From S’pore to the world: an urban strategy that sells

From S’pore to the world: an urban strategy that sells

New programme with World Bank to take urbanisation expertise and investments to growing cities

By OH BOON PING

(SINGAPORE) The base is Singapore. The first projects are cities in Mongolia, China and Vietnam. And there’s money to be made for investors and a whole new world of amenities in store for the developing world.

A new global urban strategy has been officially launched in Singapore, with three projects in the pipeline.

A joint initiative with the World Bank, the strategy builds on Singapore’s extensive city management and public-private partnership (PPP) experience to help developing countries as they take advantage of the economic opportunities associated with rapid urbanisation.

Under the programme, participants will receive help with planning, preparation and management of cities that are environmentally sustainable.

The World Bank will also pursue ‘wholesaling’ strategies to target an expanding number of cities by working with financial intermediaries and municipal funds for assistance to local governments.

‘Urbanisation is a vital phase of development and, if managed well, it can be a key driver of long-term economic growth in a country,’ said World Bank chief Robert Zoellick.

‘That’s why it is so important for the global community to help developing countries address the urbanisation challenge. It is fitting to launch our Urban Strategy in Singapore, a world-recognised leader in urban planning.’

Private sector investment in Asia has been on the decline since the 1997 Asian crisis and new engines need to be found, Finance Minister Tharman Shanmugaratnam said at a summit yesterday.

Except for China, investment as a share of GDP in emerging Asia fell about 10 percentage points following the 1997 crisis and has remained essentially unchanged over the past five years.

‘Asian investments have not kept pace with the growth of exports and corporate profits,’ said Mr Tharman.

‘Investing in Asian infrastructure is not a silver bullet for curing current account imbalances, but it comes close.

‘Current estimates of the gaps in infrastructural investment vary, but they are all large. In a recent study, the Asian Development Bank (ADB) estimated that Asia needs to spend about US$8 trillion over the next 10 years - to build and maintain new power, transport, water and sanitation and telecommunications infrastructure.’

Based on some estimates, cities are projected to expand by another two billion people in the next two decades, while 90 per cent of urban population growth is expected to occur in the developing world.

The programme’s maiden projects will be undertaken by the Singapore Cooperation Enterprise (SCE), the World Bank, the governments of Mongolia and Vietnam, and the municipal government of Chongqing to assist in developing a regulatory and financing framework to prepare public-private partnership (PPP) projects for private sector investment.

The cooperation will focus on developing commercially viable infrastructure projects in water and environmental management, power, expressways and roads.

The World Bank and SCE will also jointly organise workshops to share Singapore’s public and private sector expertise, experiences and best practices in structuring PPP infrastructure projects.

It is expected that these projects will lead to collaboration on other projects with the respective countries, which in turn open up opportunities for Singapore’s private sector players to assist the countries as investors and advisers.

‘As a city-state, Singapore has learned many lessons in urban management, often after years of experimentation,’ Mr Tharman said.

‘This is an exciting partnership with the World Bank, which will allow us to share what we have learned with others at a time of massive urbanisation in Asia.’

Separately, the Government of Singapore Investment Corp (GIC), manager of more than US$100 billion of the city-state’s foreign reserves, will make more direct investments in infrastructure assets, Teh Kok Peng, president of GIC Special Investments, said yesterday.

He said direct investment in infrastructure is more attractive than through funds because it offers higher returns.

Source : Business Times - 12 November 2009

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