Asean needs $60-B yearly for infra: ADB
MANILA – The Association of Southeast Asian Nations (Asean) needs to undertake efforts to establish macroeconomic and political stability to meet an estimated $60 billion a year to address the region’s infrastructure needs, a senior official of the Asian Development Bank (ADB) said Monday.
Diwakar Gupta, ADB Vice President for Private Sector and Cofinancing Operations, noted that there is a huge amount of money available but flows into infrastructure is barely one percent.
“Basically because investors will only send in money where they are comfortable sending it. In the other words, you need to therefore create a matrix where the risk for investing is commensurate with the return,” he said during the second day of the Asean Business and Investment Summit (ABIS) 2017.
To attract investments into infrastructure, Gupta thus underscored the need for Asean to create conducive market conditions, establish effective dispute resolution and enact dependable laws.
He also proposed undertaking deeper capital market reforms, such as through innovative instruments, rating agencies and information communication technology (ICT), to establish a stronger local capital markets.
“Those are the things that we will need to do. Governments will have a very large role to play,” he added.
Gupta also cited the important role of publicprivate partnership (PPP) arrangements in increasing infrastructure investment requirements.
“And then there is running business, which the government can’t do, that has to be in private sector hands where efficiencies in execution can be leveraged. And I think that’s really the way forward,” he said.
“Philippines is doing very well on PPPs, (it has) put together a very large amount in the last 15 projects,” he added.