The Urban Hub has also partnered the Singapore Cooperation Enterprise – a platform that leverages on the public sector expertise of Singapore. Together, they have implemented six projects in Indonesia, Vietnam, China and Mongolia. This includes helping these governments develop a regulatory and financing framework to prepare PPP projects for private sector investment. 4  BIS central bankers’ speeches  37. Regional governments have also introduced schemes to encourage private sector investment. For example, the Indonesian Ministry of Finance has worked with the World Bank to set up the Indonesia Infrastructure Guarantee Fund. This fund provides guarantees to the private sector against risks arising from government actions, so as to improve the creditworthiness and quality of PPP infrastructure projects. 38. A critical success factor for achieving Asia’s infrastructure investment potential is a well-developed financial sector. Asia needs financial markets that are deep enough to effectively intermediate its considerable savings pool and broad enough to provide a range of suitable instruments for risk mitigation. Although ASEAN has made progress on these fronts since the 1997 crisis, more needs to be done. These include strengthening legal and regulatory frameworks, increasing market access, harmonising cross border regulations, and raising the level of corporate governance. 39. ASEAN has set in motion several initiatives. It has drawn up a scorecard to identify gaps in the development of bond markets. Its capital markets regulators are working on initiatives to harmonise domestic laws, regulations, and practices.
It has introduced the ASEAN Plus Standards, which are disclosure requirements based on the standards on cross-border offerings set by the International Organisation of Securities Commissions (“IOSCO”). And last month, some ASEAN exchanges announced plans to establish linkages to facilitate trading among them as well as to jointly market themselves to international investors. 40. It is early days yet. ASEAN is still some way to having a well-developed and integrated capital market. But the resolve is strong, important steps have been taken, and progress has been made compared to ten years ago. And as ASEAN’s capital markets grow and integrate, long-term investments such as infrastructure will become much more attractive to private sector players. Conclusion 41. Let me conclude. ASEAN is a diverse collective of nations at various stages of development. In some ways, this is a disadvantage compared to sovereign economies like China and India. But in other ways, it is an advantage, providing investors in Asia a good diversification opportunity and the value proposition of a network of value-adding activities leveraging on the different comparative advantages of its member countries. 42. I congratulate Bank of America-Merrill Lynch for organising this impressive conference. You have put together a comprehensive line-up of topics that go into the specifics of investment opportunities in Asia. I wish you fruitful discussions and an enjoyable time in Singapore. Thank you. BIS central bankers’ speeches  5