National development banks and sustainable infrastructure in South Asia
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National development banks (NDBs) have played an important role in South Asia’s development over the years. In the early period after Independence, the focus of NDBs was generally of supporting industrial development. Infrastructure development was supported by the budgetary financing by the governments. However, over time with the widening gaps in infrastructure requirements and staggering resources required to close them prompted governments to turn to mobilize private investments. Hence, NDBs began to be established for facilitating infrastructure development including sustainable infrastructure through public private partnerships (PPPs). In addition to the sectoral coverage, the sources of funds and business models have undergone substantial transformation. This paper summarizes this transformation and reviews the financing of infrastructure and sustainable infrastructure. It also presents case studies of two key NDBs engaged in infrastructure financing. It concludes with a few policy lessons from Indian experience. There has been revival of interest in the national development banks all across the world in the context of the potential role that they can play in closing the infrastructure gaps and building sustainable infrastructure by supporting the public-private partnerships. Hence, this stock-taking may have some policy lessons for the new initiatives. The rest of the paper is structured as follows. Section 2 provides an overview of infrastructure gaps, financing challenges and NDBs in South Asia before summarizing the evolution of NDBs in India over the post-Independence period. Section 3 overviews the infrastructure gaps and financing challenges facing India. Section 4 reviews the issues involved in sustainable infrastructure development. Section 5 summarizes the policy framework for infrastructure NDBs including the sources of finance and their financing models. Section 6 presents case studies of two premier infrastructure NDBs. Section 7 concludes the paper with a few lessons from Indian experience.
This repository item contains a working paper from the Boston University Global Economic Governance Initiative. This particular working paper was worked on in collaboration with Pradeep K. Keshari and Rohan Ray. The Global Economic Governance Initiative (GEGI) is a research program of the Center for Finance, Law & Policy, the Frederick S. Pardee Center for the Study of the Longer-Range Future, and the Frederick S. Pardee School of Global Studies. It was founded in 2008 to advance policy-relevant knowledge about governance for financial stability, human development, and the environment.