 Ten countries with a population of over 600 million and an estimated gross domestic product of two trillion U.S. dollars. The ASEAN Economic Community, initiated in 2003, envisions a single market and production base, allowing the free movement of goods, services, investments and skilled labor throughout a highly competitive economic region fully integrated into the global economy. In November 2007, ASEAN leaders adopted the ASEAN Economic Blueprint to guide the establishment of the AEC by 2015. Three years down the line, they adopted the master plan on ASEAN connectivity, aiming among other things to build infrastructure across the area that link goods, services and people more closely together. Fifteen priority projects were identified including the ASEAN Highway Network and the ASEAN Broadband Corridor. A year later, ASEAN Finance Ministers formally established the ASEAN Infrastructure Fund to help support infrastructure projects critical to the AEC. Now with the ASEAN integration just around the corner, the ASEAN Secretariat says some 80 percent of all action lines toward the AEC have been completed. But tough questions are being asked about the adequacy of infrastructure to realize this vision, not just the hard physical infrastructure, but also the soft institutional and systems infrastructure. Funding also remains a thorny issue. In the past, ASEAN's growth largely centered on highly developed areas such as capitals and financial centers. How then can the region ramp up infrastructure investment in secondary cities and less developed areas to fully achieve the physical information and communications, trade and human connectivity crucial to ASEAN integration, and attain a more equitable distribution of the benefits of development? Good afternoon. Thank you very much for joining us. We are definitely in the final stretch of the World Economic Forum East Asia. After this, just one more plenary session, but just a little more talk now so we all go home with a few more ideas and a little more inspiration from this convention. Hopefully it will be a very pleasant memory in a few days. My name is Coco Alquas from the ABS-EBN Broadcasting Corp here in Manila. We are now live on ABS-EBN News Channel ANC. Our subject this afternoon is infrastructure that without which none of this growth that we've been talking about over the past few days and none of this growth that we want to make inclusive can really happen. And we have a large but excellent panel to discuss that. Some of these men build and run that infrastructure. Some of them finance that infrastructure. It is my pleasure to introduce them all to you now. Let me begin with Minister Winshain. He is Myanmar's Minister for Finance and Revenue. Beside him is Stephen Groff of the Asian Development Bank, ADB. Beside him is Enrique Razon. He is Chairman and CEO of International Container Services Inc. Which operates more than 20 ports in the Philippines and around the world. Beside him is Mr. Don Lam, who is the head of Vina Capital in Vietnam. Which includes a Vina Capital Investment Fund, which we'll talk to him about. Beside him is Johan de Villiers. He is from ABB, not ADB. That's the Swiss Power Systems Builder. And finally, Mr. Mike Whalen of OPIC. Not OPIC, but OPIC. That's the Overseas Private Investment Corp. A US agency, which helps US companies invest abroad in Asia. The focus used to be on power. Mike will tell us that that's shifted a bit over the past few years. So that's our panel. Please join me in welcoming them. Let me begin by asking the minister. Ask Myanmar Open as Minister. What have been the biggest challenges that the government and the country has faced in terms of building this infrastructure? Thank you, Mr. Cuckoo, and thank you for everybody. Good afternoon. It is a great honor for me and to have a chance to explain about our real situations. So being a transition, being a country in transitions, we face both opportunities and challenges. We have implemented the reform measures agenda since the first March 2011, we took office. So now we change a lot. And also we would like to develop our country because we are far away from the international community for a certain time. So we need a lot. So we have to transform. That's why we would like to transform. We are implementing the transport agenda, political, economy, economics, and administrative structures and private sector reforms. According to these four reforms, I would like to introduce our economic reforms. Because we would like to develop our countries, we have to develop our economy. At this point, I'd like to mention that infrastructure needs is very substantial. In our country, lack of electricity, lack of human capacity, and lack of roads and some pave ways, something like that. So now we are trying to invite more investments to come into our country. All the investors pointed out that our infrastructure is very, very, needs are very, very, very big. So especially electricity, power, or energy. And we have our own labor, very cheap, but scale labor is very important. And then, our transport sector is also, we have to increase our existing infrastructures like roads, rails, and river systems, and so on. And also airport also. So being strategically located at the very Asian center point. So our memory can contribute to our neighboring countries. So we can provide the market access and also sums our connection to our neighboring countries. And also we are, as a member of the Asian countries, we would like to enhance our connectivity. We are the main points, because we are our neighboring borders, India, China, and we have to connect it to the East-West corridor, and Southeast Asia, and South Asia. So we are at the very strategically pointed. So we need to enhance our existing roads, rails. So that's why ASEAN connectivity will be enhanced. At the time, we won't like to enhance our capability, but the first and most important thing, difficulty is finances. Because we have a very limited budget, we have to, and also we have to maintain our physical principle, discipline. So that's why one of the needs is not covered by our government budget. Minister, very long list, right? I think you'll be getting some help soon, at least, from one agency, OPIC, represented here by Mike Whalen. Mike, you're telling me you're opening an office in Myanmar soon? Not quite yet. We hope to be open for Myanmar soon, depending upon our ability to identify acceptable labor conditions. But we're working with the U.S. trade representative in doing that, and we hope to have an announcement regarding our ability to be open to support U.S. companies investing in Myanmar very soon. We are, however, sending a representative to Bangkok as our only second in-field representative. And this is very much a reflection of the U.S. government's development finance institution trying to increase our exposure and support for the growth economies such as Myanmar in the Asia Pacific region. Could I ask Mr. Don Lam of Vienna Capital in Vietnam? First of all, I don't know. Do you invest outside Vietnam as well, or just within Vietnam? We do cover Vietnam, Laos, Cambodia, and Myanmar. Okay. Do you have any projects so far, any prospects in Myanmar? Not yet. We