ID :
29432
Mon, 11/10/2008 - 17:38
Auther :
Shortlink :
https://oananews.org//node/29432
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PRIVATE SECTOR & GLOBAL AGENCIES URGED TO HELP DEVELOP ASEAN INFRASTRUCTURE
KUALA LUMPUR, Nov 10 (Bernama) -- The private sector and multilateral
organisations are invited to participate and assist Asean in financing and
implementing infrastructure projects in the region to stimulate economic growth,
Deputy Prime Minister Najib Razak said Monday.
He said these parties could engage the Task Force established by the Asean
Finance Ministers to help the region shape more effective approaches to
implement infrastructure projects, strengthen the capacity to manage them and
broaden the range of facilities and instruments to manage financial
risks.
"The Task Force will therefore operate as a conduit to the region's
Ministries of Finance to harness the expertise of the private sector to assist
in organising the necessary interventions to overcome the impediments to
infrastructure financing," he said in his keynote address at the opening of the
Asean Infrastructure Financing Mechanism Conference.
"We believe the building of infrastructures will help us build the society
and build our economies at the same time," said Najib, who is also Finance
Minister.
The Task Force, headed by Malaysia, will focus on identifying and
implementing a broad range of facilitation initiatives to address the various
impediments that result in private sector under-investment in infrastructure
projects in the region.
He said the Manila-based Asian Development Bank had projected that
Asean's
infrastructure investment requirements could reach US$583.1 billion between
2006 and 2015 or an average annual requirement of US$58.3 billion.
This is roughly five times the average annual private sector investment of
US$10.9 billion recorded from 1990 to 2006, he said.
Najib said the region's Ministry of Finances would certainly appreciate
the effective and innovative ideas put forward by the private sector and
multilateral organisations and look forward to working in partnership with them
to implement these initiatives either on a multilateral or bilateral basis.
"We believe the partnership approach to achieving the region's aspirations
for infrastructure development will create opportunities for both global and
regional players so that all may jointly benefit from a substantial expansion in
infrastructure development in the region," he said.
He said there were many impediments that limited private sector
participation in the region.
He said the returns from investments in infrastructure usually
materialised
over a long time, typically stretching to over 20 years, thus giving a high
level of uncertainties related to its financing.
Najib said the high risk premiums associated with infrastructure projects
in
the region also considerably reduced the number of commercially-viable
infrastructure projects that could be undertaken by the private scetor without
the requirement for government funding or guarantees.
"This represents a more acute challenge for the low-income member countries
where the low levels of affordability means the tariff charged to infrastructure
users may not generate sufficient revenues to cover the investment costs," he
said.
Najib said despite Asean having its gross national savings in excess of
US$340 million, it has not been evenly distributed.
"The absence of efficient intermediation mechanisms to recycle these
savings
means regional savings are not automatically available to be deployed into
infrastructure projects," he said.
Najib said dependency of infrastructure financing on government has the
drawback of concentrating risk in the country's fiscal budget.
"This constraints the ability of governments to spend when these
expenditures are needed most as a counter-cyclical measure to offset economic
slowdown," he said.
The Deputy Prime Minister also noted that Asean members must seek to commit
more resources in each other's countries.
"The more member countries have a stake in each other's prosperity, the
stronger will be the bond between the member states," he said.
Regional cooperation and coordinated intervention to promote mutual
prosperity in the region are also sorely needed at this point in time with the
recent dislocation of financial markets around the world already starting to
impact on regional economic activities, he said.
"While there is already coordinated intervention to address the effects of
financial contagion, I wish to propose that the governments of Asean consider
expanding our efforts to include creating and supporting growth opportunities
throughout the region to offset the slack in global consumption and
investment," he added.
-- BERNAMA
organisations are invited to participate and assist Asean in financing and
implementing infrastructure projects in the region to stimulate economic growth,
Deputy Prime Minister Najib Razak said Monday.
He said these parties could engage the Task Force established by the Asean
Finance Ministers to help the region shape more effective approaches to
implement infrastructure projects, strengthen the capacity to manage them and
broaden the range of facilities and instruments to manage financial
risks.
"The Task Force will therefore operate as a conduit to the region's
Ministries of Finance to harness the expertise of the private sector to assist
in organising the necessary interventions to overcome the impediments to
infrastructure financing," he said in his keynote address at the opening of the
Asean Infrastructure Financing Mechanism Conference.
"We believe the building of infrastructures will help us build the society
and build our economies at the same time," said Najib, who is also Finance
Minister.
The Task Force, headed by Malaysia, will focus on identifying and
implementing a broad range of facilitation initiatives to address the various
impediments that result in private sector under-investment in infrastructure
projects in the region.
He said the Manila-based Asian Development Bank had projected that
Asean's
infrastructure investment requirements could reach US$583.1 billion between
2006 and 2015 or an average annual requirement of US$58.3 billion.
This is roughly five times the average annual private sector investment of
US$10.9 billion recorded from 1990 to 2006, he said.
Najib said the region's Ministry of Finances would certainly appreciate
the effective and innovative ideas put forward by the private sector and
multilateral organisations and look forward to working in partnership with them
to implement these initiatives either on a multilateral or bilateral basis.
"We believe the partnership approach to achieving the region's aspirations
for infrastructure development will create opportunities for both global and
regional players so that all may jointly benefit from a substantial expansion in
infrastructure development in the region," he said.
He said there were many impediments that limited private sector
participation in the region.
He said the returns from investments in infrastructure usually
materialised
over a long time, typically stretching to over 20 years, thus giving a high
level of uncertainties related to its financing.
Najib said the high risk premiums associated with infrastructure projects
in
the region also considerably reduced the number of commercially-viable
infrastructure projects that could be undertaken by the private scetor without
the requirement for government funding or guarantees.
"This represents a more acute challenge for the low-income member countries
where the low levels of affordability means the tariff charged to infrastructure
users may not generate sufficient revenues to cover the investment costs," he
said.
Najib said despite Asean having its gross national savings in excess of
US$340 million, it has not been evenly distributed.
"The absence of efficient intermediation mechanisms to recycle these
savings
means regional savings are not automatically available to be deployed into
infrastructure projects," he said.
Najib said dependency of infrastructure financing on government has the
drawback of concentrating risk in the country's fiscal budget.
"This constraints the ability of governments to spend when these
expenditures are needed most as a counter-cyclical measure to offset economic
slowdown," he said.
The Deputy Prime Minister also noted that Asean members must seek to commit
more resources in each other's countries.
"The more member countries have a stake in each other's prosperity, the
stronger will be the bond between the member states," he said.
Regional cooperation and coordinated intervention to promote mutual
prosperity in the region are also sorely needed at this point in time with the
recent dislocation of financial markets around the world already starting to
impact on regional economic activities, he said.
"While there is already coordinated intervention to address the effects of
financial contagion, I wish to propose that the governments of Asean consider
expanding our efforts to include creating and supporting growth opportunities
throughout the region to offset the slack in global consumption and
investment," he added.
-- BERNAMA
