This will strengthen expectations that risks and gains will be correctly balanced."Jakarta (ANTARA News) - Infrastructure development is the key to ensuring Asias better future, Executive Director of the International Monetary Fund Christine Lagarde stated here on Wednesday.
"Improving the economy, roads, railways, and ports in border areas as well as building new water and electricity supply networks would serve as development milestones. In developing countries, habitable cities with good transportation facilities and sophisticated IT networks will help avoid the middle-income trap," she noted.
The Asian Development Bank has forecast Asias infrastructure needs in the next decade to reach US$8.3 trillion.
Lagarde emphasized that the governments would require substantial funding, so the first step should be to boost public investment and set better targets.
"In other words, efficient infrastructure spending would require strong fiscal policies, something that the IMF may lend assistance thorough planning, effective control of expenditures, and increased mobilization of tax revenue, among others," she explained.
She pointed out that the governments funds would not be adequate to meet them. She affirmed that infrastructure development also needs capital markets to provide private sources of financing, including risky infrastructure capital that could be sold to long-term investors, which in turn also requires credit insurance.
Lagarde noted that private investment has to be developed based on an attractive business environment. Hence, it means that the governments must support it through transparent regulations and good planning coupled with intolerance to corruption.
"This will strengthen expectations that risks and gains will be correctly balanced," she affirmed.
(Reporting by Citro Atmoko/Uu.H-YH/INE/KR-BSR/A014)
Editor: Priyambodo RH
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