just opened the office there March 1st. So we are looking at some projects, but if you want to go a bit deeper, you know, Vietnam is a bit more developed, and I think the same issues faced with Myanmar. You need a lot of funding and financing for infrastructure projects, but a lot of projects are not financeable. That's a key problem. I think we are now working with Vietnamese government on what they're pushing very hard for is PPP, public-private partnership. But we pushed it back to them and said, look, maybe what you want to do is take one or two projects, package it, and make it financeable, then you come to the investor. Rather than a lot of government, what they, I wouldn't say a mistake, but what they tend to do is say, well, I have this 100 projects, please come and invest. It doesn't work like that. You need to package it. You need to make sure, you know, the investor will have a list of, say, 20 risks that they have to take off the boxes, and you need to make sure those risks are taken care of before the investor actually put money in. Mr. Razon, you've participated in what essentially are PPPs around the world. Is there something that makes Asian PPPs different, or PPPs in these countries that have been talking about different and more difficult than other countries you've participated in? Well, there's a misconception that every infrastructure project can be done by PPP. I think it's extremely limited what can actually be done by the private sector. Mostly projects in high-density areas, toll roads that will provide private investors adequate return. Maybe PORCH is one. When it comes to airports, which, speaking for the Philippines, is one piece of critical infrastructure that we need. It would be very difficult for a private sector investor to make a return on building the runways. The terminal is fine, but building this extensive runways of two, three runways would be very difficult to make any kind of return on that. And these are projects that should be done by the government. Rural roads, tourist roads, smaller, outlying airports. These remain with mass transportation systems. These are government projects, not for PPP. In my opinion, in my own business, in PORCH, it works because we do PORCH in the main cities, in areas like Manila or most recently in Melbourne. That's perfect for PPP, where it's a partnership. It's a concession. The government and the private sector share the revenues. But in places like Myanmar and in some aspects with the Philippines, Indonesia, PPP just won't work. When there's not a big enough market. There's not a big enough market. And for example, with rail systems or subways, for a private company to make a return, you're going to have to charge a very high rate to the traveling public. And it will be a political issue. These are the sort of things that should stay with the government. Mr. Lam, when you said that some of these projects are not financeable, why are they not financeable? Well, some of the reason we just talked about, again, some infrastructure project, it got to be in the government's hand because it's not... Well, you cannot make money on it. The IRR is just way too low. So therefore, from an investment perspective, it's not... The investment will not invest. The bank will not finance, so it's not financeable. So the ADB runs a $500 billion ASEAN infrastructure fund. Let's ask Stephen Groff how much of that has gone to Myanmar. Well, at the moment, none has gone to Myanmar. What? But of that fund. But we do have projects in Myanmar at the moment. In fact, we've just recently approved a power transmission rehabilitation program. We are working on some railroads projects. We're working on a couple of other projects as well. But I think this conversation on PPPs is important because I think, and I agree entirely with Don and Ricky, that I think one of the misconceptions about PPPs is that the public sector often just thinks that the private sector is going to come and do it. And any infrastructure project, any infrastructure project, has a public element to it. And either that is a public element in that the public sector has to finance it or it's a public element because there's a tariff issue that's related to it or there's a regulatory issue that's related to it or there's some kind of risk sharing or risk mitigation that the government has to be supporting and putting in place. So I think this is the real challenge that we have in the region is how do we accelerate the kind of private investment that's necessary in order to reach the objectives, the economic objectives of Zazian, but recognize the private sector is not going to come in and just, as Don says, take a list from the government and invest in all those projects that the government wants. It's a conversation, it's an exchange, it's mutual understanding about what the perceptions of risk are on the part of the private sector, what elements of that risk can be taken by the government or by other institutions such as our own. So there's a lot of different things that have to be put in place. Now, Johan De Villiers' company, ABB, builds power systems around the world. It's one of the top two or three in that sector. And we were talking earlier about how, when I asked you a question, you said what's more important really is partnerships. I think that speaks to this point here. Could you elaborate on that, Johan? I think in this infrastructure challenge in Zazian, no one party has all the answers. So it's a very diverse region, many different priorities, different levels of maturity in the different countries, and the projects are, by nature, very different. So no one party has the answer for any one of these solutions. So we've got to get together increasingly. And I think the World Economic Forum provides an amazing platform to make these collaborations and discussions happen. So it's to find the right mix and the right parties for each appropriate application and to come together and to learn how to work together. We're a technology provider, so this is our game. We want to provide the technology, and that's needed whoever the partners are, which is an important contribution. I'd like to ask all the panelists, why is there no template for different kinds of projects? Why does each project, at least the ones I know and cover, seem so difficult to develop and then to bid out, et cetera? This is for Secretary Abaya out there. Why is there no template for these projects? Why are they so difficult to get off the ground? Go ahead. Well, it's just like there are no two same people. Everything is different. Each of the circumstances in every country are different. ASEAN being what I would term a relatively protectionist region has different protectionist laws for an ownership, indigenous ownership, and so forth and so on. State ownership, in many instances, where the private sector is not even allowed to... You see this in places like Singapore where the most profit of both businesses are still with the government. But each project is different, different demand, different population. In our experience in 31 ports globally, every country has different circumstances. But I would strongly urge governments that this being sort of a golden