Infrastructure Finance and Financial Sector Development
Ray, Shubhomoy | March 2015
Abstract
Investment in infrastructure for increasing trade and connectivity in South Asia and Southeast Asia has been impacted by a reduction in commercial bank participation in project financing, which has significantly increased the role of multilateral financial institutions and export credit agencies. The financing model needs to change to more sustainable local market and local currency financing by harnessing domestic savings, and this will be crucial if the region is to procure investments of an estimated $3.6 trillion by 2020 for financing of its infrastructure and connectivity projects. Increased connectivity between South and Southeast Asia can play an important role in improving efficiency and productivity by having more efficient industries based on comparative advantage, enlarging the overall market size, and increasing market access. However, such economic integration faces a multitude of challenges relating to cross-border infrastructure links, weak trade facilitation, shortages of infrastructure financing, non-tariff barriers, restrictions on foreign direct investment, and weak institutional coordination. Improvement in these issues would require large-scale public and private sector investment, supplemented by commercially viable credit.
This study analyzes the means and constraints in funding cross-border connectivity projects. Using the most recent data from sources including the World Bank, ADB, and other financing and research institutions, barriers in financing cross-border projects are explored and analyzed with the help of case studies. This research brings to the fore the potential benefits of regional funding platforms and the role of multilaterals in resolving such barriers.
Citation
Ray, Shubhomoy. 2015. Infrastructure Finance and Financial Sector Development. © Asian Development Bank Institute. http://hdl.handle.net/11540/9640.Keywords
Regionalism
Regional Economy
Regional Trading Arrangements
Aid And Development
Asian Development Bank
Comprehensive Development Framework
Development Cooperation
Development Management
Development Planning
Development Strategies
Development In East Asia
Development Planning
Development Research
Green revolution
Government Policy
Regional Organization
Regional Plans
Rural planning
Aid coordination
Industrial projects
Infrastructure projects
Natural resources policy
Educational development
Development strategy
Development models
Economic development
Interregionalism
Regional economics
Regional planning
Communication in rural development
Communication in community development
Economic development projects
Development banks
Economic forecasting
Environmental auditing
Cumulative effects assessment
Human rights and globalization
Show allCollapse