On May 31, 2016, Hiroshi Watanabe, Governor, CEO of the Japan Bank for International Cooperation (JBIC), participated in the "22nd International Conference on The Future of Asia" hosted by Nikkei Inc., and discussed with cabinet ministers of various Asian counties, as well as experts, on the theme of "Asian Infrastructure Plans - Challenges and Business Opportunities."
The event, held every year since 1995, is an international conference where political and economic leaders of the Asia-Pacific region hold discussions on the sustainable development of the region. This year's conference was held for two days at the Imperial Hotel in Tokyo, under the theme, "Rising to Global Challenges and Realizing Asia's Potential." Discussions focused on higher U.S. interest rates, the slowdown of the Chinese economy, and falling commodity prices, as well as the role and the direction that Asia should act to overcome challenges of social unrest, including terrorism that is spreading across the world, and achieve a new stability and sustainable growth.
Watanabe participated in a panel discussion, titled "Asian Infrastructure Plans - Challenges and Business Opportunities," where he exchanged views with Sun Chanthol, Minister of Public Works and Transport, Kingdom of Cambodia, Sarath Amunugama, Minister of Special Assignment of Government of Sri Lanka, Surin Pitsuwan, Former Secretary-General of ASEAN, and Yumiko Noda, Partner of PwC Advisory.
In a speech which Watanabe delivered at the beginning of the discussion, he explained the way in which Japan must contribute to the Asian infrastructure development. He pointed to the export of quality infrastructure systems, which will include knowledge transfer and personnel development, taking into account costs for not only the construction but also for the maintenance and repairing after completion. He also emphasized the importance of strengthening the intangible infrastructures such as laws and regulatory systems which tend to become obstacles when transporting in Asia. He expressed his hope that AEC, which was incepted in December 2015, will take the lead to break through the obstacles. For financing, he explained that the huge infrastructure demand requires the mobilization of private-sector funds syndicated amongst regional banks, government pension investment fund, and local banks of ASEAN countries. Meanwhile, he suggested the importance of making careful assessments as to whether all infrastructures should be built, raising the possibility that debt can ultimately become burdens on the people of recipient countries.
In the panel discussion, participants discussed the role of each international agency and financial institution in the infrastructure development in Asia. Mr. Sun and Dr. Amunugama pointed out that speedy decision-making and financing from international agencies are vital for local needs. Watanabe, after acknowledging such needs, explained that environmental and social consideration and assessments are indispensable for support aimed at sustainable development in the countries. ASEAN's Former Secretary-General, Dr.Surin, also expressed his view that not only the speed of financing but "the balance between the quick financing of projects and safety and security will become important."
The discussion also involved other participants at the conference actively speaking out their views, such as those stressing the necessity to mobilize private-sector funds in order to fulfill the funding needs for the Asian infrastructure development, and to promote understanding of the safety of each project in order to attract private investments.
JBIC will continue to provide a wide range of information related to the international economy and finance through participations in such international conference.