era for financing, they should really take advantage of this. And this is contrary to my own religion, so to speak, but governments should be actually doing more of the infrastructures in the private sector. Coco, I want to underscore what Ricky just said, because it is true. And when you look out at the future, if we're thinking about the demand for infrastructure investment in ASEAN being about $950 billion between today and 2020, the governments are going to have to take a lion's share of that. More than half, 60% of that is going to be... At least 60% of that is going to be government investment. Now, that can be supported by institutions such as ours, but it's got to be... The governments are going to have an important role. And I also want to underscore a point that Don made a moment ago, which is the critical nature of bankable projects, of the fact that it's not just a question of making a decision that we think that this is a project we want to do. The process to develop it, the technical specifications, all the due diligence that has to be done in order to make it ready for investment is a huge long-term and long-lived process. So again, we talk about this a lot, but we can't. We're in the midst at the moment of what we refer to as the Asian financial crisis gave birth to an infrastructure crisis in the ASEAN countries where we've seen government investment drop by half since 1997. Private sector participation in infrastructure projects in the region is now only recovering to about two-thirds of what it was in 1997. So there's real urgency around this. I'd like to add, by the way, that I don't think the government should be actually running the infrastructure that they build. I think that the PPP should focus more on the O&M nature of these projects. So they can build the runway, but then the runway and private company operates the terminal and manages the airport for the government when the government makes a big share of the revenue. Mr. Lam, you were gonna say something? Well, I mean, one other thing that we are looking at and negotiating with the Vietnamese government is that as an investor, we don't like to build anything. And that means that we don't wanna build a power plant. It's just too much risk, taking too much time. But we said, look, why don't you build a power plant? And then you also signed the PPA with a company that you own, the electricity company, and then we buy it off from you. Because by that stage, the risk is taken off the project. So it's more investable, bankable now it's investable once it's all operating. Then you take all money and build the next power plant. So that's another way of looking at, it's essentially the government bill, but we buy it once it starts operating. When you've mentioned this, the government officials around the region and Mr. Son around the world, do they get it that they should build it and then just bid out the O&M? A lot of governments get it. In fact, the comments of Secretary Sings on yesterday were similar in that nature. Just something to keep in mind is the infrastructure that creates the most economic value. And the greatest social upliftment is sometimes these difficult projects. So we must be careful that, because there are models that work. Independent power plants is a model that's been replicated around the world many times. But we see there's a risk in some parts where we're constructing power plants, but because it's difficult to transmision and distribution in place, we're gonna have power plants that can't reach consumers. So we've got to take on these difficult projects and find ways to make them happen. Mike, when I introduce you at the beginning, I said that power used to be like the focus, but you told me that that's gone down in proportion at least, in part because- In this region, in this region for us. You know, infrastructure comes in many different flavors and variety. Obviously energy infrastructure is a huge component of that. The requirements in the ASEAN region are expected to increase 76% from a demand standpoint for electricity until 2030. And it'll continue to be an important part and OPIC will play a major role in IPPs, which is a lot of our activity in Latin America, in sub-Saharan Africa, where we're making a very large push to present broad-based electrification. What we are seeing, however, is there are other forms of infrastructure that need to be looked at. Social infrastructure, in addition to the hard infrastructure of road transport and logistics. Those are serious issues as well, but to underline what Stephen said earlier, PPP is all about risk sharing. And if it seems as if it's difficult or it doesn't come in a single flavor, a simple template, it's because the discussion of risk sharing is a complicated one. So PPPs are hard. OPIC's view is certainly that they're essential, however. If you look at the capital requirements needed to achieve the investments in infrastructure, social infrastructure, energy infrastructure, transport infrastructure in the ASEAN region, it cannot be done solely through government-supported financing and through even local capital markets in some circumstances because of the level of financial capacity that exists. It will require foreign direct investment. And for there to be foreign direct investment, it requires a sustainable investment environment, including project selection for these types of activities to attract what should be very low costs of capital, which are available to fund these investments. I hope I didn't misunderstand you earlier, but did you kind of indicate that there's less of a demand in effect for your money here for certain projects than you might have thought? Well, I would express it this way, which is OPIC tries to be additional to private providers of capital. And where we see requirements for conventional energy, financing for conventional energy projects, we see a fairly robust model working, as has been mentioned, in an IPP structure, which is very successful. So if we're not required under those circumstances, we will not necessarily deploy our capital in that fashion. We're the patient capital, the lender of the last resort who is able to support transactions, which might not otherwise be able to get done. Having said that, where we've seen a lot of activity in the power sector has been in, for instance, clean energy. So we have increased our clean energy commitments 100 fold over the last five years. So we're seeing still a huge amount of power activity, but maybe different types of power generation activities than we might have done 10 years ago or 20 years ago. Minister, let me ask you, when you hear all this talk about financing, how does that relate to Myanmar's experience? So Myanmar, so now we have some discussions about our financing. So according to the Mackenzie report for Myanmar, so about 320 billion US dollars are required for our infrastructure developments. It's a very huge amount for another 15 years to 2030. So how we can manage about this huge amount of money to develop for our infrastructures. That's why we consider to go to BPP or maybe privatization or something like that. So this is a very huge amount. So that's why we are trying to change our, maybe