Public-private action needed to ensure Asia develops as one

HANOI, Vietnam: Asia and the Pacific needs to create better infrastructure and finance and closer trade links if the region is to establish a firm foundation for strong, collective, long-term growth, panellists said on Thursday.

The public and private sectors should closely collaborate to achieve that.

The seminar, ‘The Role of the Private Sector in Promoting Regional Integration: Trade and Cross-border Infrastructure,’ was held at the 44th Annual Meeting of ADB’s Board of Governors, which ran until 6 May. It gathered public and private sector experts to discuss how the two sides can ensure that the entire region advances together.

Asia’s economy as a whole is expanding swiftly, with growth in developing Asia estimated at 9.0% last year and forecast at 7.8% this year and 7.7% in 2012. However, both within the region and within individual countries some are benefiting far more than others. Despite strong economic growth in recent years, the region still has nearly two billion people living on less than $ 2 a day.

However, with governments and development banks unable to finance the gamut of investments needed in the region, private sector participation is key. Guarantees, public-private partnerships, and other risk mitigation instruments can all help to mobilise hesitant private money.

“While governments can, and should, ensure an appropriate enabling environment for the private sector to grow and thrive in, it is the private sector that provides the most efficient allocation of resources and an enduring source of economic growth,” Lakshmi Venkatachalam, ADB’s Vice President for Private Sector and Co-financing Operations said in opening remarks to the discussion.

“Although there are already many success stories of Public-Private Partnerships in the region, many more opportunities do remain for the public and private sectors to come together to make the often very large and complex investments happen,” she added.

ADB has long promoted regional integration as a means of ensuring sustainable growth for the whole of Asia. Among other initiatives, it is contributing to the Credit Guarantee and Investment Facility to support cross-border bond issuance. It continues to finance transport and energy networks, and promote international trade in the region through guarantees and loans from its Trade Finance Program.

The speakers on the panel were Peter Amour, founder and Chief Executive Officer of AIF Capital; Bambang Brodjonegoro, Head of the Fiscal Policy Office of the Indonesia Ministry of Finance; Harjit Bhatia, Chairman and Chief Executive Officer of Asia Growth Capital Advisors (HK) Ltd.; David Fernandez, Managing Director and Head of Emerging Asia Research at JPMorgan; Fiona Lake, Executive Director and Global Markets Economist at Goldman Sachs; and Khempheng Pholsena, Minister to the Prime Minister’s Office and Head, Water Resources and Environment Administration in the Lao People’s Democratic Republic.

Pholsena said suitable frameworks, policies, and opportunities are key to attracting private sector investment in the region. She pointed to the Greater Mekong Subregion organisation which has attracted investment in infrastructure, energy, telecommunications and tourism projects.