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International CEO Forum IV

Dr. Ravi Ratnayake Director

Poverty and Development Division UNESCAP

17 December 2007, Bangkok

REGIONAL INFRASTRUCTURE REGIONAL INFRASTRUCTURE DEVELOPMENT: OPTIONS FOR DEVELOPMENT: OPTIONS FOR

FINANCINGFINANCING

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Structure of the PresentationStructure of the Presentation

ChallengesChallenges

Infrastructure investment needsInfrastructure investment needs

Role of InfrastructureRole of Infrastructure

Regional cooperation for Regional cooperation for financing infrastructurefinancing infrastructure

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Infrastructure &

InfrastructureInfrastructure is key to:

Economic Growth

Production of goods

& services

Trade & investment

Regional integration

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Infrastructure & MDGs

InfrastructureInfrastructure promotes:

Sharing the benefits of growth

Income generation

Education & Health

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Challenges

Rural connectivity is an

issue in some countries

TransportTransport

Access to safe drinking

water & sanitation is low

Water & SanitationWater & Sanitation

One billion people lack

access to electricity

EnergyEnergy

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Challenges

The Asian & Pacific region

is the most disaster-prone

region of the world

Natural DisastersNatural Disasters

ICTICTVery visible digital divide

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Infrastructure Investment Requirements

Aggregated Demand & Limited Coverage

An

nu

al N

eed

s (U

S$

bil

l.)

300

100

200

500

400

022

8 B

600

Sectoral Projections & Broader Coverage

>60

0 B

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Energy

Telecom

Transport

W&S

201 B (33.0%)

21 B (3.4%)

(Annual Needs in US$ billion)

UNESCAP Estimates

Energy

ICT

Transport

Wat-San

Disaster

TOTAL

224 B (36.8%)

107 B (17.6%)

56 B (9.2%)

> 600 B

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Financing Gap: Sectoral DistributionUNESCAP-based Estimate

GAP: US$ 220 B / yrGAP: US$ 220 B / yrWATER

US$ 66.0 B / yr(30%)

ICTUS$ 14.4 B / yr

(7%)

DISASTER

MANAGEMENTUS$ 27.1 B / yr

(12%)

ENERGYUS$ 60.7 B / yr

(28%)

TRANSPORTUS$ 52.0 B / yr

(24%)

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Financing Gap & Regional Resources

Forex

US$ billions

Surplus 200 B / yr

> 3 T

UNESCAP-based Gap

220 B / yr

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Regional Cooperation

How to intermediate financial

resources in the region to

infrastructure investment ?

The Study puts forward four

options for regional cooperation

in financing infrastructure

development

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Institutional Arrangements

1. Asian Development Bank

ASIAN DEVELOPMENTBANK

Give higher priority to

infrastructure development

Facilitate its access to

capital markets

Expand its mandate:

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Institutional Arrangements

2. Subregional Development Banks & Funds

Operationalize, reinvigorate & consolidate

existing proposals:

North East Asian Development Bank

South Asian Development Fund

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Institutional Arrangements

3. Asian Bond Fund

Expand its mandate to increase

geographical coverage

financial scale

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Institutional Arrangements

New financial institution modeled after the EIB

4. A New Institution

Provide financing & guarantees

Raise funds from capital markets

Assist in the identification & evaluation of projects

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Benefits for SMEs

Potential is high

Major source of innovation and economic and social cohesion

Globally account for 50% of GDP,30% exports 60-75% of private employment

Growth of SMEs hampered by infrastructure deficit

Regional development bank could take a lead in financing the infrastructure gap

17United Nations

ESCAP

Thank you