Choi calls on ADB to support infrastructure

Finance Minister Choi Kyung-hwan delivers a speech Monday at the annual meeting of the Asian Development Bank in Baku, Azerbaijan. Provided by the Korean Ministry of Strategy and Finance

Finance Minister Choi Kyung-hwan called for the Asian Development Bank (ADB) to raise more funds to support infrastructure development in Asia.

In a speech Monday at the annual meeting of the bank in Baku, Azerbaijan, Choi urged the Tokyo-led ADB to diversify its sources and bring in more foreign funds to support development.

“We should lure global development funds to developing countries in Asia,” Choi said. “The ADB should diversify its channels to obtain funds.

“The demand for infrastructure in Asia is forecast to be more than $7 trillion by 2020. Considering the quality of the lives [of people in Asia], we need more funds, so we should raise the ceiling of support for infrastructure for developing countries in the region.”

Building infrastructure is a key to overcoming poverty and solving other economic issues in developing countries, he said.

He added that it is particularly important for some developing Asian nations escape the so-called middle-income trap.

The “trap” refers to the situation in which some low-income countries successfully transition to middle-income status, but struggle to make the final leap to high-income, developed nations.

“To achieve the goal of sustainable development in Asia, we need growth and stability in the region,” he said. “To escape poverty and the middle-income trap, we need to accelerate economic growth in a way that increases national income.”

The Korean finance minister’s call for more investment in infrastructure in Asia came after many of the world’s leading countries, with the exception of Japan, joined the China-backed Asian Infrastructure Investment Bank (AIIB) led by Beijing

The Tokyo-led ADB announced Monday it would launch a new trust fund to stimulate investment in infrastructure.

The fund will be raised through joint investments by the government and private sector, the Asahi Shimbun reported on Tuesday in its Japanese-language article.

The daily newspaper said Canada, Australia, Japan and other ADB members already have provided about $74 million for the new trust fund.

Some European countries also are paying attention to the fund, the paper said, and the bank aims to raise as much as $150 million.

BY KIM HEE-JIN [kim.heejin@joongang.co.kr]