ASEAN businessmen suggest establishment of regional development

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)