all the time we consider all the projects have to be done by our government. Now we change our mindset. That kind of goes against what you said about religion a while ago. He's saying that the government used to do all the projects. Now they're gonna do more PPPs. How does that square with what you said earlier, Mr. Resan? Well, there's the obvious infrastructure projects that are better suited to the private sector, which are power plants, for example, like I said, ports. But these are the things that Myanmar needs right now. Other countries have gone further along the road in these sectors. So a country like Myanmar with the right legal structure can attract a lot of interest in the power sector, in the ports, and in other areas. Is the legal structure, whether in Myanmar or other countries, is that a main roadblock for you? Well, if you're talking about foreign direct investment, definitely the foreign ownership is an issue and the state ownership is another issue. So those are the legal issues. Did you encounter the same issues, Mr. Lam? Well, for Myanmar, we're just starting, so we didn't really go into depth yet. But in Vietnam, at the moment it's quite open. Most of the infrastructure asset the foreigner can participate is not an issue for us at the moment. I think, Stephen, you were talking about statistics a while ago. Did I get the figure right that at least ASEAN needs about $60 billion a year of infrastructure investment and you said that it's only getting about half of that? Yeah, I mean government investment and private investment infrastructure, about half of what it needs to be in order to meet the demand as we forecast between now and 2020. But I think there's also, this is talking about just investment needs, which are critically important, but we also covered the need to develop bankable projects and how important that is. But there's also critical innovations that we have to be addressing and focused on. And I would identify those as project structuring. We've talked a bit about that. We need innovations in governance and how do we get the public sector to work properly in order that it understands what the needs and demands of the private sector are so they can facilitate that kind of investment. We need innovations in municipal finance. If you look out at the future, what we have a fastly urbanizing region, Asia as a whole. We have 120,000 people moving into cities every single day in Asia. The urban population in ASEAN alone will double between now and 2050. So municipal finance is a huge challenge and we need to find ways that we can innovate municipal finance. Capital market development is critically important because we can't develop the capital markets in the region. If we can't deepen the capital markets region, we have banks that are pulling a long term finance for infrastructure has often come from banks in this region. Banks are with Basel III and Solvency II, banks are pulling out. So capital market development is critically important. And lastly, regional financial integration is a linchpin here too because if you can't find ways for cooperation between these countries, we're just not gonna realize the full potential of ASEAN. I forgot, I think it was you who said that you are opening in Myanmar soon, right? That's right. Could you tell us about that project? Yeah, I mean we wanna grow with Myanmar. So we're starting with small projects. We're opening an office there beginning of next month. So and we're very happy with that. And we've been participating through partners in the country. I think we can play a very important role not just with rolling out new infrastructure but around the region I'm seeing so much that we could do with the existing infrastructure. So to help with upkeep renewals, improvement programs, energy efficiency programs. I mean that's a major topic in the region. I found that very interesting when you were talking about energy efficiency a while ago. Obviously not as sexy as building a power plant but you said as important. It's not as visible. So sometimes we go for these very visible infrastructure projects but in the International Energy Agency report says that only 15% of the economically viable projects today in energy efficiency is being exploited. So that's an incredible opportunity. I mean just one product from our company of variable speed drives in 2012 saved the equivalent of 50 nuclear power plants every year. So an enormous opportunity. And I see in ASEAN that we've got to keep this balance. There's a huge need for new infrastructure, the visible projects, but we've got to make sure that we address regulation that encourages energy efficiency. In one of the other sad statistic is that the coal-fired power plants we construct today in ASEAN is at least 10% less efficient than the same power plant in Japan using the same fuel. And we have to have a balanced mix of plants but if we're going to build a coal-fired plant let at least make sure that it's an efficient one. Since you freely plugged a specific product there, I hope you don't mind if I put you in the spot a bit. Could you tell us what's your fastest growing market in Southeast Asia where you don't have a power plant? Well for ABB the fastest growing country at the moment I think is the Philippines. So we are growing very rapidly in the Philippines supplying products, supplying technology, supplying services, supporting the infrastructure. When are we going to get a manufacturing plant? Manufacturing plants, I mean, we want to be as local as possible. So in every country where we see sustainable business and a sustainable market, we are opening factories and we want to be local. And there's many benefits from being local. I mean there's knowledge transfer, you are able to look off to the infrastructure that you've put in place. So it makes it sustainable and I mean it's the only way to really understand the local context. So we want to be as local as possible but you can't be everything everywhere. So it's got to be linked to sustainable markets. And I think the wonderful thing in ASEAN is the diversity. So which helps not to have overlap between the different countries. So each country can play a different part and I think that sees a lot about coming together and integrating. How much more money Mike is going to flow into Asia or Southeast Asia from agencies like OPIC in the next few years, you think? Is it going to accelerate? Well, I think it is. Just based upon the underinvestment in infrastructure which has been slowed down in all of the parts of the world as a result of the financial crisis. So I think we are going to see obviously strong multilateral presence already that exists in Asia but I think that's going to continue to increase. What we're also seeing as well is is going back to this question of creating the enabling infrastructure. We're seeing an opportunity to catch up a little bit in the private sector participation in comparison with other parts of the world. Latin America has also been under investing in infrastructure. Interestingly enough, they've been able to attract however a higher degree of private participation in their sectors by having suitable enabling environments in Mexico, Peru, Chile and