Yokohama - The Asian Development Bank (ADB) says Indian and Chinese interests in infrastructure development in Sri Lanka is a good trend, as additional support for infrastructure is essential for the island nation to accelerate economic growth.
“This would be a good trend as long as these projects can facilitate inclusive and sustainable economic growth, catalyzing private investment and enhancing the effectiveness of public investment, and leading to human resource and knowledge development,” ADB’s Chief Economist, Prof. Yasuyuki Sawada told the Sunday Observer.
Referring to a question, as to how the Asian lending agency looks at the rush of Indian and Chinese investments in Sri Lanka, Prof. Sawada said there is much room for other bilateral or multilateral development resources to come in, not only to Sri Lanka, but also to other nations.
According to ADB estimates, Asia needs $1.7 trillion a year in infrastructure investment up to 2030. Yet, actual annual investment comes to only about $881 billion. On Thursday, ADB President Takehiko Nakao told journalists, the ADB needs to work with several other agencies including the China-led AIIB (Asian Infrastructure Investment Bank) to meet these needs.
Placing emphasis on collaboration to meet Asia’s infrastructure needs, Nakao called for cooperation and regional stability at the opening of the ADB’s 50th annual meeting in Yokohama on May 4.
He said the ADB aims to foster cooperation among its members to increase high-grade infrastructure projects in a broad range of fields, including transportation and energy and that he finds no difficulty in working with AIIB, responding to questions from journalists.
Confirming Nakao’s comments, Prof. Sawada said there is a large infrastructure investment demand in the Asia and Pacific region. “ADB alone cannot meet this demand. In fact, ADB’s lending capacity is only about 2% of regional needs. There is much room for other bilateral or multilateral development resources to come in,” he emphasized. At present, only 2.5% of total infrastructure investment is funded by multilateral lenders. Excluding China and India, the ratio rises to 10%.
The ADB and AIIB have co-financed three infrastructure projects since the latter started operations in 2015: a highway project in Pakistan, a natural gas field upgrade in Bangladesh and a bypass road in Georgia. The ADB is also investing heavily on projects aimed at developing rural life, road networks, expressways, railways, and ports in Sri Lanka. Last February, the ADB released a report - Meeting Asia’s Infrastructure Needs – which examines developing Asia’s infrastructure — defined as transport, power, telecommunications, water supply and sanitation. It examines how much the region has been investing in infrastructure and what may be needed through 2030. It also analyzes the challenges shaping future infrastructure investment and development. - CJ