Last updated: Wednesday, March 29, 2017
Fiscal Reforms Key to Vietnam’s Infrastructure Needs: ADB OfficialPosted: Thursday, March 09, 2017
Vietnam should continue to implement fiscal reforms in order to bridge its infrastructure investment gap, advises Bambang Susantono, an Asian Development Bank (ADB) official.
The ADB’s vice president made the recommendation at a meeting with the media on March 8 as part of his working visit to Vietnam.
Susantono said those efforts should include tax reforms, spending re-orientation and caution with borrowings and non-tax revenues.
He also urged Vietnam to boost the participation of the private sector, create an attractive investment climate, take advantage of the public-private partnership model and deepen capital markets.
Susantono added that the government should make a list of expenditures and priorities.
According to a recent ADB report, Asia’s infrastructure has improved rapidly but remains far from adequate, with over 400 million people living in Asia still lacking electricity, roughly 300 million without access to safe drinking water and 1.5 billion lacking basic sanitation.
The report estimates that developing Asian countries will need to invest US$26 trillion from 2016 to 2030, or US$1.7 trillion each year, if the region is to maintain its growth momentum, eradicate poverty and respond to climate change.
Of the total investment needs over 2016–2030, US$14.7 trillion will be reserved for power and US$8.4 trillion for transport. Investment in telecommunications will reach US$2.3 trillion, while water and sanitation costs are estimated at US$800 billion over the period.
East Asia will account for 61 per cent of investment needs through 2030 but as a percentage of GDP, the Pacific region will take the lead, valued at 9.1 per cent of GDP.
This is followed by South Asia at 8.8 per cent, Central Asia at 7.8 per cent, Southeast Asia at 5.7 per cent, and East Asia at 5.2 per cent of GDP.