Brazil to name some of the lead economies. These regulatory environments we've been talking about, right? Correct. So they have been able to attract even though they have still been underspending relative to the percentage of GDP which many say should be about 5% of GDP as a total target for infrastructure investment and the Asian economies have been averaging about one to 2% as the Latin American economies have targeting two to 3% but the amount of capital that the Latin American economies had been able to mobilize has been greater. I think that's the opportunity zone that would exist for the ASEAN nations and being able to increase that private sector participation. Mr. Rezón, you earlier said that each project is different. I guess each country is different as well but do you see some distinction in terms of regions or continents in terms of regulation and dispute resolution, bidding systems, et cetera? Like I said, Mexico is, I think, one of the countries that is ahead in sophistication in the legal structure, transparency and financial ability of projects. I think they've been very good at what they do and projects have moved rather smoother there than other regions. But again, it's really what sector is, is financeable at the time and very large projects that have a lot of public service involved may not necessarily be the right deterrence so they take a long time to get these projects off the ground. Very long to finance, very long to put the project components together. That's why you have projects taking 10, 15 years. But the more profitable ones where the private sector will go after right away are the ones that move much faster. I think I know the answer in your case, but I'll ask both of you, including Mr. Lam. There's no shortage of money that wants to be invested, right? No, I mean, there's a lot of investment, investors looking at this region want to invest. There's plenty of money. It's just that, like I said, there's nothing is bankable or investable sometime. So I think one of the discussions we had on the panel some time ago yesterday was that they should be looking at maybe an ASEAN sort of code for bidding for infrastructure development so that because each country is different, we don't have to be 100% standardized across ASEAN, but it could be, you get up to maybe 80% there. It's already saving a lot of time from a lot of major institutional investors that's coming in from Europe or US want to invest in this region. It saved them effort. Make it easier for them to actually participate. So one way is for ASEAN to get together and make sure you have this standard code. Just before you answer that, let me just tell the audience, I'll have Steven answer this, but we're ready for questions. If you have any, please just stand up or raise your hand and somebody will come to you with a mic. Go ahead, Steven. Yeah, just on that point briefly, I mean, Asia as a whole, but ASEAN as well, is a saving surplus region. There's large reserves in the region within the governments. These savings, these reserves are invested in low-yielding treasury securities in the US and in the Eurozone. Because there's no, because capital markets are not developed in this region because there aren't alternatives to turn those reserves into productive assets. And so this is a critical challenge for the region because you can take money that you're just sticking into treasury securities and otherwise find ways of mitigating and developing that and investing it in productive infrastructure in the region. And that's the critical challenge that I think the region really faces. And this is how you've seen infrastructure development happen in the developed countries of the world. So I guess the frustration is there's money to be invested. You yourself, Mr. Lam said you want to invest more in Myanmar, but the structures aren't there to support that. Could I ask the minister, what's the main challenge in terms of getting the rules in place? So it's very important. So in our reformaceous, the administrative and the administrative reform in the HHS is also very important. So innovation and also our, we want to change our systems at the time. We, the most important thing is we have to fulfill our hopes with our, we have had to be good prospect. And also we have to concrete whose regulations are procedures we should have. But sometimes we, our relations are very updated. So we have to review it. And also we, sometimes we have to amend and sometimes we have to delete it. And so sometimes we have to edit the new one. So rules and regulations are very important, but we have to get some assistance from international institutions because sometimes we are away from the outside, so we want to get more knowledge. So that's why the rules and regulations are very important and we want to get, to get in line with the international back practices, but we need to get assistance from the international institutions. That's why. Johan, you don't bid directly for many of this project. You supply the companies that bid for these projects, right? We have many different ways in which we supply into infrastructure. I mean, almost every part of economic infrastructure has electricity and our components behind. So when we talk about transmission and distribution, we often supply directly to utilities. When you talk about construction of power plants and so on, we supply to EPC companies, companies who take the overall project, the construction of that, and we supply the core components into that. Same in the renewable space. We have key technology, but not the overall project. What would be most helpful for companies like yours? What would be most helpful in terms of investing in a CN infrastructure or expanding a CN infrastructure? I think one of the things that's key is these compelling visions and plans for a country. Where do you want to go? And then making sure that the infrastructure plans fit in with that vision and make sure that that is clear and that that spans beyond political cycles, which is often very short. I mean, we talk about 30, 40, 50 year investments we're making. Then regulation is very important. That we have regulation that encourages the right capital to flow to the right infrastructure investments and subsidies is a major issue. I mean, it's not subsidies per se, but it is to make sure that whatever we do encourages the right behavior and capital to flow to the right places. And I think in the region, in many parts of the region, subsidies are not helping us with that. And so the frustration for me is you know the money is there and you also know the effect, the positive effect if the money were invested. You were telling me a while ago, we had some examples of how electricity changed certain communities. Yes, I mean, it's often not that visible for us because we don't often deal directly with the public, but yesterday morning, we had a session on solar power and Mr. Jim Ayala was there sharing some of the stories that just from the Philippines and that touched my heart in a way because he talked about a school in a certain region and that school consistently came lost right at the bottom every year. And they had no access to electricity. Then with a small solar