Singapore has been ranked the No1 market in the world for investment in infrastructure,
according to a recent study by Arcadis a global natural and built asset design and consultancy firm.
The study examined a multitude of factors including the ease of doing business in each market, tax rates, GDP per capita, government policy, the quality of the existing infrastructure and the availability of debt finance. Combining all of these factors provided a comprehensive overview of the risk profile for each market and how attractive each one is likely to be to potential investors.
According to Richard Warburton, Head of Infrastructure, Asia, Arcadis
Infrastructure is the backbone of a country and a catalyst for its long-term economic development. With Singapore’s population predicted to grow from 5.5 million to 7 million people by 2030, investment in new infrastructure will be imperative. However, unlike many cash-strapped markets in Asia, Singapore is self-sufficient in financing and managing its infrastructure projects so the opportunities for funds may lie in managing existing assets to ensure they are as productive as possible.
Emerging markets in South East Asia such as Malaysia, Thailand, Indonesia and the Philippines are trying to improve their business environment for foreign investment through infrastructure development. Due to the lack of funding, they offer more opportunities for investors in infrastructure. The governments are actively encouraging the private sector to take a delivery role in infrastructure projects.
Richard Warburton added, A key differential that we have seen in Asian markets like Singapore is that they have clear integrated strategies that tie the infrastructure development plans to business and economic objectives. This gives long-term clarity to investors and is something that European markets, in particular, would do well to emulate if they are to succeed in attracting more private finance into infrastructure.
The report also examined the factors that governments, infrastructure owners and operators need to consider in order to attract private finance.
“Countries that have created the right political environment for sustained long-term economic growth and have attractively structured infrastructure schemes will stay ahead of the competition to attract international investors.”
Here is a link to the interview with Warburton on Bloomberg TV.