The Asian Development Bank said Indonesia and other emerging nations, such as Pakistan, Bangladesh, Kazakhstan, Thailand and the Philippines, lag behind their peers in the Asia-Pacific region in boosting the role of private investors on infrastructure and development projects.
According to a new study commissioned by the Manila-based ADB, while overall prospects for public-private partnerships’ (PPP) remain bright, governments need to continue reforms and address capacity gaps in the design and implementation of effective projects.
“It is the capacity of the public sector to be able to react systematically to the complexities associated with PPP projects that will ensure long-term success,” ADB said on Wednesday in a statement accompanying the Economist Intelligence Unit’s study.
It also found that the Asia-Pacific region has seen a boom in PPPs in the past decade, requiring more effective public sector oversight agencies, and in some instances greater political will, to advance the process further.
“These emerging economies are moving swiftly to put in place the necessary laws and structures to attract more private investment,” the report found.
The study used a benchmark index system to rank the readiness and capacity of nations to carry out PPP projects.
“In order to leverage the $8 trillion required over the next decade for physical infrastructure in Asia, public financiers like ADB must undergo a complete change of mind-set and shift their focus from sovereign projects to PPPs,” Woochong Um, deputy director general of ADB’s Regional and Sustainable Development Department, said in the statement.
The assessment, carried out for 11 developing economies in the region, shows an increasingly open environment for PPPs, though with individual nations at different stages of readiness.