Abstract

Infrastructure development in Southeast Asia has been financed mainly by public funds, which leave wide gaps in majority of countries. Governments have tried to attract the private sector by offering various schemes under public–private partnership (PPP). Typically, PPP contributes less than 1% of gross domestic product, while public finance greatly varies from about 2% to 10% of a country’s gross domestic product. Among major factors supporting PPP implementation, the following features are critical: coherent policy, public sector capacity to manage PPP appropriately, public sector willingness to have mutual relation with private partners, and leadership. Private participation is still continuously growing; and its implementation is not limited to hard infrastructure only, but also to social infrastructure.

Highlights

  • Using a sample of advanced economies, the International Monetary Fund estimates that an increase of 1% in investment spending raises gross domestic product (GDP) by approximately 0.4% in the same year and by 1.5% in 4 years after the increase (IMF 2014)

  • This paper attempts to provide the landscape of infrastructure development in majority of the Association of Southeast Asian Nations (ASEAN) member states with emphasis on financing mechanism, in which private partnership (PPP) is promoted as strong complement of limited public funds

  • In five main countries promoting PPP (Indonesia, Malaysia, the Philippines, Thailand, and Viet Nam), PPP typically contributes only less than 1% of GDP, while public finance greatly varies from about 2%–10% of a country’s GDP (Table 1)

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Summary

INTRODUCTION

Infrastructure is fundamental to support economic growth and human well-being. It provides goods and services for direct use as well as supports other socioeconomic activities. The public–private partnership (PPP) allows the private sector to utilize its competence and innovative resources; and, at the same time, to gain fair benefits from it. This paper attempts to provide the landscape of infrastructure development in majority of the Association of Southeast Asian Nations (ASEAN) member states with emphasis on financing mechanism, in which PPP is promoted as strong complement of limited public funds. It discusses the “infrastructure ecosystem,” and the potential to use PPP in social infrastructure and pro-poor development planning

Infrastructure Development in Southeast Asia
Institutionalizing Public–Private Partnership
REGULATORY FRAMEWORK AND INSTITUTIONS IN SELECTED SOUTHEAST ASIAN ECONOMIES
Philippines
Malaysia
Thailand
APPROACHES TO PUBLIC–PRIVATE PARTNERSHIPS IN SOUTHEAST ASIA
Risk Management and Support
Public–Private Partnerships Compared with Other Funding Options
POTENTIALS OF PUBLIC–PRIVATE PARTNERSHIP FOR SOCIAL INFRASTRUCTURE
Opportunities and Challenges
Case Studies
RECOMMENDATIONS
Findings
24 | References

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