Australia’s Perspective on a Post-2015 ASEAN Connectivity Agenda
Mr Simon Merrifield
Australian Ambassador to ASEAN
ACCC Connectivity Symposium
Kuala Lumpur, 16 October 2015
Thanks to our Malaysian hosts, the ACCC and ERIA for this opportunity.
At the outset I have one simple message for ASEAN’s post-2015 connectivity agenda: the MPAC and the discussion it generates is an immensely valuable asset. It creates a focus on the right set of issues, so I urge you to keep going with that. Australia is delighted to sponsor the next MPAC and I am sure the team of consultants and the ACCC’s guidance will deliver a first class product. There’s certainly no shortage of input.
As a strategic partner of ASEAN, Australia cares about ASEAN’s future prosperity. So we wish to help address the infrastructure deficit and other connectivity constraints, and we work at that in a variety of ways. Not all of what we do occurs in a specifically-ASEAN context, but much of what we focus on globally or in APEC, for example, lands in the ASEAN zone in part or in whole. Many roads lead to the new Rome of a connected ASEAN!
I’d like to talk about some of the paths Australia pursues towards improved regional infrastructure. I want to do that to demonstrate that, in considering the next Master Plan, ASEAN should take a broad approach to factoring in the different possible pathways to reaching its connectivity goals.
The Private Sector and Institutional Connectivity
Let me first touch on the private sector. We’ve heard ad nauseum that making infrastructure projects commercially viable is a key challenge, and we are all familiar with the issues around that.
But it might be worth the next MPAC taking a look ways to encourage the private sector to do more organically, that is, in ways not explicitly hitched up to the MPAC agenda. In thinking about this, institutional connectivity and the regulatory agenda will play a big part - the more ASEAN can smooth cross-border processes and create a more integrated business environment, the more you will encourage businesses to start making cross border connections.
To give a couple of examples of Australian enterprises – the transportation company Linfox has been providing logistics services in and among ASEAN member states for 25 years, and one of our telecommunications companies, Telstra, makes substantial investments in telecommunications infrastructure across several ASEAN jurisdictions. These operations and investments – highly relevant to the connectivity agenda -- occur without any reference to ASEAN plans or Australian government urging. They occur because in those sectors, the business environment is profitable and they have mastered the regulatory context. As big players with trans-boundary interests, they are geared up to do that. Smaller players, or players with a less transnational outlook, would benefit from a more joined up regulatory environment.
The Australian Government is keen to do its bit to foster that environment. That’s why our two main technical cooperation programs at the ASEAN level are aimed at fostering economic integration and improving the trade and economic policy environment. We would be very keen to see the next MPAC maintain focus on institutional connectivity and help drive home some of the key initiatives underpinning the ASEAN Economic Community.
I’d like to step through how the Australian Government deploys its funding in support of offshore infrastructure development and related policy reform. Like other donors, we do this for altruistic reasons and because its good for our own interests in promoting global economic growth.
In 2015-16, we plan to spend around $340 million on this. That’s a global figure but the bulk of that spend is will be the Asia-Pacific region as the focus of our ODA. .
$340 million is a pretty significant figure but there are much bigger players in the game, so we try to pick winners. We look at where the infrastructure problems lie and try to focus on funding what will maximise the potential to overcome these. One such commitment is the US$160 million we are providing to build the Cao Lanh Bridge in Vietnam, part the the Central Mekong Delta Connectivity Project.
As G20 chair in 2014, Australia put infrastructure at the top of the agenda and committed to three infrastructure initiatives:
- We put $30 million in the Global Infrastructure Hub, a not-for-profit company established by G20 governments to engage with the private sector to increase resources for infrastructure development.
- We put $25 million in the Global Infrastructure Facility, a collaboration between the World Bank, the ADB, Australia, Canada, China, Japan and Singapore. It aims to facilitate the structuring of complex infrastructure PPPs.
- And we put $10 million to the Asia Pacific Project Preparation Facility (AP3F). This facility is currently under development. But will encourage private sector participation in infrastructure by improving the approach to PPP project preparation and transaction advice across the region.
These three vehicles show what Australia sees as a key pathway to meeting infrastructure challenges –finding ways to combine public and private resources.
Australia has also put in $22 million to the Private Infrastructure Development Group – which seeks finance critical infrastructure in poor countries. PIDG has formed eight subsidiary companies around the world, two of which, InfraCo Asia and DevCo manage projects in Southeast Asia.
Lastly on funds mobilisation, since 2007 we have invested $21.5 million in the multidonor Public-Private Infrastructure Advisory Facility (PPIAF). PPIAF provides technical assistance across a range of areas that assists developing countries to create a climate that attracts more private sector investment.
As we heard just now from Allan Bollard, like ASEAN, APEC has a focus on connectivity and Australia is a strong backer of APEC’s Connectivity Blueprint, which leaders handed down last November. Given the overlap, it’s worth noting some of our APEC initiatives:
On people-to-people connectivity, we are placing a priority on skills development in APEC. For instance, we are implementing a project on benchmarking occupational standards in the transport and logistics sector in conjunction with China, the Philippines, Vietnam and Indonesia. On the institutional side; Australia is developing online training on regulatory impact analysis scheduled for completion in the next month or two.
Bilateral and Subregional Investments
As we heard from the ADB speaker in Session 1, sometimes the best way to achieve greater ASEAN connectivity can be through investments at the national and sub-regional levels. Here are a few examples.
- In Indonesia, we have been investing for the past decade in the Eastern Indonesia National Roads Improvement Program (EINRIP). This program supports the Indonesian government in its reform of road project management, delivering something like 400 km of improved roads and bridges.
- In the Philippines, Australia has partnered with the ADB and World Bank to help the government package and implement PPPs, reform regulatory frameworks, and build government capabilities. In total, 10 projects have been awarded since 2011 valued at USD4.2 billion and another 14 projects valued at USD11.5 billion are being tendered.
- Sub-regionally, we contribute to the Greater Mekong Subregion Trade and Transport Facilitation (GMS TTF) Project, which is ADB led and focuses on CLMV. It will reduce the time needed to export and import goods in the subregion by working on: transport facilitation, trade facilitation, and regulatory and legal reform.
Australia is also contributing to people-to-people connectivity through a number of channels for instance:
- We have been working with ASEAN Immigration officials on the challenging task of common regional visa frameworks for ASEAN. We have also been engaged in helping out with the arrangements that will facilitate the movement of skilled workers around the ASEAN Community – the MRAs.
- And we’ve been seeking to make a positive impact on one of the downsides of greater connectivity and mobility: assisting ASEAN member states in responding to people trafficking, in particular, in helping strengthen criminal justice responses to this problem.
Along with the ASEAN Connectivity agenda is “connectivity plus”, the joining up of ASEAN to its neighbours and the world beyond. There are great opportunities for Australia in this, particularly as the Australian Government pursues its Northern Australia agenda, tapping the promise of the less developed northern 40 per cent of our continent – a region that, with the right hard and soft infrastructure – offers not just great economic opportunities to Australians, but to our near neighbours as well, not least in food and agribusiness, and resources and energy.
Better infrastructure, regulation and people-to-people links define the ASEAN connectivity agenda and are integral to the vision of a people-centred ASEAN Community. Australia will continue to support good policy on this, through the many roads that lead to the vision of a more connected ASEAN - be it within ASEAN, bilaterally, through our business advocacy and outreach, or in other multilateral forums like the G20 and APEC.
Thank you for the opportunity to be here, and for Australia to continue its longstanding support for the ASEAN Connectivity agenda. I very much look forward to seeing the next Master Plan and to witness how the next phase of the journey unfolds.