ASEAN finance ministers have agreed to set up an infrastructure fundworth almost 500 million USD in the hope of narrowing the developmentgap between the dynamic region and major wealthy economies.

The ASEAN ministers reached consensus on the issue on the sidelines ofthe annual meetings of the World Bank (WB) and the InternationalMonetary Fund (IMF) in Washington on Sept. 24.

In a step toward an ambitious goal of regional economic integration by2015, the ASEAN finance ministers said the fund would offer loans to thebloc’s members to build roads, railways and other infrastructureprojects.

"Our community is now being built withspeed. This is a milestone," ASEAN Secretary-General Surin Pitsuwan saidafter the ministers signed the pact.

"The time fordonations, the time for just gifts, is over. We have to be veryinnovative, we have to be very collaborative in our approach," Surinsaid.

The ASEAN Infrastructure Fund will start with485.2 million USD and aims to finance six projects a year. By 2020,ASEAN hopes the fund will mobilise 4 billion USD in loans and that itstotal leverage will be worth more than 13 billion USD.

The fund will be based in Malaysia , the biggest contributor with a150 million USD initial investment. Indonesia is the second-largestcontributor with 120 million USD.
The Asian Development Bankwill provide 150 million USD while administering the fund and ensurethat all investments are financially sound.
Despite boominggrowth rates, ASEAN on a per capital basis lags behind major advancednations in access to highways, railways, clean water and electricity.Thus, upgrading the infrastructure system is seen as a necessary stepfor the whole region./.