power plant, they provided electricity, powered up some computers and within two years went to the top. And you think of the human capital that is not fully exploited in the region by not providing access to electricity and in a staggering fact to me is in ASEAN, 50% of households still cook with biomass. You know, so enormous numbers. So we have a very large task to make a difference in people's lives. He was talking about mothers giving birth by the light of a mobile phone and infant mortality rates mean dramatically improving when electricity is provided. So we can make a great difference. Again, before you answer that, wait, let me, Steven, you answer that and then we'll call on Noel. Again, just to second what Johann said, and I think it's really critically important because we all too often in this region, in the world, we see vested interest masquerading as national interest and we need to do much better at distinguishing between those two things. And then lastly, just on the point of how we mitigate and how we use these savings. You mentioned our ASEAN infrastructure fund, which ADB is supporting with the ASEAN countries. And this is actually aimed at trying to find ways that you can use the savings in the region, these reserves and have those invested in productive assets. It's very small at the moment. It's sort of experimental, but it's an effort on part of all the ASEAN nations to try to figure out how we can move this forward. Mr. Arizon, both here and abroad, how do you navigate or negotiate with these governments who use vested interest masquerading as national interest? Well, that happens all over the place. We do business in Africa, Latin America, Asia, and that's part of the landscape, so to speak. And I'd say India, for example, is a very difficult place where you experience a lot of these type of things. As an investor, are there countries? I'm not gonna ask you to name them. Are there countries you write off because you figured out it's just too difficult to invest there? Well, with us, we try to stick it out and be able to operate in any environment. I mean, we stuck it out in Syria for years until finally having to pull the plug. But there are a few, actually, that even us avoid. Noah, please introduce yourself and tell us who you want to ask that question of. Noel Bonon. Noel Bonon from KPMG. My question's addressed to Stephen. Stephen, about the Asian Infrastructure Fund. Now clearly, the private sector, when they get into infrastructure projects, have different goals that you mentioned, bankability. In the case of the Asian Infrastructure Fund, which is directed to governments, clearly governments have a different mindset when going to infrastructure projects, so it's just public service. Several questions about the Asian Infrastructure Fund. What would be the main criteria for a country to access the infrastructure fund? Number two, what is the acceptance level among governments of the Asian Infrastructure Fund? And number three, what would be the correct, what would be the ideal or optimum mix between a country's own out-of-pocket funding versus its tapping into the fund? On, say, specific projects. Would there be an optimum percentage of capital versus loans from the fund? Thank you, it's a great question. And to the last part about Optimal MISC, I think we'll go back to Ricky's point that, you know, there's no twins here as far as these individual investments are concerned. So it really depends on the individual project. It depends on the circumstances around which that investment is being made. The acceptance of the fund itself is very high. The governments are quite keen and very, very supportive of this initiative. But again, it's very small. It's about $485 million at the moment. All of the member countries have made contributions to the fund. ADB has put $150 million into it. And really, we're starting with small, supporting smaller projects or taking small slices of bigger projects in order to test this idea and get a track record in which we could use, then, to go to the capital markets directly and raise bonds and get more funding. Well, of course, there's due diligence that goes into it as it would go into any project that we do. So it's, I mean, it's infrastructure. It has to have some kind of connectivity element to it. And lastly, it's got to be bankable. It has to have a financial and economic return. Did anyone want to add to that from the panel? Okay, I think we have a question over here. Astrid Tuminas from Microsoft. I'd like to address the question really to anyone who'd like to answer this. So when I think about accelerating ASEAN infrastructure, I think about Singapore, whose infrastructure can compete with the best out there, whether it's the airport or an integrated petrochemical industry, water, et cetera. So if there are any lessons to be drawn from that, and understand there are differences among countries, but if you think about a case study, we do have a pretty clear-cut case study. So what would you say there's one thing maybe that really is salient from that story of one city-state that did the infrastructure thing correctly? What would you say? Thank you. Whom are you asking that of? Maybe Steven could begin. Steven again. The next question cannot go to Steven. Yeah, yeah, I won't say anymore. But I think, again, it goes back to the list that I put out earlier. It goes back to good project structuring, good governance and understanding and communication between the public and the private sectors. It goes to municipal finance. It goes to deeper capital markets. And it goes to just general dependency. Singapore is dependent on the region. It exists as a small city-state within a bigger region. And so they, of any ASEAN country, understand the incredible necessity of interconnectivity. Governance, it comes down to governance. LKY, Lee Kuan Yew. That's all. Leadership. Light is in my eyes. Is this Amina? Yes. Question over here. Thank you. I wanted to ask, Mr. Viggen. Could you introduce yourself to the audience? I'm Amina Rasul from the Philippine Center for Islam and Democracy. And I come from an island province of Sulu. Most of the people in Sulu have never had electricity. What you said about using the light of the cell phone to when somebody's giving in childbirth, that happens in Sulu. How do they charge the cell phone? When they come to the capital towns, in these areas, they pay 20 pesos, that's half a dollar, so that a boatman can bring their cell phone to the town that has electricity to be charged. Most of the big areas all over East Asia, especially ASEAN, where this reality is the case, but governments don't really invest in infrastructure for power or for water because it's not cost effective. And my question is, do companies like ABB look at this mass of people who are disenfranchised to look at the possibility of small, cost effective products and services that could provide them with water and electricity, solar being one among them, but I understand that the solar may not be that efficient. So is there anything else that would be possible to provide infrastructure to areas that have never had them? That is the mission of our company and that's what we spend our R&D money