Statement by Minister for Finance Heng Swee Keat, Governor of The Republic of Singapore at The 2nd Annual Meeting of the Board of Governors, Asian Infrastructure Investment Bank in Jeju, Pepublic of Korea17 Jun 2017
I would like to thank the Government of the Republic of Korea for hosting the 2nd Annual Meeting of the Board of Governors of the Asian Infrastructure Investment Bank (AIIB), and President Jin Liqun for the excellent meeting arrangements.
2. I would also like to welcome all new prospective members of the AIIB who have initiated commitment to the Bank’s mission of fostering sustainable economic development and improving connectivity in Asia by investing in infrastructure and other productive sectors. Singapore looks forward to working with regional and non-regional members to build on the remarkable progress made by the Bank within the first year of its establishment.
3. Congratulations and thanks are due to the AIIB management and host for focusing this year’s Annual Meeting on the theme of “Sustainable Infrastructure” – a timely topic that is in line with ambitious goals set by the international community through the adoption of the 2030 Agenda, the Sustainable Development Goals (SDGs) and the agreement on climate action at COP21 in Paris.
4. Sustainable infrastructure is a rich subject matter that is galvanising the Bank and its members to come forth to exchange unique circumstances, relevant insights, and common lessons that can benefit all members in our shared progress towards environmental and socio-economic sustainability for our societies.
5. Environmentally sustainable infrastructure is a matter of making the best responsible use of the resources we have and caring for the state of the environment. It not only limits pollution during construction and operation, it is also resource-efficient and takes climate change impact and extreme weather events into account.
6. Socio-economically sustainable infrastructure is a matter of creating and delivering the benefit of sustainable resource use to the people. It supports inclusive growth by contributing to enhanced livelihoods and social wellbeing as well as access to basic services such as water, sanitation and clean energy. It should also help to create jobs, strengthen employment and build capacity.
7. Taken together, environmentally and socio-economically sustainable infrastructure are a mission of care – for the planet and for the people, over generations. It is an urgent matter relevant to all the Bank’s members as each country faces the effects of climate change, urbanisation, technology changes, and demographic shifts. When the cost-benefit analysis is rigorously conducted, the elements of responsibility, efficiency, and inclusiveness are evident to investors, stakeholders, and the public alike, winning sustained support from the people for such projects.
8. Well-scoped sustainable infrastructure projects are bankable and fiscally defensible from the investment perspectives of both public and private sectors, without the imposition of high costs on users. Sustainable infrastructure projects also incorporate the best available technology, such that each new wave of technological disruption enhances rather than debases the worth of the infrastructure. Most importantly, they have the support of the people, when the people experience the benefits of sustainable infrastructure and have confidence in responsible stewardship of finite resources for future generations.
9. Because infrastructure projects are large and long-term, effective planning and execution are vital. In the construction phase, transparency and good governance are important. Even before building completion, longer-run maintenance and lifecycle costs need to be prepared for. Governments can also take steps to create policy-enabling conditions to incentivise sustainable infrastructure investment. This could mean building strong capital markets and creditworthiness to provide access to bond markets and other debt financing instruments, to crowd in the private sector such as institutional investors.
10. Among the Bank’s members, we all stand to gain by sharing our experiences in policy-making, planning, financing, construction, operation and governance. We should seek and mobilise useful resources and expertise from one another and a range of institutions, including private sector players. The World Bank-Singapore Infrastructure and Urban Development Hub is one such entity with which the AIIB could partner to extend financial and technical assistance. The Hub encompasses key infrastructure global practices as well as the International Finance Corporation (IFC) which provides private sector development solutions to maximise development impact. Singapore’s Centre for Liveable Cities (CLC) is another resource that AIIB could tap on. It distils, creates and shares knowledge on liveable and sustainable cities, and has set up multiple knowledge platforms focusing on research, capability development and advisory in urban governance and integrated long-term master planning. I extend my compliments to the AIIB for prioritising the planning and construction of sustainable infrastructure, in accordance with its vision of being “Lean, Clean and Green”.
11. To this end, Singapore hopes to work with the AIIB and play our part in promoting projects that increase economic development and connectivity in Southeast Asia. The AIIB has developed a credible business plan to sharpen its strategic focus and strengthen its core competencies. In line with the AIIB’s priority to mobilise private capital to leverage its own resources and those of other MDBs to meet client demand, we hope that the AIIB will be able to access capital markets in Singapore and the region to crowd in private sector and institutional investments for bankable projects. International Enterprise (IE) Singapore remains committed to continue facilitating loan syndication discussions between the AIIB and Singapore-based financial institutions. We are also looking to work with the AIIB to conduct further outreach in Singapore to highlight the Bank’s procurement policies and investment priorities. We also remain eager to learn from members, and happy to share our experience in urban governance and integrated long-term master planning as a knowledge partner to the AIIB.
12. Let me reaffirm Singapore’s strong commitment to working with the AIIB and all member countries to drive sustainable development and to bring about impactful and continuous growth in the region for our peoples and our planet – for many generations to come.