The region is estimated to spend about $881bn a year at present. This means a gap between actual and required spending of about 2.4 per cent of forecast gross domestic product in 2016-20.
More than half the estimated spending should go to transport and a third to power, the report says, pointing in particular to a lack of ports, railways and highways to link countries to regional and global markets. Another $800bn is needed for projects to help the 1.5bn people who have no access to basic sanitation and the 300m without safe drinking water.
Critics say some ambitious regional infrastructure projects — such as the East-West Economic Corridor spanning the Mekong subregion between the coasts of Myanmar and Vietnam — have been slow to materialise or failed to yield benefits. Other ventures — such as a proposed high-speed rail line linking the southern Chinese city of Kunming, the Lao capital of Vientiane, Bangkok and the Thai coast — have been hampered by political tensions or wrangles over financial terms.
Difficulties had been met in developing infrastructure, particularly cross-border projects, Mr Nakao told the FT, but he also cited successes from road-building in Pakistan to natural gas supply for Bangladesh. The private sector would need to play a big role in filling the financing gap, as in existing projects to harness geothermal power in Indonesia and to expand Mactan Cebu airport in the southern Philippines, he said.
The size of the infrastructure gap varies greatly, the report says. The Pacific and south Asian subregions are projected to need annual financing equal to about 9 per cent of total 2016-30 GDP, falling to less than 6 per cent in southeast Asia and east Asia.
