AIIB to provide new infrastructure funding avenue, promote China-ASEAN connectivity

KUALA LUMPUR - Being a member of Asian Infrastructure Investment Bank (AIIB) provides a new funding avenue for Malaysia's infrastructure development, which in turn will promote the connectivity between China and ASEAN, and the region's economic growth in the end, said a Malaysian economist.

Malaysia has continued to develop its infrastructure like roads, highways, airports, however, a notable area of "weakness" or " bottlenecks" in the country's infrastructure is railways, which has been a somewhat under-invested infrastructure until recently, Suhaimi Ilias, chief economist of Malaysia's leading bank Maybank, said in an interview with Xinhua.

With Phase One of the Klang Valley Mass Rapid Transit and Light Rail Transit extension projects under construction, more railway- related projects have been proposed and are in the planning, Suhaimi said.

"The total values of the railway infrastructure projects that are currently under construction and in the pipeline are 160 billion Malaysian ringgit (about $44.14 billion) for the period 2013-2020," he said.

However, with the country's level of economic development currently, it no longer "qualifies" for, or can have access to, infrastructure project financing and soft loan programs from the major developed economies and international organizations like the World Bank like in the past, the economist said. Now AIIB stands out as a new source of funding for Malaysia's infrastructure development, he added.

"One should also look at the broader context of the upcoming ASEAN Economic Community (AEC) to be officially launched later this year," Suhaimi noted, adding that in particular, the expected focus on railway infrastructure development in Malaysia going forward fits in with China's "One Belt, One Road" initiative.

This is especially important in improving and expanding the connectivity between China and ASEAN, specifically involving Singapore, Malaysia, Thailand, Myanmar, Vietnam, Cambodia and Laos, a potential railway backbone that is well-linked to the roads, highways, ports and airports across ASEAN, he said.

Transport and logistics will one of the key enabler for the growth and facilitate the efficient working of an integrated ASEAN Single Market and Production Base, given the expected rise in business flows via trades and investments, he said.

Suhaimi said that Malaysia can play a strategic role in making ASEAN a key part of China's "One Belt, One Road" initiative and the AIIB set up, by tapping on Malaysia's current chairmanship of ASEAN and taking note of China's interests in partnering ASEAN.

Moreover, the economist proposed AIIB to consider setting up an "ASEAN Office" in Kuala Lumpur as a hub to coordinate and execute its operations within ASEAN.