Japanese prime minister pledges $110B for Asian infrastructure. Australia needs more infrastructure developments to correspond the high population growth. Hopefully more business would be generated between two nations.
We hope that there are more businesses would be generated between Japan and Australia to develop the infrastructure in Australia.
According to The Nikkei Asian Review, Japanese Prime Minister Shinzo Abe said his government and the Asian Development Bank will jointly provide $110 billion to finance "innovative" infrastructure in Asia. Innovation, Abe said, is necessary if Asia is to counter the challenges that wait ahead, such as the graying of populations and the ever-increasing demand for energy.
Japan will pursue "innovative infrastructure," such as safe, reliable high-speed rail systems and advanced water treatment systems. "In order to make innovations extend to every corner of Asia, we no longer want a 'cheap, but shoddy' approach," Abe said, and announced a new set of financing methods.
One has the Japan Bank for International Cooperation, the Japanese government's financing arm, actively taking on short-term profit risk. This will ease the pressure on foreign governments to put up guarantees. "Until now," Abe said, "recipient governments' payment guarantees for short-term risk have been requested somewhat excessively."
In another measure, the Japan International Cooperation Agency, which coordinates the government's official development assistance, will team up with the ADB to establish a new fund for private infrastructure development. In addition to lending money, the fund will invest in equity. "The ADB's capacity for mobilizing capital for the private sector will increase to three times its capacity until now," Abe said.
In total, "Japan, in collaboration with the ADB, will provide Asia with innovative infrastructure financing at a scale of $110 billion over five years," he pledged.
"Creating quality. That is the Japanese way of operating."
According to The Australian Financial Review, Melbourne, Sydney and Brisbane will also enjoy dramatic population growth, severely straining existing transport infrastructure. Infrastructure Australia chairman, Mr Birrell, said the growth would be "massive ... even by international standards".
Sydney and Melbourne will see their populations jump from under 4½ million today to about 6 million in 2031 and about 8½ million in 2061. Perth and Brisbane will leap from around 2 million today to 3 million in 2031 and around 5 million in 2061, with Perth surpassing its northeastern rival.
"We have to accept that we'll have four world-scale cities which will require significantly more infrastructure," Mr Birrell said.
Car and truck drivers in Australia may need to pay higher tolls to the private companies likely to build the new roads and tunnels to stop congestion choking Australia's cities, according to Infrastructure Australia.
"We are seeing congestion problems because governments are struggling to catch up with the economic and population growth that's seeing soaring demand," he told The Australian Financial Review.
Mr Birrell said that if governments take a longer-term view "it becomes clear it's the policy barriers and in particular the funding barriers that are the biggest inhibitions to getting things done".
"Twenty years ago we would have been talking about the engineering challenges of projects. That debate has gone. The issue today is 'How can you fund it?' and 'Can you get the project approved?'"
Subscribe to our English Newsletter