Governments across Asia will lean on public-private partnerships more than ever to drive infrastructure development and help the region recover from the economic impact of the pandemic.
Speaking at this week’s Asia Infrastructure Forum 2021, Singapore’s Second Minister for Finance and National Development, Indranee Rajah, said the cost of dealing with the immediate effects of covid-19 had resulted in many Asian governments having insufficient resources to develop infrastructure projects on their own, leaving private capital with an essential role to play in filling that gap and aiding the region’s economic recovery.
“Asian governments and multilateral development banks have identified infrastructure as an important means of achieving economic recovery through increased access to financial flows, boosting construction activity and employment,” Rajah said.
“While many Asian governments have already taken steps to drive economic recovery through infrastructure development, additional investments through PPPs would be a welcome source of liquidity as countries continue to devote urgent resources to battle the pandemic.”
The forum also saw the launch of the Asian Sustainability Infrastructure Advisory panel. Bringing together international experts in the field of sustainable infrastructure, the panel intends to promote opportunities for the private sector to support sustainable development across the region, an area that Rajah said would be “critical” for countries seeking to build economic resilience post-pandemic.
“In addition to the importance of deepening capabilities in Asia, strong partnerships will also be key to driving sustainable infrastructure in the region. These can come in the form of PPPs or deeper collaboration between governments and international financial institutions,” Rajah said.
“Given the diversion of public resources and expenditure to health and social programmes to mitigate the impact of the pandemic, it is imperative that governments partner the private sector to develop infrastructure.”
During the forum, World Bank East Asia and Pacific vice-president Victoria Kwakwa also highlighted the need for private capital to help drive infrastructure across the region. While several countries globally had experienced a drop in private investment in infrastructure as a result of the pandemic, she said East Asia in particular had seen a roughly 75 percent reduction, a sharper decline than most.
“There are some challenges in bringing infrastructure back, but I’m confident [about future development]. This is a region that knows the importance of infrastructure,” Kwakwa said.