Eddie Yue: Asian Development Bank - working to reduce poverty in Asia
Statement by Mr Eddie Yue, Deputy Chief Executive of the Hong Kong Monetary Authority,
and Head of Delegation, Hong Kong, for the 49th Asian Development Bank Annual Meeting,
Frankfurt am Main, 3-5 May 2016.
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I would like to thank the Government of Germany for hosting the 49th Annual Meeting of the
Asian Development Bank (ADB), and the Management and staff of ADB for the excellent
arrangements of the event. I would also like to congratulate ADB for the successful
conclusion of the Eleventh Replenishment of the Asian Development Fund, which would
provide critical resources to ADB to further its work in poverty reduction in Asia.
ADB is approaching its 50th Anniversary this year. Over the past fifty years, Asia has
undergone tremendous development. The economic miracle in Asia, together with the
important work of the Bank, have lifted millions of people out of poverty and substantially
improved our standard of living. After decades of rapid growth, however, there have been
signs that the trend growth of the region is slowing. This reflects, to a considerable extent,
supply-side constraints on potential output. In particular, a number of emerging economies in
the region have been held back by infrastructure bottlenecks. As I have noted during the past
few Annual Meetings, to sustain growth and propel the economy to the next stage of
development, boosting infrastructure investment is a top priority for many developing
members in the region.
The infrastructure demand in Asia is huge. ADB estimates put the overall infrastructure
investment needs of Asia at US$750 billion per annum over the 2010-2020 period. In the
meantime, there is no lack of investors interested in infrastructure investment or financing.
Despite a generally longer investment cycle, infrastructure projects can offer relatively stable
returns and a hedge to inflation. That is why sovereign wealth funds, insurance funds and
institutional investors have shown a growing interest in infrastructure investment in recent
years.
However, despite this increasing interest in infrastructure investment, there are significant
impediments in channeling savings into infrastructure financing in emerging Asia. Put it in the
language of bankers, there is a shortage of "bankable" projects, due to lack of a credible
public-private partnership (PPP) framework; deficiency in regulatory regime and legal
environment for contract enforcement; lack of transparency for monitoring project
implementation; and political uncertainty.
The above impediments call for coordinated efforts to facilitate financial intermediation, lower
barriers to investment, enhance PPP standards, and improve project governance and
delivery. A number of international and regional efforts have been made on this front,
including but not limited to the establishment of the Global Infrastructure Hub by G20, the
launch of the Global Infrastructure Facility by World Bank, and the setting up of the new
Asian Infrastructure Investment Bank focusing on promoting infrastructure development in
the region.
To contribute to the concerted efforts by the international community, the Hong Kong SAR
Government has recently asked the Hong Kong Monetary Authority to establish an
Infrastructure Financing Facilitation Office (IFFO). As its name suggests, IFFO aims to
provide a platform to bring together key stakeholders, including developing countries,
multilateral development banks, potential investors and financiers (e.g. private equity funds,
sovereign wealth funds, banks etc), project developers such as corporations capable of
developing and operating large-scale infrastructure, and professional service providers.
Through information exchange, experience sharing and capacity building, we hope to
facilitate more efficient and sustainable infrastructure investment flows to developing Asia.
IFFO will seek to collaborate with other development partners in the region and so far we
have received support from a number of them including ADB. If everything goes smoothly,
IFFO will be formally inaugurated this summer.
As an international financial and business center in the region, Hong Kong, China has long
been playing an active role in supporting infrastructure financing in Asia. By leveraging on
our unique position as an IFC, we hope the IFFO initiative will help mobilise private sector
financing and bridge the gap between investors and viable projects. We look forward to
working closely with our partners in this process.
Thank you.