Closing the infrastructure gaps in Asean

Banners displayed along a street in Beijing ahead of the Belt and Road forum, in which seven top Asean leaders will attend.
Banners displayed along a street in Beijing ahead of the Belt and Road forum, in which seven top Asean leaders will attend.PHOTO: AFP

BEIJING - China's ambitious new Silk Road plan will help developing countries in South-east Asia to close their infrastructure gaps and improve their productivity and economic growth, bankers and analysts have said.

"The Belt and Road Initiative is a helpful catalyst to fulfil a number of infrastructure gaps in the region as demand rises," said Mr Tim Evans, head of commercial banking in international markets, Asia-Pacific, at HSBC.

Many countries in the region have placed emphasis on infrastructure building as a way to improve their economic efficiency.

New road and rail links can improve transport efficiency, so it will take just days to transport goods by road or rail between China and Thailand, when it now takes a week or more by sea.

China is helping Indonesia build a 142km high-speed rail linking Jakarta with Bandung, and providing 75 per cent of the financing for the US$5.2 billion (S$7.3 billion) project.

 

Vietnam is also in great need of infrastructure such as power generation, transport and waste treatment, noted Mr Winfield Wong, head of wholesale banking at HSBC in Vietnam.

It needs to spend about US$30 billion a year to build up its infrastructure, he added.

The Asian Development Bank has projected that Asia will need to spend US$1.7 trillion annually from 2016 to 2030 on infrastructure to maintain its growth momentum.

But countries in the region do not have deep pockets for infrastructure building. The region's leaders are thus looking to China's Belt and Road Initiative to help them fund it.

Vietnam's President Tran Dai Quang is among the seven top leaders from Asean who will attend the Belt and Road forum in Beijing from Sunday to Monday.

The others are Philippine President Rodrigo Duterte, Indonesian President Joko Widodo, Myanmar State Counsellor Aung San Suu Kyi, Malaysian Prime Minister Najib Razak, Cambodian Prime Minister Hun Sen and Laos President Bounnhang Vorachit.

Goh Sui Noi

A version of this article appeared in the print edition of The Straits Times on May 11, 2017, with the headline 'Closing the infrastructure gaps in Asean'. Print Edition | Subscribe