The Myanmar government is expected to join the ASEAN Infrastructure Fund (AIF) this year, bringing all ten ASEAN members into the AIF, as originally planned.
When the fund was originally created in September 2011, Myanmar chose to prioritise “rejoining the international community, and indicated that [this process] should be completed first, and then join the AIF afterwards,” said Jin Cyhn, principal economist at the Asian Development Bank (ADB).
The AIF was founded with an initial equity contribution of $485.2 million, of which $335.2 million came from ASEAN and $150 million from the ADB. The aim was to provide more than $13 billion in equity and debt infrastructure financing, 22 percent of the estimated annual $60 billion of ASEAN infrastructural needs.
While Myanmar’s membership strengthens the AIF’s development with new opportunities and reinforces coherence within the economic and political alliance, the country is counting on the regional fund to “contribute to [its] shared vision of a more interconnected ASEAN Economic Community,” said Khin Khin Lwin, ADB alternate executive director in Myanmar.
Myanmar’s contribution has not yet been set but the country has predicted it will need $320 billion to meet its infrastructure needs from now until 2030, according to U Win Shein, Myanmar’s Union Minister of Finance and Revenue. He said the greatest needs are in power and connectivity infrastructure, but the government is expected to face challenges funding those projects on its own after years of isolation.
“Welcoming Myanmar as a shareholder this year will mark an important chapter in the AIF’s development,” said Bambang Brodjonegoro, Vice-Minister of Finance of Indonesia and chair of the AIF. “This will open up new opportunities and make the AIF truly an ASEAN endeavor.”
The fund promotes the use of ASEAN savings to foster infrastructure development within the region and better connect the countries’ people and institutions. All funding is supposed to stay in the region.
The AIF has chosen to focus on public-private partnerships (PPPs) despite controversy over their role in the region. This was highlighted at the World Economic Forum in Manila last week, where Don Lam, co-founder and chief executive of Vietnam’s VinaCapital Group, argued that the private sector does not get high enough returns and the government does not have the right laws in place to make PPPs viable.