Speech
of
His Excellency Fidel V. Ramos
President of the Philippines
At the World Infrastructure Forum in Jakarta, Indonesia

Taped in Malacañang for satellite broadcast from Manila, Philippines, October 12, 1994]

Modernizing
infrastructure

THIS PRESTIGIOUS GATHERING of senior Government officials and private-sector decision-makers tackles an issue of surpassing importance to the developing nations—infrastructure modernization. It is therefore a great distinction for Indonesia and us in Asia, to be hosts at this very first World Infrastructure Forum.

And I thank and congratulate President Soeharto of Indonesia for taking the lead.

”Infrastructure represents,” says the World Development Report for 1994, “if not the engine, the wheels of economic activity . . . . A strong association exists between the availability of infrastructure—telecommunications, power, paved roads and access to safe water—and per capita GDP.”

Infrastructure lag

For more than a decade now, developing countries have been investing $200 billion a year in new infrastructure—representing 4 percent of their national output and a fifth of their total investment. This has dramatically increased infrastructure services in the Third World.

Despite such progress, however, the infrastructure lag in developing countries is still huge. According to World Bank figures, electric power has yet to reach 2 billion people, and one billion people in the developing world still lack access to clean water.

The World Infrastructure Forum is timely and propitious because it convenes at a time of growth and opportunity.

The challenge to nations today is to build through rapid infrastructure development the competitive edge for markets, technology and investment.

In meeting this challenge and this promise, infrastructure must play a strategic role. Today’s imperative is to build as fast as possible the roads and bridges that would link our cities and countrysides; the pathways for greater productivity; the networks for better communication and exchange of technology; and the gateways for more global movement of people, goods and services.

This is more than just a numbers game—of taking inventory of infrastructure stock and filling up what is missing or lacking. It involves also looking into ways of providing infrastructure more efficiently and effectively. It asks us, especially in the developing world, to seek full value for our money.

Alliance and partnership

For Asia, this forum can help to focus energies on building upon the record of dynamic growth and sustained progress through rapid infrastructure development.

The immediate challenge before us is how to generate the estimated $2.5 trillion required to build the infrastructure needed for the full modernization of the Asia-Pacific region and other parts of the globe.

This forum examines a new way of meeting this challenge, which is too large for Government to handle alone. And this approach is through effective alliance and partnership between Government, the private sector and multilateral institutions. This is the key to achievement for future progress.

In many ways, our recent experience in the Philippines could help others to understand and appreciate this approach. For years, we had neglected to maintain and upgrade infrastructure facilities and services in our country, and this adversely affected national economic performance in a significant way. Today, we’re finally filling the gaps by creating a policy environment in which the private and public sectors, aided by multilateral institutions, can work together more effectively and more expeditiously.

In my view, the Government must play the role of catalyst, by providing a policy and financial framework that is private-sector-friendly and boosts free and fair competition.

We have undertaken major reforms to privatize, deregulate, liberalize and democratize economic activity in our country. We are opening up in telecommunications, transportation and insurance, banking and other major sectors, and we are dismantling cartels and monopolies harmful to public welfare. We are privatizing State corporations and assets such as steel, fertilizers, shipping, forestry, mining, power generation, hotels, communications, aviation and land transport.

The Philippine experience

We have also enacted new laws liberalizing foreign investments, reforming banking and privatizing infrastructure.

The Philippines today is one of the few countries with a Build-Operate-Transfer Law. Our expanded B-O-T Law allows more sectors to participate, provides for greater flexibility in arrangements for organizational and international partnerships, enhances rates of return and streamlines the approval process. It also stipulates risk-sharing by Government through financial incentives or credit enhancements.

We are confident that there is much that others can learn from the Philippine experience, just as we have much to learn from them.

The World Infrastructure Forum will no doubt show that, though most of our needs may be local and national, all of us will gain fresh international perspectives and benefit from new technologies and innovations.