- POSTED: 03 Oct 2013 21:32
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The Asian Infrastructure Investment Bank proposed by Chinese President Xi Jinping to spur project financing could be open to participation from other countries.
JAKARTA: The Asian Infrastructure Investment Bank proposed by Chinese President Xi Jinping to spur project financing could be open to participation from other countries.
That is a suggestion from China's government think tank - the China Centre of International Economic Exchanges - on the sidelines of the upcoming APEC Summit in Bali, Indonesia.
Market players said despite ample liquidity in Asia, funds are not flowing to drive infrastructure development in the region.
The Asian Development Bank estimates that Asia alone needs to invest US$8 trillion in infrastructure to drive growth. A good part of that funding could go into projects like power generation and transportation.
At a seminar in Bali, China's economic think tank said the Asian Infrastructure Investment Bank mooted by President Xi when he visited Indonesia earlier this week could help to meet funding gaps.
Zheng Xinli, permanent vice chairman of China Centre for International Economic Exchanges, said: "The first step is to find like-minded partners to come on as founding members. This investment bank should be open to any Asian government that is keen to participate. They are welcome."
Mr Zheng added that urbanisation in emerging Asia will create a huge demand for infrastructure and steps taken to meet these needs will give the global economy a lift.
"Along with funds from developed nations and technical know-how, it will help to speed up progress in industrialisation and urbanisation in Asia, and that could spur developed nations towards recovery," he said.
Observers said governments should also put in place policies that encourage financing from the private sector.
Conor McCoole, managing director and head of project finance at Standard Chartered Bank, explained: "Government can do a lot. I think they can simplify bidding procedures, I think they can help to accelerate permitting and governmental approvals, they can work to unblock land acquisition problems where those cause delays in projects."
And for the Asian Infrastructure Investment Bank to have a sustained effect, observers said it has to be executed as a private enterprise, free from bureaucracy.