THE young population in Association of Southeast Asian Nations (Asean) member-countries remains its biggest asset in terms of attracting financing needed to plug the region’s infrastructure constraints like those from the United States.
In an Infrastructure forum for Asean journalists at the Asian Development Bank (ADB) headquarters on Thursday, US Embassy Counselor for Economic Affairs Lynne Gadkowski said the “youth bulge” in the region ensures the economic growth and presence of various opportunities in the Asean.
Gadkowski said the Philippines, for one, is said to already be in the demographic sweet spot where the mean age is 24 to 25 years old. The rest of Asean are on the same boat with the below-20 population accounting for 34.5 percent in 2017, according to the Jakarta-based Asean Secretariat.
“In terms of infrastructure and US support for Asean, this region is incredibly important to the United States; it has been for decades and will continue to be for centuries. Administrations come and go, but the prioritization of this region is incredibly important to the United States,” Gadkowski said.
“Economic growth, opportunity, I think we’re increasingly struck by the demographics as you look at the youth bulge,” she added.
However, with a lot of young people, the region also has high-population areas. This places pressure on countries’ infrastructure facilities, particularly where cities are concerned.
Gadkowski said with this, the region needs to invest $1.7 trillion annually to address the infrastructure needs of growing populations.
To date, the United States has invested $119 billion between 2007 and 2017. This, she said, highlights the importance of forging partnerships in financing infrastructure in the region.
“I’d like to say every government has deep pockets to contribute that type of financing [but] it clearly cannot come from one government alone on its own without partners, which is why we are increasingly looking at the private sector and partners like ADB,” Gadkowski said.
The government aims to create over a million jobs annually until 2022. This will be fueled by the government’s massive infrastructure spending of P8 trillion to P9 trillion until 2022.
Based on documents obtained by BusinessMirror, the national government intends to spend P4.71 trillion in the next three years for ongoing and new projects identified under the three-year rolling infrastructure plan (TRIP).
Neda said the amount covers around 7,401 projects. The TRIP is the government’s tool to strengthen the link between programming and budgeting. It ensures that the right types or the needed projects are included in the pipeline and are accordingly funded.
This includes P3.42 trillion for 4,376 projects under Tier 1 or ongoing projects, and P1.287 trillion or 4,376 projects in Tier 2 or new and/or expanded projects.
In order to maximize government resources, the pipeline list of TRIP projects will include Tier 1 and Tier 2 projects.
Tier 1 will be composed of ongoing projects that need to have continuous funding in the next three years, while Tier 2 includes “new” projects.
Meanwhile, 71.19 percent, or P3.35 trillion, of the funds to be used for these projects are from the national budget; 25.18 percent, or P1.185 trillion, will be obtained from official development assistance.
Around 2.51 percent or P118.32 billion will be financed through corporate funds of government-owned and -controlled corporations; 0.58 percent, or P27.09 billion, will be from joint ventures; and 0.54 percent, or P25.56 billion, will be financed through public-private partnerships.
Image credits: Nonie Reyes