Building Southeast Asia’s Future

Date: Feb 2014

Across Southeast Asia, growing populations and breakneck industrialization are driving an urgent need for infrastructure improvements. Specifically, the Asian Development Bank (ADB) estimates that $8 trillion will be needed before 2020 to build or upgrade transportation, telecommunications and power networks in the region.

The dilemma for governments in this region is how to pay for it all. To bridge the gap between what they need and their available funding resources, they are increasingly turning to public-private partnerships (PPP). The dilemma for investors is identifying and gauging the risks associated with each partnership.

In our latest Spotlight Asia report, Building Southeast Asia’s Future, we explore the opportunities across the patchwork of countries that makes up this region. Kroll Senior Managing Director Omer Erginsoy, based in Singapore, also provides an inside view of investment strategies and the associated risks and challenges.

For example, Omer notes that “Longstanding issues like corruption, lack of transparency, lack of judicial independence, and political uncertainty are still big concerns for investors, with corruption probably topping the list when it comes to Indonesia and the Philippines. For infrastructure investment specifically, land use rights continue to pose challenges.”

Sometimes, preconceived notions can prove costly, as in Thailand is often thought to have achieved a high level of development and so poses less risk. In reality, funding constraints, bureaucracy and a volatile political climate can make Thailand more challenging than an emerging market like Malaysia.

To learn more about the opportunities for infrastructure investment in Indonesia, the Philippines, Malaysia, Singapore, Thailand, Cambodia, Laos, Vietnam and Myanmar as well as the risks that investors should be aware of.

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