1. Infrastructure Development in Southeast Asia CIC National Capital Conference Power Shifts and Vibrant Economies: Canada Awakens to the Opportunities and Risks in Southeast Asia Trade, Investment and Supply Chains Craig Steffensen Asian Development Bank 25 November 2014

2. Asia’s and ASEAN’s Dilemma: decent growth ≠ adequate infrastructure (so far) 2

3. Robust growth in comparison with the rest of the world, but … 3

4. … its infrastructure needs to catch up. ASEAN has a population of 616 million and a GDP of $2.3 trillion Infrastructure quality / quantity lags behind the developed world, and disparities within the region remain. ASEAN = Association of Southeast Asian Nations, km = kilometer, OECD = Organisation for Economic Co-operation and Development. Source: ADB, UNDP, and UNESCAP.2010. Paths to 2015: MDG Priorities in Asia and the Pacific. ItemRoads (km) Rail (km) Phones (number) Electri- fication Clean Water Per 1,000 peoplePercentage ASEAN10.510.273.5371.6986.39 Asia12.830.533.4777.7187.72 OECD211.685.2113.8799.8099.63 Latin America 14.322.486.1192.7091.37 African.a.0.951.4228.5058.36 Global Comparison in Infrastructure Coverage (2008) Considering expanding intra-regional trade, infrastructure requirements are only expected to increase. 4

5. There are signs of progress… 5

6. Large needs, and a large funding gap. CountryEstimated Infra Needs (2010- 2020) USD Billion Needs as % of Estimated GDP (Annual, 2010- 2020) Infra Spend as % of GDP (1980-2009) Infra Spend as % of GDP (2012) Indonesia450.06.27.03.0 Malaysia188.16.76.03.5 Philippines127.06.12.02.2 Thailand173.04.94.02.0 Viet Nam110.08.112.8 (for 2009)9.2 Cambodia; Lao PDR; Myanmar 46.59.5N.A.~4.0 Source: Bhattacharyay, Kawai, Nag (2012); ADB staff estimates. 6

7. Private funding is yet to return. Source: IMF Working Paper by Seneviratne and Sun (2013), based on World Bank data. 7

8. Task: Overcome challenges to realize opportunities OpportunitiesChallenges Huge needsBut needs not translated into bankable projects Region vulnerable to disasters Significant private sector interest Private sector wary of risks Large savingsYet, nascent financial sector and project finance landscape; global investment bias Huge potential for regional connectivity Large investment needs Hardware-software disconnect 8

9. Thank you! Craig Steffensen csteffensen@adb.org