeting, participated in by the organization's 200 members, is discussing investment opportunities, global trade and infrastructure development in the region.
Aburizal, also the chairman of the Indonesian Chamber of Commerce and Industry (Kadin) and chairman of the Bakrie Group, said each ASEAN country needs hundreds of billions of dollars to develop a sound and efficient infrastructure capable of matching its rapid economic growth.
Way out
"The establishment of the ASEAN Commercial Development Bank could, therefore, become a good way out in dealing with financial constraints, as existing financial instruments will not likely be able to cope with the sharp increase in the demand for development funds," he said.
ASEAN countries cannot expect much from existing financial sources such as loans from commercial banks; and venture capital is not only expensive, but also insufficient for financing massive development programs, he explained.
"The government of each country will have to finance the bulk of these projects, but as they have numerous other priorities, they will not drain their national reserves developing the infrastructure alone," Aburizal said.
The World Bank, the Asian Development Bank and other international financial agencies are obvious sources of financing, but given the competing demand, one cannot expect too much support for any one particular country regardless of its needs, he said.
"In this context, I wonder whether we should not explore the possibility of establishing an ASEAN Commercial Development Bank as a financial option," he said.
Aburizal noted that Brunei and Singapore, the richest nations in ASEAN, could be invited to take a leading role in the planned development bank.
"Infrastructure development is imperative for ASEAN to attract foreign investors," he said. "Many foreign investors are now turning to China and Indochinese countries because ASEAN is considered marginally less attractive."(hen)