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Trends in National and Regional Investors Financing Crossborder Infrastructure Projects in Asia

Author

Listed:
  • Prabir De

    (Asian Development Bank Institute)

  • Muthi Samudram
  • Sanjeev Moholkar
Abstract
This study examines a range of crossborder infrastructure development issues related to the Asian countries. Despite active pursuit of private investment in infrastructure by most developing countries in Asia and a growing number of success stories, the pace of such investment remains slow. Participation by the private sector in infrastructure development has been mixed. While there has been moderate progress in national infrastructure development by the private sector, progress is rather limited in the case of development of crossborder infrastructure in Asia. This study documents that Asian countries have attracted higher private sector investment for the development of national infrastructure projects such as seaports and airports as compared to crossborder infrastructure projects. The rising trend among private investors in infrastructure projects indicates a decline of investments by developed country investors. One of the findings of this study is that crossborder energy projects have received greater private sector investment globally as compared to transport, telecommunication, and water projects. In the context of Asia, too, energy sector projects still dominate the investment scenario. By considering all modes of financing, this study finds that crossborder infrastructure financing in Asia has witnessed an upward trend in the last decade and a half. Aside from hydropower projects in Bhutan, crossborder infrastructure in Asia is pursued through public-private partnerships. Interestingly, these few crossborder projects in Asia have limited private sector investors, compared to other regions, despite a wide base of local investors in Asia. This paper also shows that public sector investment drives crossborder energy and transportation projects in Asia, whereas private sector investments have picked up the pace only recently, specifically after the 1997 Asian financial crisis. This study recommends that given the huge infrastructure investment needs of the region and insufficient government resources, the role of the private sector and public-private partnerships in enhancing infrastructure facilities in Asia is very crucial. A review of select case studies of crossborder infrastructure projects clearly indicates that the major reasons for slow progress of regional infrastructure development by private sector stem from both economic to non-economic issues that need to be addressed in order to promote seamless Asia.

Suggested Citation

  • Prabir De & Muthi Samudram & Sanjeev Moholkar, 2010. "Trends in National and Regional Investors Financing Crossborder Infrastructure Projects in Asia," Trade Working Papers 21880, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:tradew:21880
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    References listed on IDEAS

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    Cited by:

    1. Fauziah ZEN & Michael REGAN, . "ASEAN Public Private Partnership Guidelines," Books, Economic Research Institute for ASEAN and East Asia (ERIA), number 2014-rpr-01-asean-ppp-gui edited by Fauziah ZEN & Michael REGAN, August.
    2. Harinder Kohli & Ashok Sharma & Anil Sood (ed.), 2011. "Asia 2050: Realizing the Asian Century," Books, Emerging Markets Forum, edition 1, number asia2050, July.
    3. Fauziah ZEN & Michael REGAN, . "ASEAN Public Private Partnership Guidelines," Books, Economic Research Institute for ASEAN and East Asia (ERIA), number 2014-rpr-01 edited by Fauziah ZEN & Michael REGAN.

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