Tap private sector for infra aid, gov’ts urged
MANILA, Philippines–Governments will need to link up more closely with the private sector, possibly by offering incentives on development-related projects, as the traditional sources of funding, such as state budgets and international aid, may not be able to cover the tab.
According to the United Nations Economic and Social Commission for Asia and the Pacific (Escap), the Asia-Pacific region needs as much as $2.5 trillion a year in investments for sustainable development.
Escap executive secretary Shamshad Akhtar said in a statement that the government should undertake initiatives that would help close the region’s infrastructure gaps, provide universal access to social protection, health and education, as well as implement measures to mitigate the effects of climate change.
The yearly bill for Asia-Pacific “represents only 7.5 percent of the $33 trillion held by affluent individuals in the region at the end of 2012,” Akhtar said.
Governments now have to look beyond their own revenues and tap private sector involvement in the social and environmental sectors, said Akhtar, who is also the UN’s undersecretary general.
This could be done “by creating a better enabling environment and incentivizing appropriately to compensate for risks and returns,” she explained.
Traditionally, governments rely on official development assistance, loans from multilateral lenders and their own budgets—all of which are not enough for the needed investments for sustainable development.
To bridge the funding gap, Akhtar said, it is important for governments to consider other options by developing diversified and competitive financial systems that are capable of extending finance to address development needs.
For this, she called on policymakers and regulators in the region to “work together with the private sector to improve the functioning of capital markets, institutions and regulatory frameworks.”
Akhtar also called on governments to foster the development of domestic institutional investors that could be tapped to bankroll development initiatives.
Meanwhile, the Bases Conversion and Development Authority (BCDA) on Wednesday said it secured the backing of the World Bank to make the Clark Green City project resilient to climate change.
BCDA president and chief executive Arnel Paciano D. Casanova said in a statement that the World Bank Group’s vice president and special envoy for climate change Rachel Kyte expressed her support on behalf of the institution during the World Economic Forum on East Asia held here recently.
Casanova said the multilateral lender would help the BCDA in the area of innovation and sustainable green development.
He added that the meeting with Kyte touched on the possibility of funding the green initiatives of Clark Green City using the World Bank’s Climate Change Fund.
At full development, Clark Green City is expected to create 925,000 jobs and annually contribute some P1.57 trillion to the domestic economy.
