Enhancing Connectivity_ ERIA 19Jul2013

7/27/2019 Enhancing Connectivity_ ERIA 19Jul2013

1/15

Regional Cooperation to Enhance ASEAN

Connectivity

Enhancing Connectivity through Multi-layered Regional Framework

Ministry of Foreign Affair, Thailand

Dusit Thani Bangkok, 19th

of July 2013

Economic Research Institute for ASEAN and East Asia (ERIA)

Fauziah Zen


2/15

Regional Cooperation

Financing Non financing

ASEAN Subset

cooperation

ASEAN+ scopeRecently

emphasizing on PPP


3/15

Direction?

Despite intersectional events, still lacking

efforts to following up and putting pieces of

works into synergy.

Different interests of countries resulted in

different pace of countrys advancement.

Different stages of development: different

perceptions, priorities, and actions.

Champion of Connectivity in ASEAN?


4/15

Challenges

Why does the infrastructure progress face

bottleneck?

Financing

Sources of Financing (domestic and foreign):

Sovereign

Private

Aid


5/15

Challenges

Sovereign including loans, should comply with

fiscal discipline.

Private finance only follows business rule:

profit-seeking with manageable risks.

Aid: limited effect.


6/15

Financing Problem?

YES. But its not on the lack of supply per se. Instead there are

quite abundant potential financial resources that can be

utilized.

More serious issues are:

6

regulatory framework, legal

certainty, appropriate

incentives.

Lacking investor

friendly

environment

poor preparation, lacking

competent human

resources, low fundallocated for Project

Development Facility (PDF),

lacking communication tointernational community.

Lacking properly

prepared

projects


7/15

Shopping List

PPP Challenges: Causal Nexus

ProjectPrioritization

Project

Preparation

Tender

Selection

Awarded

Project

Implementation

Poor Project

Preparation

Market bias

Selection bias or Fail

Poor risk

estimation

Failures

BAD Precedence


8/15Source: Fauziah Zen, ERIA 2012


9/15

Challenges

PPP or Private Financing requirements:

Good project (must be well-prepared).

Good preparation that requires capacity and

money. Building the capacity needs time, consistency,

persistency, money.

Problems:

Lacking allocated fund for project preparation.

Lacking champion and leadership.


10/15

Shopping ListList of important

Project

PPP Challenges: Causal Nexus

ProjectPrioritization

Project

Preparation

Tender

Selection

Awarded

Project

Implementation

Poor Project

Preparation

Market bias

Selection bias or Fail

Poor risk

estimation

Failures

BAD Precedence

PDF

Transparent &

sound promotion

Clear Criteria, transparent,

fair

Clear and Adequate

Fiscal Support

Successful

Execution

GOOD Example


11/15

Addressing the Challenges (1)

Project Prioritization:

Be consistent with

National Development

Priority

Manage fiscal issues

(support vs. liabilities)

Transparent process

Market sounding

Project Preparation:

This is critical part,

dont rush but work

timely.

Start with workable

scale and size.

Adequate funds, human

resources, and time.


12/15

Addressing the Challenges (2)

Tender and

Selection

Process:

Be transparentand time

consistent.

Contestable

market.

Awarding

Project:

Clear contract(output,

dispute

resolution,

timeline,

ownership, etc.) Sufficient fiscal

and politicalsupport.

Project

Execution:

Monitoring andEvaluation

Addressing

problems if any

Promoting

successful

stories.


13/15

Enhancing Regional Cooperation

Non-optimal individual countrys effort.

Improve cooperation from existing initiatives.

Establish a Regional PPP Center: Capacity Building

Technical Assistance

Intra and Inter Regional Cooperation

Promotion


14/15

Regulatory Framework


15/15

Thank You for Your Attention

[email protected]

Documents

Enhancing Connectivity_ ERIA 19Jul2013