It is the case that infrastructure is the platform on which any economy depends. It is also the vehicle by which a society provides public goods and services to its communities, whether it be health care, education, or safe water. Whatever social, cultural, political, and economic profile a country may have, the need for quality infrastructure is the perennial common denominator. Thus, for policymakers, there is no way of escaping from the challenge of planning, funding, developing, and implementing infrastructure projects. But that challenge is considerable, particularly for many less developed and developing countries, including those in Asia and the Pacific. Growing and legitimate concerns around environmental degradation and the adverse impact of climate change are providing additional headwinds for economic planners, as an emphasis on sustainability is mainstreamed into the policymaking processes of all countries. For countries with limited institutional capacity in those government agencies mandated to oversee infrastructure planning and operation, the task is a daunting one, and the resources that the private sector – both foreign and domestic – can bring are potentially key in determining success or failure. But the worldviews, priorities and incentives of the public and private sectors are quite different, and much of the challenge lies in finding ways to align them in a way that is mutually satisfactory, delivers the desired impact, and can be made sustainable over time. And this is particularly true around the issue of financing infrastructure.
Against the background, a new ESCAP book entitled “Infrastructure Financing for Sustainable Development in Asia and the Pacific” advocates for a holistic approach to be adopted on infrastructure financing, where both public and private sectors, as well as key stakeholders such as the United Nations, have significant roles to play in accelerating the pace of infrastructure investment towards the sustainable development agenda. Such a holistic approach to infrastructure financing necessitates the creation of a robust governance structure and conducive enabling environment that then delivers a more efficient and effective allocation of public funds, and creates a more solid basis for mobilizing private sector capital, from both domestic and international actors. For that purpose, governments need to consider how best to: i) allocate their own resources to support the Sustainable Development Goals (SDGs); ii) leverage the development finance architecture and related regional cooperation platforms to finance infrastructure; and iii) incentivize and harness private sector financing sources for sustainable development. The holistic approach should also help strengthen national and subnational capacities to develop and implement ‘bankable’ and potentially transformational projects, and to then manage, monitor and report on project implementation. This book specifically seeks to identify and discuss crucial and emerging issues in financing for sustainable infrastructure development, and highlight various important topics in the infrastructure financing ‘space’. They include: the roles and constraints of both public and private sectors; the potential of leveraging capital market for infrastructure financing; capturing externality effects to attract private sector investors and financiers; key issues regarding cross-border infrastructure development; and unique challenges and opportunities of land-locked developing countries (LLDCs) and small island developing states (SIDS) in financing infrastructure.
The objective of this side event is to share the findings, knowledges and recommendations derived from the new ESCAP publication “Infrastructure financing for Sustainable Development in Asia and the Pacific” with the policy-makers and experts who participate in the second session of the ESCAP Committee on Macroeconomic Policy, Poverty Reduction and Financing for Development. It also seeks to receive the future direction and new areas of ESCAP activities on infrastructure financing issues in the region.
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