ADB/ADBI's Flagship Study on Infrastructure and Regional Cooperation

Updated 17 September 2009

Background

Infrastructure plays an important role in promoting sustainable economic growth and making growth more inclusive by sharing the benefits with the poor, particularly in remote areas and small and landlocked countries. Though there has been good progress, infrastructure development in Asia still lags behind its economic growth and international standards in terms of quantity and quality. Rapid growth in several major developing countries has caused huge pressure on infrastructure, while the lack of adequate infrastructure can hinder potential growth, weaken international competitiveness, and adversely affect poverty reduction efforts.

Nearly two-thirds of the world's poor live in developing Asia. Working together, countries in the Asia-Pacific region can unlock their vast economic potential and achieve sustainable growth, thereby eradicating poverty. Regional collective action (including subregional programs) and greater physical connectivity will support trade and investment expansion, financial market development and regional macroeconomic stability, and improve environmental, health and social conditions. Subregional programs have helped Asian countries become increasingly interconnected through land, maritime, and air transport networks, but much still needs to be done. The most significant gaps in the region are associated with energy (such as electricity) and transport (such as roads).

The need for infrastructure investment in Asia is huge and estimated to be about US$750 billion annually during 2010-2020. Intergovernmental coordination and/or regional cooperation is necessary to achieve the goals set by individual countries as well as by subregional programs, such as Greater Mekong Subregion, (GMS), Association of Southeast Asian Nations (ASEAN), South Asia Subregional Economic Cooperation (SASEC), and Central Asia Regional Economic Cooperation CAREC. Without a concerted effort by regional governments, these regional infrastructure projects are unlikely to be implemented at all.

Objective

The objective of the study is to analyze the major challenges in developing regional¹ infrastructure, particularly transport and energy—both hard and soft infrastructure—through fostering regional cooperation towards a seamless Asia. It evaluates existing regional infrastructure programs, policies, and institutions, and makes recommendations on what the region needs to address to meet these challenges and provides a framework for a pan-Asian infrastructure cooperation.

The study will focus on broad and generic issues through empirical and cased studies. Examples of best practices will be drawn mainly from key sectors/sub sectors, such as, roads, railways, airways, and ports (transport) and electricity and gas (energy). Studies have indicated that physical infrastructure links are just one part of the overall determinants of the smooth movement of goods, services, capital and people. Legal, regulatory, procedural, human and institutional capacities, trade facilitation, documentation harmonization/procedure simplification, harmonization of rules and regulations are important as well. Therefore, the study will examine both soft and hard aspects affecting infrastructure and regional cooperation.

The study is to serve as a definitive knowledge product primarily for policymakers in the region. It is intended to provide policymakers, officials from private and public sectors and other experts involved in Asian infrastructure with information and guidance on key issues concerning developing regional infrastructure projects through regional cooperation. It will also contribute to the ongoing dialogue on regional economic cooperation in Asia. The study will attempt to outline what the region needs to address in terms of policies and best practices to meet these challenges.

¹Regional infrastructure projects are defined as: (i) projects that involve physical construction works and/or coordinated policies and procedures spanning two or more countries; and (ii) national infrastructure projects that have a significant cross-border impact: (ii-1) their planning and implementation involve cooperation or coordination with one or more countries, (ii-2) they aim to stimulate significant amounts of regional trade and income; and (ii-3) they are designed to connect to the network of a neighboring or third country.

Output of the Study

The study will be undertaken in two segments and published in a two-volume book.

First segment

ADBI engaged international experts and distinguished scholars to prepare totally 26 discussion papers on relevant topics falling under 4 broad research themes: (i) trade, logistics, and investment; (ii) regional infrastructure networks; (ii) financing infrastructure; and (iv) policies and institutions. A book on the above themes has been published based on the above discussion papers.

Second segment

ADBI will prepare a second volume containing selected discussion papers.

The outputs of the study will be:

1. Volume one (book), "Infrastructure for a Seamless Asia", consisting of an introductory chapter, four thematic chapters, and a conclusion chapter as follows:
   
   1. Infrastructure Needs and Regional Cooperation
   2. Supporting Regional Trade and Investment
   3. Harnessing the Benefits of Regional Infrastructure
   4. Developing Effective Policies and Institutions
   5. Financing Infrastructure
   6. Toward a Seamless Asia
2. Volume two (book) will include selected discussion papers underpinning the rigorous scientific analytics of the policy agenda.