Abstract
Cross-border infrastructure projects offer significant economic and social benefits for Asia. If the required investment of $8 trillion in pan-Asian connectivity was made in the region’s infrastructure during 2010–2020, the total net income gains for developing Asia could reach about $12.98 trillion (in 2008 US dollars) during 2010–2020 and beyond, of which more than $4.43 trillion would be gained during 2010–2020 and nearly $8.55 trillion after 2020 [1]. Infrastructure connectivity helps improve regional productivity and competitiveness by facilitating the movement of goods, services and human resources, producing economies of scale, promoting trade and foreign direct investments, creating new business opportunities, stimulating inclusive industrialization and narrowing development gaps between communities, countries or sub-regions. Nevertheless, due to limited financing, progress in the development of cross-border infrastructure in the region is low. The purpose of this paper is to examine the key challenges faced in financing cross-border projects and discuss the roles that different stakeholders—national governments, state-owned enterprises, private sector, regional entities, development financing institutions (DFIs), affected people and civil society organizations—can play in facilitating the development of cross-border infrastructure in the region. In particular, this paper highlights the major risks that deter private sector investments and FDIs and proposes that more attention should be paid to the sustainability-linked measures and adaption standards for the achievement of the multiple United Nations Sustainable Development Goals (SDG) [2]. The integration of environment-social-governance (ESG) elements help establish an enabling environment where cross-border infrastructure projects are more inclusive, sustainable, and resilient. Recommendations are also provided based on the international examples to address the financing needs and risks when cross-border projects are undertaken.
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