on us to make sure that we make this more efficient, more effective, cheaper, more affordable, creating more value. And I think we need both. We need the traditional large grit developments, high capacity transmission links because there is efficiency in that. And at the same time, we've got to be working at getting electricity to rural communities. And in ASEAN, that's a particular challenge because we have so many people living in remote areas. And I mean, very recently our company made a one billion dollar investment acquiring a company with key solar technology that we can combine with our portfolio. And one of the things that would do is it would help us with key technology to support exactly the sort of smaller scale micro grids, electricity provision into remote areas so that you don't have to wait until the grid reaches there and eventually you can still integrate that with the grid and get the benefit of efficiency. But again, as I said, we must make sure that it's not that cheap for other unfriendly technologies to not help us bring electricity, kerosene subsidies and things like that, to make sure that there's a reward for investing in electricity and sustainable power supplies in these communities. Mr. Rizwan, correct me if I'm wrong. Were you thinking when you asked that question, why hasn't someone created a small enough gen set that they don't need to transport? I was wondering if they have the cell phone light, how did they charge the cell phone if there was no electricity? Why no one seemed the opportunity to put a cell phone charging station? Actually electricity I think is on its own will probably develop on its own, solve itself because companies who are in the power generation and power distribution business do make money and I guess that sector is probably attracting the most investments of all sectors. Also the most political attention. Also. But that's what you were saying Mr. Villiers about subsidies and that kind of thing. You would rather they don't exist because it will find a market, right? The market will find it rather. I don't know, but that's the answer to everything and there's regulation needed because you can imagine that if you start with a few homes connected to a solar power source and when in the village, that immediately creates demand and as this scales up, who will then eventually run that infrastructure and does the regulation allow for an entrepreneur to come and run that infrastructure which in the maintenance needs and because there's no fuel that is supplied, you go and install this once and the maintenance needs is totally different from a normal utility. So are we thinking about regulation that will allow entrepreneurs to start running and collecting fees for infrastructure like this because it could really change the livelihoods of people? We will ask the appropriate the Philippine Government official that and I'll get back to you on that. There was a question here also in the first row. Could you please introduce yourself and tell us who you want to ask? I'm Burab Surin from Mongolia. There are some initiatives to create a new bank, Asian Infrastructure Bank. There are some nations in which it's invited to be the founding members, some not, I think. There's a question on Mr. Krove. Again, is there some coordination to avoid overlap between ADB or some new bank or it's in change for you? I said the next question couldn't go to Stephen. Before you answered that, Stephen, could I ask if there's another question and then we could perhaps ask them together? Anyone else? Okay, Karen Davila. But my questions for Mr. Razon specifically are you satisfied with how the government is spending for infrastructure in the Philippines and why do you think hasn't the President's PPPs taken off as expected? Well, it's a very slow and tedious process to get such a massive program of the ground and it's understandable that people are impatient but the government actually is spending more and more. They could spend more on roads in Meadow Manila than they are. I think they should spend more in that type of infrastructure. Of course, one the biggest, I'd say the 800 pound gorilla in the room is a new airport. But you know, governments all over the world work this way. It takes a long time to get these programs off the ground and once momentum starts, then usually they start moving along at a good pace but to get to that point, we have to be very patient. But I believe that they are allocating more and more funding in the budget. The government can certainly afford it now, although sometimes we still have that mentality for the past that we can't afford this type of infrastructure when in fact we can now. Nowadays I said it's almost nearly a golden age for financing, especially for governments. And our government in particular is investment grade. Cost of funding is very cheap at the moment and we can do it. And you just have to be patient. Governments take time. Okay, so we veer away a bit from the Philippines. Stephen, could you answer that question about the... Very briefly. At the APEC summit last year, President of China Xi Jinping announced their intention to set up an Asia Infrastructure Investment Bank. And our basic opinion on this is that the demand for infrastructure investment in Asia is huge. It's $8 trillion between now and 2020. So there's plenty of room for other financiers, other investments. And so we'd be happy to work with this institution if and when it is established. Okay, we're running into the last five minutes of the session. If there's any more... Okay, there's one question over there. I think that's... Is that Ed? Yes. This will be our last question, then we'll just wrap up before we go. It's more, I guess, it's a question for the other countries because... Could you introduce yourself to the audience, please? I'm Ed Francisco from BDO, a local bank. I guess we're fortunate here to have the liquidity and the funding available from the private sector. So for us, it's really more getting the projects out. And I agree with what Mr. Rason said about the government should just build it and then it can get funded through ODA or from the banks. My question is how can the other countries learn from this because it's more the institutional buildings that's necessary at this point. Funding is plentiful. It's really what can you do, I guess, the web and the rest of the country so that you get the projects out faster? Funding is not the issue. And even a new bank may not meet the necessary because the funding is here. Maybe equity for equity and for hybrid, for mezz fine for the senior secured, it's all available. Thank you. Was that the questions directed at someone specifically, Ed? I guess for the other countries so that they could... How can we help each other? Yeah. Funding? Could I ask Mr. Lam? I didn't really hear the question but in terms of we're talking about how quickly get the funding out and so on. One of the things that Vietnam do a lot of now is just privatize the infrastructure asset. So that's the quickest way for the government to get the money in and then use that money for the new infrastructure project. How many percent of those end up in a dispute? I'm sorry? How many percent of