Broadening financing options for infrastructure in Emerging Asia

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By Kensuke Tanaka, Head of Asia Desk, and Prasiwi Ibrahim, Economist at Asia Desk, OECD Development Centre 


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1st International Economic Forum on Asia
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Kensuke-Prasiwi-AsiaForumAgreeing on the need for new infrastructure is one thing; finding a sustainable way to finance it is another. According to the ADB, an estimated USD 26 trillion (or USD 1.7 trillion per year) will need to be invested in infrastructure in its developing member countries1  between 2016 and 2030 if these economies are to maintain their growth momentum, eradicate poverty and respond to climate change2  .Given the scale of investment needed, countries in the region will not have sufficient funds to meet demand. Indeed, financing infrastructure investment has been a considerable challenge for the region. Political factors can further complicate financing when they lead to the inefficient allocation of public funds. How best to finance infrastructure is, therefore, a key concern for policy makers in the region.
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Opportunities and Challenges in Southeast Asia, China and India

BannerForumAsiaMobile_ENBy Mario Pezzini, Director, OECD Development Centre, and Special Advisor to the OECD Secretary-General on Development, and Kensuke Tanaka, Head of Asia Desk, OECD Development Centre


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1st International Economic Forum on Asia
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Mario-KantsukeStrong growth – averaging 6.2% per year – is expected in Emerging Asia (Southeast Asia, China and India) over 2017-21, though trends vary across the region. While growth in China is projected to continue slowing, it will still average 6.0% over the medium term, below the 6.7% forecast for 2016. India, on the other hand, will average 7.3% annual growth in the years to 2021. The ten ASEAN member countries together are forecast to average growth of 5.1%, led by the CLM countries (Cambodia, Lao PDR and Myanmar), which will all see annual growth rates above 7%. Amongst the large ASEAN-5 economies, the highest growth rates are projected for Viet Nam (6.2%) and the Philippines (6.1%) over 2017-21. Singapore and Brunei Darussalam are both expected to see growth of 1.8% in the medium term. Private consumption is expected to continue to be an important driver of growth across much of the region, particularly with slow export growth (Figure 1):  Continue reading

The value of sharing experiences in urban redevelopment

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By Dr. Koki Hirota, Chief Economist, Japan International Cooperation Agency (JICA)


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1st International Economic Forum on Asia
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A future image of the Cebu metropolitan area

Catastrophic floods and earthquakes have hit Asian cities such as Manila, Bangkok or Kathmandu in recent years more than ever before. Air pollution in Delhi, Dhaka or Beijing has turned more and more dangerous, threatening the lives of residents. All this as the international community agreed on Sustainable Development Goal (SDG) 11 to “make cities and human settlements inclusive, safe, resilient and sustainable.” Responding to this call, the Japan International Cooperation Agency (JICA) decided to allocate 35% of its financial co-operation programme last year to urban development.

Why? Urbanisation in developing countries is happening fast. Ten mega cities of over 10 million people existed in 1990; that number increased to 28 in 2014 and is projected to reach 41 in 2025 (UN [2014]). Urban areas in Shanghai expanded by 8.1% annually between 2000 and 2010 and by 4.0% in Jakarta. Tokyo, in comparison, expanded by 0.2% (World Bank [2015]). Dhaka became a mega city in just 40 years from a population of 1 million. Many other Asian mega cities took only 50 to 70 years to reach that level, which is a much shorter time than what advanced economies experienced.

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