Banking Industry Sees Opportunity In Asia’s Urbanization
Industry leaders at a banking forum in Singapore Friday said they see huge business opportunities from urbanization in Asia, highlighting themes such as infrastructure, consumer products and agriculture.
The infrastructure sector of the region alone calls for investments of US$ 2.4-T in the years from now til Y 2030, a senior fellow from the McKinsey Global Institute, said at the DBS Asian Insights Conference.
He also expected the agricultural sector to consolidate, generating huge business opportunities.
Liew Mun Leong, a veteran business leader who is now chairman of the Changi Airport Group, said Asia, in particular, would need transport facilities, hospitals and airports.
There will be a huge demand for financing as various construction is expected to remain robust in Asia, creating business for the banking sector, too, he said.
“Asia’s cities are growing by 44-M people each year,” the DBS Bank said in a report, citing research by the Asian Development Bank (ADB). “In about a decade from now, half the region’s population will live in cities.”
The DBS Bank said that Asia will drive global urbanization, with China and India expected to contribute a combined 37% of the 1.4-M more urban residents by 2030.
China sees urbanization as a key tool to reduce poverty and create jobs. Southeast Asia has followed suit. South and Southwest Asia are now 45 and 35% urban now, but the urban population has been increasing in almost every country in Asia since Y 1980.
DBS Bank’s Chief Economist said that Asia contributed US$ 0.40 of demand for every US$1.00 of new demand created by the United States in Y 1980, whereas nowadays it is US$2.50 of demand created by Asia for every US$1.00 of demand created by the United States.
“Since Lehman Brothers collapsed five years ago, Asia has added 1.25 Germanys to the world’s economic map,” he said. “Nobody saw this coming in Y 2008. Most argued it was impossible.”
Asia is now putting a Germany on the world economic map every 3. 5 yrs. In Y 2039, it will be creating a Germany every 7 months.
Experts say that Asian policy makers need to make the cities liveable, given that China has to build another 3 Americas to complete its urbanization process, India will have to build another 3, while Indonesia will have to build another 1 or 2 Americas.
Give the massive scale of urbanization, the cities would have to be built “correctly,” said Liu Thai-Ker, a renowned architect who is known as the father of urban planning in Singapore.
Liu said that not many cities in Asia are truly liveable, except for some cities in Japan and Singapore. Some of the cities in China are close to being liveable, too.
Liew said that the cities would have to be resilient, which calls for all possible factors to be taken into consideration in the process of planning.
Singapore has had no major earthquakes, yet discussions have been held on the scenario of an earthquake, he said.
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Banking Industry Sees Opportunity In Asia"s Urbanization