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Filling Asia’s Infrastructure Investment Gap: The Role of Mega Infrastructure Initiatives

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  • Ganeshan Wignaraja
  • Marco Gatti

Abstract

This article uses the lens of key financial actors to analyse the daunting challenge of Asia’s long-term infrastructure development. It examines three issues: (a) the historic role of infrastructure in Asian economic development; (b) the contribution of mega infrastructure initiatives (MIIs) (e.g., China’s Belt and Road Initiative and Japan’s Partnership for Quality Infrastructure) to filling the region’s large infrastructure investment gap; and (c) the effectiveness of the Asian Development Bank (ADB). While underlining infrastructure investment as a key driver of Asia’s economic miracle and emerging regionalism, the article highlights the region’s large infrastructure investment gap. It shows that MIIs have only partially filled Asia’s large infrastructure investment gap and there is a risk of an Asian ‘noodle bowl’ of multiple overlapping initiatives, which may raise transactions costs for small regional economies. It suggests that ADB’s honest broker and financing roles have helped to bring parties together in regional projects, but ADB operations can be improved. It ends with policy implications. JEL Codes: O16, O19, G20, G23, H54

Suggested Citation

  • Ganeshan Wignaraja & Marco Gatti, 2024. "Filling Asia’s Infrastructure Investment Gap: The Role of Mega Infrastructure Initiatives," Journal of Asian Economic Integration, , vol. 6(2), pages 135-153, September.
    • Handle: RePEc:sae:jfasei:v:6:y:2024:i:2:p:135-153
    DOI: 10.1177/26316846241276291
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    References listed on IDEAS

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    1. Kumagai, Satoru & Hayakawa, Kazunobu & Isono, Ikumo & Keola, Souknilanh & Tsubota, Kenmei, 2013. "Geographical simulation analysis for logistics enhancement in Asia," Economic Modelling, Elsevier, vol. 34(C), pages 145-153.
    2. Peter Morgan & Michael G. Plummer & Ganeshan Wignaraja & Fan Zhai, 2015. "Economic Implications of Deeper South Asian–Southeast Asian Integration: A CGE Approach," Asian Economic Papers, MIT Press, vol. 14(3), pages 63-81, Fall.
    3. Andres,Luis Alberto & Biller,S. A. Dan & Herrera Dappe,Matias, 2014. "Infrastructure gap in South Asia : infrastructure needs, prioritization, and financing," Policy Research Working Paper Series 7032, The World Bank.
    4. John Arnold, 2009. "The Role of Transport Infrastructure, Logistics, and Trade Facilitation in Asian Trade," Palgrave Macmillan Books, in: Joseph Francois & Pradumna B. Rana & Ganeshan Wignaraja (ed.), Pan-Asian Integration, chapter 6, pages 351-437, Palgrave Macmillan.
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    More about this item

    Keywords

    Asian infrastructure development; Belt and Road Initiative; partnership for quality infrastructure; free and open Indo-Pacific strategy; India-Middle East Europe Economic Corridor; Asian Development Bank;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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