HONG KONG: Asian nations must spend US$26 trillion by 2030 on infrastructure to battle poverty, boost economic growth and fight climate change, the Asian Development Bank warned on Tuesday (Feb 28).
|The ADB says more infrastructure spending was needed to boost economic growth and respond to the challenge of climate change. (Photo: AFP/Biju Boro)
In its "Meeting Asia's infrastructure needs" report, the lender said governments in some of the poorest countries in the world should invest in everything from transport, telecommunications, power and water and sanitation.
It added that despite dramatic infrastructure growth in recent decades, more than 400 million people have no access to electricity, 300 million lack safe drinking water and around 1.5 billion are without basic sanitation.
"The demand for infrastructure across Asia and the Pacific far outstrips current supply," ADB President Takehiko Nakao said in a statement released alongside the report.
"Asia needs new and upgraded infrastructure that will set the standard for quality, encourage economic growth, and respond to the pressing global challenge that is climate change," Nakao said.
The more than US$1.7 trillion needed each year - from 2016 to 2030 - is twice the US$881 billion invested at the moment, the Bank said.
The Manila-based lender suggested the bulk of the cash, US$14.7 trillion, should go on power, while US$8.4 trillion should be spent on transport and US$2.3 trillion on telecoms. It indicated US$800 billion for water and sanitation.
Its report also said that of the total annual amount, US$200 billion should be invested in mitigating climate change,renewable energy and public transport. But it said a substantial infrastructure gap still remains in the 45 countries included in the report.
However, the warning comes as many economies in the region continue to struggle with a global slowdown while there are growing concerns US President Donald Trump could embark on a protectionist agenda that would batter world trade.
And while several countries around the region have promised hundreds of billions for new building programmes - including India, Indonesia and the Philippines - problems such as bureaucracy and corruption act as a drag.
Analysts also say governments should look to private finance for help. "Mobilising private capital flows to fund the financing gap that cannot be met by public financing is still a major challenge," said Rajiv Biswas, Asia-Pacific chief economist at IHS Global Insight in Singapore.
The lender, set up in 1966, is owned by 67 member-countries, 48 of which are in Asia. It approved a record US$16.3 billion in loans and grants to the region in 2015.
In a separate report, the Organisation for Economic Co-operation and Development said India's rapid economic growth has lifted 140 million people out of poverty in the past decade but large parts of the population still lack access to electricity and toilets.
The OECD said growth was not "sufficiently inclusive on a number of dimensions", adding that spending on health care amounted to barely one percent of gross domestic product.