Favorable investment environment urged
Published by the Visayan Daily Star
Editor-in-Chief & President
Bureau Chief, Dumaguete
MAJA P. DELY
|CARLOS ANTONIO L. LEONARDIA
The European Union – ASEAN Business Council which serves as the sole voice for European business in Southeast Asia called on governments in the region to create a favorable environment to encourage greater private sector participation in public infrastructure projects to make up for the lack of public funds.
The report titled “Bridging the Gap: Funding of Sustainable Infrastructure in ASEAN” expected infrastructure demand to grow further due to urbanization and an increase in economic activity until 2030 but found public funds insufficient to address the need for new infrastructure or even upgrade and maintain existing infrastructure.
Citing estimates from the Asian Development Bank, the EU-ASEAN Business Council said average annual infrastructure spending in ASEAN is estimated at $184 billion and there is a current funding gap of nearly $100 billion. The council said the private sector could play a key role in financing infrastructure development in the region.
“There is no doubt there is a significant interest from both financial institutions, such as banks and insurance companies, and infrastructure construction and operating companies, to be more involved in the region. However, governments still need to ensure the right conditions are in place to attract private sector support,” the council said.
It said ASEAN could collectively work with the private sector and development banks to develop an ASEAN blended finance tool box to help standardize instruments to address common risks associated with sustainable infrastructure projects and meet the investment requirements of different sources of financing.
The council added that the recommendations are timely amid the coronavirus disease 2019 pandemic as having the right infrastructure would help facilitate further investment in the area in a post-pandemic scenario.
The private sector would be of great help to governments that are willing to work together and create an environment where investors feel safe and secure. Hopefully a coordinated ASEAN effort will help the Philippines reestablish the level playing field necessary to attract such investments that a country running out of funds will desperately need in the coming months as we struggle to cope with the effects of the COVID-19 pandemic.*