those end up in some kind of dispute? Dispute? Yes. Rival bidders disputing each other. Not many so far. So you find that the bidding was structured properly? I believe so because we did participate on a number of these. Water treatment plan, power plan, they do privatize. And then, I mean now we even negotiate with one province where we said, look, what if you privatize that water treatment plan? You're using all money and then you expand into another project or let us expand on the existing plan. So that's one way for them to quickly get the money and do some of the things. Okay, so let me, as we wrap up, let me ask each of the panelists for just a one minute comment. Let me ask, let me begin with the minister. Minister, from the discussion today, it seems like the money is there, the problem is the regulations aren't. How quickly do you think Myanmar can act on those kinds of concerns? Very good questions because we have a very, we lessen lands from others. It's very important for us because sometimes we have to reluctant to do rapidly because we would like to see what's the problems or what's the experience for the others. But anyway, now we are trying today why I got so many lessons from all the past events. So our country have to move forward. So we need some persistence to do these all the things. But anyway, we have to do rapidly or sometimes we have to take care about that. Sometimes we have to take the quick win is very important. Sometimes we have to take to see for the long run. So for this matters, we want to develop our infrastructures. Now we have to do first. Okay, thank you very much. Could I ask Steven, how is the ADB helping Myanmar and other countries work on that list that you are recited to us earlier? Well, we do it through a number of different avenues, largely through our lending windows. We have concessional lending. We have market-based lending. We also have significant technical assistance resources that we bring to bear at advising and helping our governments work through some of these challenges. But I think why we're talking about this and why it's important is that infrastructure and the provision of infrastructure underpins the ability of the region to address the critical challenge it faces with respect to inclusive growth, with respect to still there's a huge number of people that live in this region that are mired in poverty. So we have a moral imperative here. We have a social imperative here because the longer these people live in these dire circumstances, the more social unrest can occur. And lastly, there's an economic imperative. We don't address these issues. The kind of growth that we're seeing in this region will not be sustained. And so if we want to see it sustained, if we want to see this region succeed, these kinds of investments are absolutely critical. Mr. Razon, let me ask you. What's the one thing or the most important thing that governments have to learn and apply in order to accelerate infrastructure? Well, the structure of projects, whether they're government or private sector or PPP projects, is to structure them properly from the beginning, both the legal basis, the project components. And to beef up the capability and the talent within the government to execute such projects. Is that the main difficulty that they don't have enough experience yet in crafting these? I think the government, aside from, because that's part of infrastructure as well, is capability. And the government needs to invest in their project capability, whether it's execution, whether it's project review, decision-making on what projects are priority, financing of the projects. I mean, this all involve capabilities and human resources, and which is a key component of infrastructure in the government in itself. Mr. Lam, what would make it easier for investors such as yourself to invest in infrastructure projects in the region? I think the thing to make it easier is, again, we should, the government should look at not giving us a hundred projects, but just focus on a few key ones and just make sure it's bankable. It's like you're packaging a product. So that once a product is packaged nicely or wrapped up, then you can bring the investor in. It's more bankable. Mr. De Villiers, as a supplier, what would make this, this the SDN infrastructure expansion more profitable and more efficient for you? I'm not sure it's a question of what we take from it. We want to create value in this. And I think I'm impressed with, I mean, there's an enormous opportunity to make a difference in this region. And we want to do that. And I think there's a sense of urgency that is clear. We need to do this quickly. So we know what to do, technology is available. We heard that finance is available. So, I mean, we have to act with courage and with conviction. And so balance the amount of time spent discussing and talking and taking action, the specific action. And maybe one last point is that we need to do this sustainably because we are leaving a legacy for the future generations. And the way in which we invest in the infrastructure projects we choose today is either going to hold our future generations back or it's going to accelerate them in their growth path. Could you give us an illustration of how much you spend or what you do in terms of R&D in order to develop new technologies or more affordable technologies? Well, we have a global program of R&D spending literally billions of dollars in R&D, collaborating with universities right around the world in every aspect of infrastructure investment. And that's our commitment to continue to do that. That is the DNIFR company. And finally, Mr. Whalen, for agencies such as yourself, what would make it easier for you to be able to help places like ASEAN develop their infrastructure? Well, nobody makes it easy for us. That's not our mission. But I think what we're hearing in the audience and on the panel is the tension that exists between getting it done fast and getting it done right. And getting it done right takes a lot of effort to be able to do it in a fashion which is repeatable and sustainable. But certainly for OPIC and for any other official agency, be it ADB or be it the potential of the Asian Infrastructure Bank, it's very important when we're thinking about this to make sure we're doing it in a fashion which have safeguards in place for local communities, for the environment, and for workers who work on these projects. And also to make sure that they're reaching out. Singapore is a fantastic model, but the problems of Singapore as a relatively compact island are different than the problems of an archipelago as such as the Philippines or Indonesia. So we exist at a golden age of financing. We exist at a golden age of innovation in terms of where we do have technologies that can create the networks that can go out to these communities. And that's another thing that we have to keep in mind as well. Ladies and gentlemen of the audience, please help me in thanking our wonderful panel today. And thank you, and thank you for joining us. And thank you to our audience for joining us. My name is Kojo Alquass from ABSCB Incorporation here at the World Economic Forum in East Asia. Thanks for watching.