Speech by Ms Indranee Rajah, Senior Minister of State for Law and Finance, at the Thematic Session on Infrastructure at the 11th ASEAN Finance Ministers’ Investor Seminar (AFMIS) in Jakarta, Indonesia
1. Let me start by once again thanking the Indonesia Ministry of Finance for organising this edition of the ASEAN Finance Ministers’ Investor Seminar, and for the opportunity to speak at this thematic session on infrastructure, alongside distinguished panellists.
2. Infrastructure development has long been touted as one of the key determinants of economic growth. The ASEAN Master Plan on ASEAN Connectivity or MPAC is a collective response of the ASEAN grouping to drive regional infrastructure development to boost international trade and financial linkages, amongst others. Coupled with the rapid urbanisation of the population in Southeast Asia, infrastructure needs in ASEAN are estimated at US$60 billion a year until 2020.
3. Currently, about 36% of population in Southeast Asia live in urban areas and this figure is expected to increase to approximately 45% by 2030. To support the rising demand for urban infrastructure and services, governments within ASEAN need to develop sustainable solutions to overcome problems related to utilities, healthcare and transport. The ASEAN infrastructure market thus holds huge investment potential over the next decade.
4. Given Singapore’s limited land area, planning for long-term sustainability that caters for economic growth and quality of life for residents is critical. We are also looking to enhance our infrastructure and develop sustainable urban spaces to create an outstanding living environment for Singaporeans and to reinforce our economic advantages. Key infrastructure projects in Singapore include the Changi Airport’s new terminal and runway, construction of the Thomson-East Coast MRT Line, and the Kuala Lumpur-Singapore High Speed Rail (HSR). The Kuala Lumpur-Singapore HSR is progressing well. Targeted to complete in late-2026, this cross-border infrastructure project is poised to be a game-changer that will not only improve the connectivity between Singapore and Malaysia but also further integrate our economies, giving both countries a greater stake in each other’s success.
5. Strong demand and detailed infrastructure plans do not automatically lead to projects taking off. A conducive operating environment and mobilisation of the relevant expertise and resources are required to translate plans into commercially viable projects. As investors value certainty over the long term, it is important to have consistent government policies and institutional frameworks that can stand the test of time. An effective public-private partnerships (PPP) programme, for instance, will be key to ensure the success of private sector’s involvement to co-finance and co-share project risks with the local governments. In this regard, I note that many governments of ASEAN Member States, such as Thailand and the Philippines, have set up national PPP centres to coordinate such efforts to boost investors’ confidence and appetite to participate in PPP projects.
6. Singapore, too, has been working closely with a network of partners to support the development of a strong pipeline of bankable infrastructure projects in the region. The Monetary Authority of Singapore is working with banks and institutional investors to develop infrastructure as an asset class to unlock and diversify sources of infrastructure financing. We host the World Bank Group’s first Infrastructure and Urban Development Hub to meaningfully integrate World Bank’s functions and Singapore’s expertise in urban solutions to structure and finance infrastructure projects. We also partner the Asian Development Bank to address infrastructure development challenges in ASEAN through the Asia Infrastructure Centre of Excellence; and like the rest of ASEAN, we are one of the founding members of the Asian Infrastructure Investment Bank, a key institution that will support infrastructure development in the region.
7. As part of Singapore’s Committee on the Future Economy plans, we are also looking to enhance our infrastructure ecosystem to provide more high-value professional services support for projects in the region. Singapore already has a vibrant cluster of companies that offer infrastructure advisory services in areas such as legal and finance, as well as global players like Hyflux, PSA and Sembcorp Industries that have strong track records in urban technical solutions and infrastructure project development. We hope to do more to facilitate successful collaborations to support regional economic development and strengthen ASEAN’s overall competitiveness.
8. Thank you.