Institutions for Asian Connectivity
By Biswa Bhattacharyay

To make Asia more economically sustainable and resilient against external shocks, regional economies need to be rebalanced toward regional demand- and trade-driven growth through increased regional connectivity. The effectiveness of connectivity depends on the quality of hard and soft infrastructure. Of particular importance in terms of soft infrastructure which makes hard infrastructure work are the facilitating institutions that support connectivity through appropriate policies, reforms, systems, and procedures and through promoting effective coordination and cooperation. Asia has many overlapping subregional institutions involved in national and regional energy, transport, and telecommunications infrastructure connectivity. However, these institutions are characterized as being less effective, informal, and lacking a clear and binding system of rules and policies. This paper draws linkages between connectivity, growth and development, governance, and institutions. It details the benefits the region could achieve by addressing needed connectivity enhancements and the connectivity and financing challenges it faces. In addition, it presents various institutional options for regional infrastructure financing. To build seamless Asian connectivity, Asia needs an effective, formal, and rules-based institutional framework. The paper presents a new institutional framework together with the organizational structures of two new regional institutional mechanisms, namely the Pan-Asian Infrastructure Forum and the Asian Infrastructure Fund.

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Comment(s)

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1. Sritanu Chatterjee
   (posted 29 June 2010 / 12:13:47 PM)
   
   Dear Sir,
   
   I much appreciate the effort to write this well thought-out paper. It is true that most of the Asian integration has been market driven with a bottom up approach unlike that of NAFTA or EU. But it would have been better as to think about how market driven approach can transform the thinking of national governments to implement the soft infrastructure. Some of the top-down projects that have faced eternal delays are mostly due to changes in market condition. One of the examples is the India-Pakistan-Iran gas pipe line project. The project seemed very attractive and feasible till crude was trading 140 USD and projected to reach 200 USD. But now the whole project is lying in shambles. So I think it is very important to have the soft infrastructure in place and that will expedite the process of regional integration.
   
   The institutional framework presented in the paper is quite elaborate. Some timelines or for the formation of each the teams could have been provided.
   
   Is there any forum still now where the premiers of Asian countries can meet? What I think missing in the papers is the process of initiation of talks for the formation of PAIF Summit Steering Committee.
   
   As crisis helps in creating successful institutions that can change the destiny of nations, I hope that the Asian Connectivity program of ADBI would help in changing the future of 60% of the world population.
   
   Thanks & Regards,
   Sritanu