Meeting proposes forum to boost infrastructure
Meeting proposes forum to boost infrastructure
JAKARTA (JP): The five-day World Infrastructure Forum-Asia
1994 concluded here yesterday with an agreement to form a
communication forum to boost infrastructure development in Asia.
Chairman of the closing ceremony M. Rahmatullah said the
forum, called the Asian Infrastructure Development Align (AIDA),
will be designed to find ways of financing infrastructure
development in Asia.
"The AIDA is to follow up the results of this symposium and to
help countries in Asia with their infrastructure development," he
said after the closing session.
Rahmatullah, director of the Transport, Communications and
Tourism Division at the United Nations, noted that the forum will
also promote cooperation among the governments, the private
sectors and multilateral financial institutions in Asia.
Both President Soeharto and Philippine President Fidel Ramos
acknowledged that cooperation among the three magnitudes is
sorely needed to construct infrastructure in the developing
world.
"Building infrastructure needs effective alliances and
partnerships among the governments, private sectors and
multilateral institutions. This is the gate for achievement of
future progress," Ramos said on the second day of the conference.
Among the three, the governments turn out to be the strongest
bidders in the infrastructure development. Thus, the forum calls
on governments to ease investment procedures so that the private
sectors will be encouraged to take part.
Asian countries are expected to focus their energy on building
a dynamic economy through rapid infrastructure development.
"Infrastructure represents, if not the engine, the will of
economic activities."
Spending
Asian countries are forecast to spend some US$2.5 trillion to
build infrastructure projects in the continent by the year 2000.
To anticipate the high spending on infrastructure, the Asian
Development Bank (ADB) is assigned to raise $1 trillion or more.
John Taylor, director of the Private Sector Department at the
ADB, said yesterday that every country is encouraged to raise
funds through capital markets since international financial
institutions cannot provide all the funds needed for all
infrastructure projects.
"Through capital markets, governments can generate local
resources effectively for their infrastructure development,"
Taylor noted.
Meanwhile, Greg Ingram, a World Bank expert on infrastructure,
suggested that governments should be careful in offering
incentives to attract private investment, especially if the
incentives are given in the form of risk guarantees.
"Guarantees need to be analyzed with care to ensure that the
entity which has the most control over the risk should bear the
risk," Ingram said yesterday.
He noted that governments should normally provide guarantees
for policy risks or exchange rate risks, while service providers
should carry commercial risks.
When asked, Ingram declined to comment on the deal between the
Indonesian government and Esso Natuna Inc., an affiliate of the
U.S. Exxon Corp., on a multi-billion dollar natural gas
liquefaction project in Natuna of Riau, in which the Esso
insisted that the government share the environmental risks
whenever there is an explosion at the gas plant.
"It's clear enough, however, that the one who has the most
control over the risks should bear the risks." (rid)