Three multilaterals review Asian infrastructure sector

A study into the drastic fall in infrastructure investment in Asia since the currency crisis of 1997 has been initiated by the region’s three major development financial institutions. It was noted that both public and private sector financing for infrastructure have fallen despite the demand for infrastructure development in the Asia-Pacific region and the strong correlation between economic development and poverty reduction.

The flagship study, entitled "Infrastructure Development in East Asia: The Way Forward," is being undertaken by the Japan Bank for International Cooperation (JBIC), the Asian Development Bank (ADB) and the World Bank, with support from the Government of Japan. This is the first joint research project undertaken by the three institutions with the goals of poverty reduction and economic development.

The core team from the three institutions met in Tokyo on mid September to finalize the objectives, scope and approach of the study.

The international donor community is striving to reduce poverty in developing countries and to achieve the United Nations’ Millennium Development Goals (MDGs).

Infrastructure, which contributes to economic growth and access to public services, is regarded as indispensable for the achievement of the MDGs. For example, a recent JBIC study in Sri Lanka underscored the positive impact of infrastructure on poverty reduction. In view of this, the development institutions believe a new framework and approach is clearly needed to address the current stagnation in infrastructure investment.

In a press statement issued by the ADB, the three broad objectives of the study are: to highlight the important role of infrastructure in reducing poverty by supporting economic growth and access to services; to provide practical guidance to senior policymakers – in countries as well as multilateral development banks and donor agencies – on how to engage in infrastructure service provision and financing; and, to support communication with decision makers and development partners, including private sector and non-government organizations (NGOs) in East Asian countries

The study will cover all developing countries of East Asia and the Pacific region. Sectoral coverage will focus on economic infrastructure, especially power and piped gas, transport and communications, and water supply and sanitation in both urban and rural areas. The transport sector will include roads, railways, airports and ports.

Key themes will include the recent history of infrastructure provision in East Asia; the region’s experience with private participation in infrastructure; the impact of decentralization and urbanization on infrastructure demand and provision; and the contribution of infrastructure to regional competitiveness and integration.

Other major topics will include ways to address environmental and health concerns; an assessment of infrastructure requirements; the roles of public and private actors in infrastructure planning, financing, management and service provision; the challenge of regulating infrastructure providers, public or private; sources and ways of financing infrastructure; and the affordability of the poor and social concerns.

The study will take approximately 18 months starting from this month, with the draft final report due in early 2005. In addition, a series of seminars and workshops will be organized to exchange views with stakeholders – including regional governments, private sector, and civil society.