Hong Kong: Asia should increase investment in infrastructure to drive growth and alleviate poverty in the region, a senior Asian Development Bank official said Friday.
The stimulus packages from various countries aimed at boosting growth in the region were necessary but they were not large enough, ADB’s managing director general Rajat M. Nag said in an interview with The Associated Press.
“ADB has to come in and provide increased funding on infrastructure projects because infrastructure is very important for growth, and growth is important for reducing poverty,” Nag said in Hong Kong where he attended a two-day Euromoney conference on global infrastructure.
The Manila-based lending institution is in discussion with its shareholders about the possibility of injecting more capital into the bank, Nag said, in hopes of expanding its lending to member countries who will in turn invest in infrastructure.
The bank expected to lend about $12 billion this year, with member countries demanding an extra $5 billion, according to Nag. ADB loaned about $10 billion last year.
As the dismal economic situation is expected to worsen this year, Nag said ADB would next month lower its estimated growth rate for developing Asia a sprawling region that includes 44 economies from the central Asia republics to the Pacific islands. The bank earlier projected the region’s growth to slow to 5.8% this year from an estimated 6.9% for last year.
While describing the immediate economic prospects as gloomy, Nag said the global financial crisis provided a rare opportunity for Asia to transform its economic structure to encourage more trade within the region.
“Asia has to start now thinking of itself, not only as a producer to the world, but also as a consumer ... It has to start expanding its consumption base,” he said.
Asia would be less vulnerable to events in other regions if domestic consumption was a larger proportion of its gross domestic product, Nag said.