Infrastructure spending is being reduced across much of Asia because of the global financial crisis, even though such spending is the very thing the region needs to recover from the turmoil, experts say.
Funds from Asian governments, multilateral institutions such as the Asian Development Bank, and private capital would not be enough to fully meet Asia's infrastructure spending needs, they argued.
'Infrastructure is a key requirement for economic growth, and any reduction in investment today due to the financial crisis will have an impact tomorrow when the infrastructure is needed for economic recovery,' said Alejandro Perez, a senior investment officer at the International Finance Corp, the international financing arm of the World Bank.
'Asia needs to invest US$3 trillion to US$4 trillion in infrastructure between 2009 and 2020,' ADB managing director general Rajat Nag said.
Sustained investment in infrastructure was key to reducing poverty and inequality and critical to getting Asia out of this crisis, Mr Nag said at the Euromoney Global Infrastructure Finance Conference last month. 'Asia still has 750 million people without access to drinking water. Asia still has 1.9 billion people without access to improved sanitation.'
Developing countries face a fund shortfall of US$270 billion to US$700 billion this year as private creditors shun emerging markets, and only 25 per cent of the most vulnerable countries have resources to prevent a rise in poverty, the World Bank says.