PM Lee stresses need for infrastructure schemes

BUENOS AIRES • Infrastructure schemes are welcomed, especially by developing countries in Asia, because most countries and international financial institutions are not able to pay for needed infrastructure on their own, Prime Minister Lee Hsien Loong said at the Group of 20 Leaders' Summit on Saturday.

He was referring to programmes such as China's Belt and Road Initiative and the US' Better Utilisation of Investment Leading to Development (Build) Act, which will create the US International Development Finance Corporation.

"It is beyond the means of governments to fund all the infrastructure they need. International financial institutions like the World Bank will have a role to play, but they won't have enough resources either," PM Lee said in a brief speech during a session on infrastructure, energy transitions and a sustainable food future.

His comments come two weeks after the United States and China sparred over their infrastructure financing plans at the Asia-Pacific Economic Cooperation (Apec) summit in Port Moresby.

Then, US Vice-President Mike Pence warned of plans that drowned countries in a sea of debt or coerced them to give up their sovereignty, without naming China.

Chinese President Xi Jinping said his country's Belt and Road Initiative was based on partnership and cooperation, and would not exclude anyone.

In his speech, PM Lee made the case that infrastructure development is a pressing need for all countries, and discussed ways to increase infrastructure investment, particularly from the private sector.

 
 

He cited the Asian Development Bank's (ADB) estimate that its developing country members will require US$26 trillion (S$35.7 trillion) in infrastructure investment from now to 2030.

Developed countries also need to maintain, upgrade and replace their existing infrastructure, he said.

PM Lee also spoke about attracting more private sector funding to infrastructure, which he said has so far realised "only a fraction of its potential". Part of the problem, he said, was insufficient resources.

Another challenge is to mitigate risks and to make it more viable for the private sector to participate.

The issue of encouraging more private investment in infrastructure projects was addressed by G-20 leaders in their statement released at the end of the summit, which endorsed a road map on ways to do so.

Argentina's President Mauricio Macri said at a media conference after the summit: "Without both physical and virtual infrastructure, there is no fairness, no inclusion. We are looking for new mechanisms, superior assets to promote investment in infrastructure."

Finance Minister Heng Swee Keat said the G-20 finance ministers recognised that infrastructure is key to enabling emerging economies to continue to develop.

They discussed creating investment products which are investable and bankable, he said in an interview after the summit on Saturday.

Mr Heng referred to Singapore's Infrastructure Asia Office which was recently set up to develop, finance and carry out infrastructure projects. Among other things, the office matches investors with projects according to their risk appetites.

"I spoke about our infrastructure efforts and how we are trying to bring the demand and supply side together, and I am glad many other ministers also spoke about that and will support efforts in this area," he said.

"I also spoke about how we need to make infrastructure more resilient in dealing with, for example, climate change and ensuring that it can maximise returns on those infrastructure," he added.

High-quality infrastructure investment will be one area of focus for Japan, which takes over as G-20 chair next year and will host the next summit in Osaka in June. Saudi Arabia will chair G-20 in 2020.

 
A version of this article appeared in the print edition of The Straits Times on December 03, 2018, with the headline 'PM Lee stresses need for infrastructure schemes'. Print Edition | Subscribe