1. Masahiro Kawai Dean and CEO, Asian Development Bank Institute 15 September 2010, New Delhi Sustainable Growth and Enhancing Integration in Asia A Joint Conference of ADBI and RIS on The views expressed in this presentation are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.

2. ADBI-RIS Joint Conference on Sustainable Growth and Enhancing Integration in Asia 15 September, New Delhi The book was published in September 2009 It received strong attention from senior policymakers and media in Asia and beyond APEC Financial Minister Statement for Singapore Summit quoted estimates on infrastructure needs 50,000 downloads in first month after website posting ASEAN economies have decided to create an ASEAN Infrastructure Fund similar to Asian Infrastructure Fund proposed in the book Translated into Chinese and Japanese

3. ADBI-RIS Joint Conference on Sustainable Growth and Enhancing Integration in Asia 15 September, New Delhi Outline Need for Infrastructure Objectives Definition, Scope, Coverage, and Vision Infrastructure Financing Requirements 2010–2020 Meeting Financing Needs Key Messages Conclusion

4. ADBI-RIS Joint Conference on Sustainable Growth and Enhancing Integration in Asia 15 September, New Delhi Need for Infrastructure The recent global crisis provides 5 reasons for increasing infrastructure investment in Asia: I.Enhances competitiveness, productivity, and economic recovery, and helps to sustain medium to long term growth II.Helps to increase standards of living and reduce poverty by connecting isolated places and people with major economic centers III.Promotes environmental sustainability through proper designing IV.Forms an important part of fiscal stimulus packages, especially if the global economy has a double-dip V.Helps to increase regional demand and intraregional trade for rebalancing Asia’s growth

5. ADBI-RIS Joint Conference on Sustainable Growth and Enhancing Integration in Asia 15 September, New Delhi Objectives Summarizes the key issues and challenges in strengthening cross-border connectivity in Asia Examines benefits and costs of regional infrastructure Estimates the financing requirements for developing Asia’s infrastructure Provides recommendations for effective programs, policies, and institutions for regional infrastructure Presents a framework for pan-Asian infrastructure cooperation toward a seamless Asia

6. ADBI-RIS Joint Conference on Sustainable Growth and Enhancing Integration in Asia 15 September, New Delhi Scope and Coverage Issues and challenges for regional infrastructure in Asia up to 2020 ADB’s 44 DMCs Broad pan-Asian initiatives and sector-specific subregional efforts—transport, energy, telecoms Focus on “soft” infrastructure—policy, regulatory, governance, trade facilitation, and institutional frameworks—to support development and operation of “hard”, or physical, infrastructure components and to facilitate regional trade

7. ADBI-RIS Joint Conference on Sustainable Growth and Enhancing Integration in Asia 15 September, New Delhi Definition: Regional Infrastructure Projects Cross-border (or transnational) projects that involve “hard” and “soft” infrastructure spanning two or more neighboring countries National projects that have a significant cross-border impact in stimulating regional trade and income or in connecting with the network of neighboring or third countries

8. ADBI-RIS Joint Conference on Sustainable Growth and Enhancing Integration in Asia 15 September, New Delhi Long-Term Vision: A Seamless Asia Creation of a Seamless Asia—an integrated region connected by world-class, environment- friendly infrastructure networks In view of Asia's enormous untapped economic potential and the global financial crisis, now is the time to build efficient and seamless connections across Asia and with the rest of the world for a more competitive, prosperous, and integrated region

9. ADBI-RIS Joint Conference on Sustainable Growth and Enhancing Integration in Asia 15 September, New Delhi Financing Needs for Asia’s National Infrastructure by Sector: 2010-2020

10. ADBI-RIS Joint Conference on Sustainable Growth and Enhancing Integration in Asia 15 September, New Delhi Indicative Investment Needs for Regional Identified and Pipeline Infrastructure Projects: 2010-2020

11. ADBI-RIS Joint Conference on Sustainable Growth and Enhancing Integration in Asia 15 September, New Delhi Meeting the Financing Needs On average, Asia needs to invest about US$750 billion per year in infrastructure (both national and regional) during 2010-2020 The region’s vast domestic savings can serve as the main source of financing for Asia’s infrastructure Strengthen national and regional local currency bond markets — notably the ASEAN+3 Bond Markets Initiative and the Asian Bond Funds Identify and prepare “bankable” projects to encourage private financing and participation involving public-private partnerships (PPPs)

12. ADBI-RIS Joint Conference on Sustainable Growth and Enhancing Integration in Asia 15 September, New Delhi Key Messages 1) During 2010–2020, Asia needs to invest about US$8 trillion in national infrastructure and US$290 billion in specific regional infrastructure projects—an overall average infrastructure investment of about $750 billion per year 2) The required infrastructure investment would produce substantial real income gains of about US$13 trillion for developing Asia during the same period and beyond 3)A “Pan-Asian Infrastructure Forum (PAIF)” should be established to help coordinate and integrate existing subregional infrastructure initiatives toward the Seamless Asia vision 4) An “Asian Infrastructure Fund (AIF)” is needed to mobilize international funds (public and private) and help prioritize, prepare, and finance “bankable” regional infrastructure projects This is the first time that such a study on regional infrastructure has been undertaken.

13. ADBI-RIS Joint Conference on Sustainable Growth and Enhancing Integration in Asia 15 September, New Delhi A Framework for Pan-Asian Infrastructure Cooperation

14. ADBI-RIS Joint Conference on Sustainable Growth and Enhancing Integration in Asia 15 September, New Delhi Conclusion A Framework for Pan-Asian Infrastructure Cooperation Requires: A common vision, strong leadership, and a shared commitment by Asian leaders Strong institutional capacities at the national level Coherent infrastructure development at the national, subregional, and regional levels Pan-Asian infrastructure strategies to prioritize investments and coordinate policies

15. ADBI-RIS Joint Conference on Sustainable Growth and Enhancing Integration in Asia 15 September, New Delhi Conclusion (cont’d) Effective planning and implementation of projects to ensure “win-win” outcomes among participating countries by: –Addressing the issue of asymmetric distribution of projects’ costs and benefits –Managing negative socioeconomic impacts Effective financing framework to help mobilize the region’s vast savings and encourage PPPs Asian economies, together with international and regional development partners (e.g. ADB, WB, and UNESCAP), bilateral organizations (e.g. from Japan, Korea, Singapore, PRC and India) can work together to achieve a Seamless Asia