Building Asia
The domestic construction industry is busy as Jin Liqun, secretary general of the Multilateral Interim Secretariat of the Asian Infrastructure Investment Bank (AIIB), has decided to visit Korea on Sept. 8 to 9. He has been nominated as the first president of the AIIB.
With the total value of the orders of domestic construction firms received for construction in the Middle Eastern regions as of Aug. decreasing by half from last year, due to the rapid fall in oil prices and Islamic State issues, the figure in Asia has increased nearly 70 percent, emerging as the largest market in the world. While the total amount of contracts won in the Middle East as of Aug. dropped 54.8 percent to US$11.7 billion (13.76 trillion won) from US$25.9 billion (US$30.46 trillion won) in the same period a year earlier, the figure in Asia grew 68.8 percent to US$15 billion (17.64 trillion won) from US$8.9 billion (10.47 trillion won).
Industry sources expect that the China-led AIIB will increase infrastructure investment in the region, compared to the existing Japan-led Asian Development Bank (ADB) system. According to data from the Organization for Economic Co-operation and Development (OECD), the infrastructure investment demand in Asia is estimated at US$8 trillion (9500 trillion won) by 2030. Accordingly, the infrastructure construction market is expected to grow further in the future. Domestic construction firms, which have hope for the Asian markets, are very much interested in the AIIB’s business plans, which will be announced by Secretary General Jin Liqun during his visit to Korea. He will stay in Korea for two days from Sept. 8 to 9 and meet with domestic firms at the Korean Chamber of Commerce on the 9th to announce the launch of the AIIB and the its future business plans.
An official from a large construction company said, “Due to prolonged low oil prices, there is a negative outlook for winning contracts in the Middle Easter in the future. With the launch of the AIIB, however, we are still in a situation of hope, as the investment in developing countries in the Asian regions is expected to rise. Attending the meeting, we will figure out the AIIB’s plans and come up with the business strategy.”