Only 14% of business leaders globally believe that the level of infrastructure investment currently available to support their companies is completely adequate.
Analysts estimate that two trillion US dollars will be spent on infrastructure globally on an annual basis to 2015. However, 84% of business leaders in Asia Pacific expressed concern that that level of infrastructure investment would not be adequate to support future economic growth.
The KPMG survey, conducted by the Economist Intelligence Unit, also revealed that senior executives believe that the important of infrastructure investment will rise in importance over the next five years, and that the availability and quality of infrastructure investment will directly affect where these executives locate and expand their business operations. Moreover, the survey also showed that the governments should partner with the private sector to finance and administer major infrastructure projects. Roads and power generation are the most urgently needed infrastructure, the majority of business leaders surveyed globally said.
The vast majority of respondents in the Asia Pacific Region - 87% - said that infrastructure investment will be even more important to their businesses in the next five years.
An overwhelming majority (90%) of the executives surveyed said that the availability and quality of infrastructure affects where they locate their business operations.
“As governments around the globe grapple with the current economic crisis, they must recognize that infrastructure investments are still desperately needed to support critical business activities,” said Nick Chism, Head of KPMG’s Global Infrastructure practice. “Not only does improved infrastructure attract businesses and employment, and the tax revenue that is derived from them, but it’s recognized that infrastructure work can be a very effective economic stimulus if managed correctly.”
Partnering with the Private Sector
With depleted coffers at both the federal and local government levels, 81% of Asia Pacific executives surveyed said governments need to work to a greater extent with the private sector to finance infrastructure improvement projects. “Infrastructure investment is at a critical crossroads, and governments have an incredible opportunity to make decisions that will impact many future generations,” Mr. Chism noted.
Roads and Power Supply Top Concerns in Every Region
Two-thirds (66%) of executives in the KPMG survey reported that the lack of adequate transportation and energy/power supply infrastructure were resulting in increased operating costs for their business.
According to the survey, roads and power generation are the most urgently need infrastructure investment in every region around the globe.
Vietnam’s Infrastructure Investment
Commenting on the global survey, Rupert Chamberlain, Head of KPMG's Financial Advisory Services practice in Viet Nam said "it’s clear from the survey that business leaders globally see quality infrastructure investment as a key to their business, and in an increasingly global business environment Viet Nam must respond to this to remain both regionally and globally competitive. The challenges Viet Nam has, whilst not unique, are in obtaining and allocating scarce capital, both at home and abroad, to improve the landscape for businesses, as well as meeting the social development needs of the country."
Lieven Jacquemyn, a Director in the Global Infrastructure and Projects Group at KPMG in Singapore, who has worked with development agencies and governments in the region on infrastructure financing initiatives, added: "investors we have spoken to who are active in the South East Asian Region have identified Viet Nam as a priority market, in part due to its stable political environment, which is necessary for long term project financing. Last year the Vietnamese Ministry for Planning and Investment undertook a number of encouraging steps towards creating a more transparent and positive environment for private sector infrastructure investment. Viet Nam is certainly a market to watch." (CPV)
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