Private sector must invest $1t in infrastructure: ESCAP

Private sector must invest $1t in infrastructure: ESCAP

JAKARTA (JP): The private sector is expected to shoulder most
infrastructure development in the Asia-Pacific region, as
governments can only provide one-third of the funds required over
the next five years.

Executives from the United Nations Economic and Social
Commission for Asia and the Pacific (ESCAP) revealed here
yesterday that only a portion of the estimated US$1.5 trillion
needed for infrastructure development was readily available.

"The resources available are only $500 million," said Ravi
Sawhney, the director of ESCAP's International Trade and Economic
Cooperation Division.

Speaking after the opening of the sixth Steering Group meeting
of ESCAP's Committee for Regional Economic Cooperation, Sawhney
explained that the findings were a result of a recent study
conducted to define the infrastructure needs of the region.

Seiko Takahashi, ESCAP's acting executive secretary, also
stressed the need for private sector funds saying that the region
would "depend heavily on the private sector."

"That's where the funds are available," she said, while
explaining the need to "pinch the finances of the private
sector."

Takahashi acknowledged that such an approach is something of a
departure for many countries in the region where such development
traditionally stemmed from governments, but she underlined that
private sector participation is crucial to fill the financial
gap.

Private financing is also necessary in many places in the
region as public sector savings are insufficient to finance
infrastructure development. This would then prompt the regional
governments to borrow the required funds which would lead to an
escalating debt burden and higher inflationary pressures.

ESCAP was established in 1947 under the name of the Economic
Commission for Asia and the Far East (ECAFE) before assuming its
present name in 1974.

Headquartered in Bangkok, Thailand, ESCAP currently groups 48
member countries along with 10 associate members.

The four-day meeting of the steering group is aimed at
formulating proposals and ideas to be brought later to the 51st
ESCAP meeting in Bangkok on April 24.

One of the meeting's tasks is to continue and possibly revise
the results of a previous ESCAP meeting in New Delhi last year,
which drew up the "New Delhi Action Plan for Infrastructure
Development."

Facilities

According to ESCAP's report on the development of
infrastructure as a key to economic growth, the funds acquired
would be used to develop much needed facilities in the region
such as the construction of two million kilometers of roads.

Other infrastructure development would also include laying
over 40,000 kilometers of railway tracks, creating a 140 new
container berths and increasing the number of telephone
connection lines by 180 percent.

Apart from that, there would also be a doubling in the
capacity to generate electricity.

A two-fold approach is thus advocated. The first, as
mentioned, is to generate funds from the private sector and the
second to improve efficiency.

Though much of the onus to provide financing for
infrastructure now falls on the non-public sector, Sawhney stated
that government will now be expected to focus more on efficiency.

Apart from improved management and administration, higher
efficiency can also be accomplished by a better maintenance,
which could lead to better productivity. (mds)