India is one of the prominent members of the founders’ group. Japan, South Korea and Indonesia are yet to join in. The West is understandably upset as the World Bank and the financial institutions in Europe may lose their importance. The Asian Development Bank (ADB), on the other hand, concedes the need for a bank like this to meet the growing demand for investments in infrastructure in this region.
Investments in infrastructure are of strategic importance for economic development. Many of the countries among the 21 signatories, including India, need huge investments to expand their infrastructure facilities.
The main objective of the new bank is to channelise the investments into infrastructure development, adopting multi-country investment projects through collaboration, wherever necessary. Investments required are very huge. According to an estimate by the Asian Development Bank, the developing countries in the Asian region require an investment of 8 trillion dollars during the decade 2010-20, for meeting the requirements of the present infrastructure facilities.
Indian economy’s investment requirements are massive. National highways need special attention in investment. “If you want to become rich, invest on roads,” says a Chinese proverb. Good roads contribute silently to the welfare of various sections of the society in addition to contributing to the economic development.
Indian Railways is in dire need of investments for expansion and for improving its operational efficiency. Power sector continues to be a bottleneck, hindering growth of the economy.
Indian infrastructure companies should take up development projects funded by the bank in different countries. Perhaps, they can take advantage of the absence of Japan and South Korea in the Bank’s group, seeking preferential treatment from the member countries in offering projects for execution in their countries.