Private funding crucial for Asian infrastructure, says Singapore minister

Singapore is the leading economy in Asia. (AFP pic)

SINGAPORE: Asian governments are seeking to tap private investment for the region’s substantial infrastructure needs as the current rate of public financing is “insufficient and unsustainable,” said Singapore’s second finance and education minister, Indranee Rajah.

Globally, government financing accounts for 40% of infrastructure expenditure, and 70% in emerging markets, while in Asia, this stands at 90%, according to an emailed copy of a speech by Rajah on Friday.

“This rate of government financing is unsustainable and governments are looking at how to crowd-source private sector investments to help fill the gap,” said Rajah, who is also a minister in the prime minister’s office.

“A marriage between public sector project needs and private sector capabilities and expertise is required.”

“Governments will need to build up capabilities and work with the private sector in order to generate a pipeline of investment-ready projects,” Rajah said.

“Identifying legal reforms is also needed to develop an enabling environment for project development and investments,” she added.