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

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