by Roderick T. dela Cruz
[ manilastandardtoday.com ] June 14, 2011
Asian countries, including the Philippines, have enough central bank reserves to fund infrastructure projects, but bottlenecks threaten to hold them back, including regulatory complexity, according to the World Economic Forum.
Participants in the World Economic Forum estimated that Asian countries would need more than $8 trillion over the next 10 years to build power plants, transportation hubs, telecom facilities, water systems and other infrastructure projects.
While the region actually has enough money in private savings, sovereign wealth funds and central bank reserves to fund the upgrades, “the problem is that bottlenecks threaten to hold back the projects, including regulatory complexity, land use and the failure to funnel those funds into long-duration financial instruments.”
Asian countries, such as Indonesia and India, are now determined to build the required infrastructure to continue economic growth by passing a new land use in Indonesia and constructing 10 kilometers of road each day in India.
Hongkong and Shanghai Banking Corp. Holdings group chief executive Stuart Gulliver said a mandatory provident fund scheme must be formed along with a mature insurance industry to build pools of long-term money.
He cited the examples of Hong Kong and Singapore that had done well in infrastructure by creating mandatory provident funds and clearing red tape to enable construction of world-class infrastructure.
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