ASEAN finance ministers have agreed to set up an infrastructure fund worth almost 500 million USD in the hope of narrowing the development gap between the dynamic region and major wealthy economies.
The ASEAN ministers reached consensus on the issue on the sidelines of the annual meetings of the World Bank (WB) and the International Monetary Fund (IMF) in Washington on Sept. 24.
In a step toward an ambitious goal of regional economic integration by 2015, the ASEAN finance ministers said the fund would offer loans to the bloc’s members to build roads, railways and other infrastructure projects.
"Our community is now being built with speed. This is a milestone," ASEAN Secretary-General Surin Pitsuwan said after the ministers signed the pact.
"The time for donations, the time for just gifts, is over. We have to be very innovative, we have to be very collaborative in our approach," Surin said.
The ASEAN Infrastructure Fund will start with 485.2 million USD and aims to finance six projects a year. By 2020, ASEAN hopes the fund will mobilise 4 billion USD in loans and that its total leverage will be worth more than 13 billion USD.
The fund will be based in Malaysia , the biggest contributor with a 150 million USD initial investment. Indonesia is the second-largest contributor with 120 million USD.
The Asian Development Bank will provide 150 million USD while administering the fund and ensure that all investments are financially sound.
Despite booming growth rates, ASEAN on a per capital basis lags behind major advanced nations in access to highways, railways, clean water and electricity. Thus, upgrading the infrastructure system is seen as a necessary step for the whole region./.
The ASEAN ministers reached consensus on the issue on the sidelines of the annual meetings of the World Bank (WB) and the International Monetary Fund (IMF) in Washington on Sept. 24.
In a step toward an ambitious goal of regional economic integration by 2015, the ASEAN finance ministers said the fund would offer loans to the bloc’s members to build roads, railways and other infrastructure projects.
"Our community is now being built with speed. This is a milestone," ASEAN Secretary-General Surin Pitsuwan said after the ministers signed the pact.
"The time for donations, the time for just gifts, is over. We have to be very innovative, we have to be very collaborative in our approach," Surin said.
The ASEAN Infrastructure Fund will start with 485.2 million USD and aims to finance six projects a year. By 2020, ASEAN hopes the fund will mobilise 4 billion USD in loans and that its total leverage will be worth more than 13 billion USD.
The fund will be based in Malaysia , the biggest contributor with a 150 million USD initial investment. Indonesia is the second-largest contributor with 120 million USD.
The Asian Development Bank will provide 150 million USD while administering the fund and ensure that all investments are financially sound.
Despite booming growth rates, ASEAN on a per capital basis lags behind major advanced nations in access to highways, railways, clean water and electricity. Thus, upgrading the infrastructure system is seen as a necessary step for the whole region./.
