ASEAN needs US$60B yearly for infrastructure: ADB

November 13, 2017 - 9:59 PM
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President Rodrigo Roa Duterte leads the "Family Photo" of the 10 Leaders at the opening of the 31st ASEAN Summit and Related Summits held at the PICC on Monday, Nov. 13, 2017. POOL PHOTO BY LINO SANTOS

MANILA – The Association of Southeast Asian Nations (ASEAN) needs to undertake efforts to establish macroeconomic and political stability to meet an estimated US$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 represent barely one percent.

“Basically because investors will only send in money where they are comfortable sending it. In 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 public-private 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.

“The Philippines is doing very well on PPPs, (it has) put together a very large amount in the last 15 projects,” he added.

Tycoon Enrique Razon Jr., Chairman and Chief Executive Officer of port operator International Container Terminal Services Inc. (ICTSI Philippines), said his company is focusing on the Philippines rather than other ASEAN members.

“I’m more concerned about the Philippines since we have a lot to do and a lot of catching up to do. There are certain infrastructures which governments have to do and there are certain other infrastructure projects which the private sector can do and participate,” he said during a panel on infrastructure development.

Jaime Augusto Zobel de Ayala, CEO of conglomerate Ayala Corp., said multilaterals and foreign investments can also come into infrastructure.

“I think it is important to us to be able as a country to attract the investments necessary to bridge the gap in the kind of funding that it is needed to get our infrastructure up to its different level. That means cooperation from all us, (and) a set of standards that we could all live across ASEAN would help tremendously in creating that comfort level,” he further said.