Countries in Southeast Asia need to promote innovative green and blue finance approaches to address the rising financing gap for sustainable infrastructure in the region, according to an Association of Southeast Asian Nations (ASEAN) workshop in Bangkok.
The event on Innovative Financing Approaches for Sustainable Infrastructure, a preview to the ASEAN Finance Ministers Meeting in April, was jointly hosted on 11 February 2019 by Thailand’s Ministry of Finance with the support of the Asian Development Bank (ADB). Held in conjunction with the ASEAN Finance and Central Bank Deputies’ Working Group Meeting, the workshop gathered together government officials, private sector representatives, and other experts to discuss the way forward for innovative finance in the region.
“The ASEAN region faces significant infrastructure needs,” said ADB Director General for Southeast Asia Mr. Ramesh Subramaniam. “We need innovative financing approaches that mitigate risks in projects and bring more partners to the table; support greener, cleaner development; and help solve critical development challenges.”
Deputy Director-General of Thailand’s Fiscal Policy Office Ms. Ketsuda Supradit said the workshop marks the beginning of a series of activities by the Thai government as chair of ASEAN in 2019, which views enhancing ASEAN’s connectivity as a priority under the finance track. In addition, the workshop findings were reported to the ASEAN Finance and Central Bank Deputies’ Working Group Meeting, as well as the Working Committee on Capital Market Development and the ASEAN Capital Markets Forum.
Infrastructure financing needs for ASEAN members is estimated at around $210 billion per year when taking into account climate change mitigation and adaptation costs, according to ADB. Public budgets alone will not be able to bridge this need, hence, the urgency to catalyze private capital sources.
Using public finance efficiently to mobilize funds from capital markets and attract commercial investors is gaining traction globally and in the region. The Thailand Future Fund, Indonesia’s Sustainable Development Goals One platform, and the new ASEAN Catalytic Green Finance Facility of the ASEAN Infrastructure Fund are examples of how public funds can be leveraged to catalyze private capital for sustainable infrastructure.
The workshop reviewed these efforts and highlighted the needs for a stable and predictable regulatory environment and the strategic use of public funds on project development to mitigate risks and attract investors to scale up private investment in climate change and conservation efforts.
“Green finance” opened the thematic sessions with a context setting presentation on financial initiatives needed to promote environmental improvement, climate change mitigation and adaptation, as well as improving efficiencies in natural capital preservation and resource mobilization. “Blue finance” was discussed as a needed new theme to mobilize finance effectively to address rising pollution caused by plastics and other sources in the region’s rivers and ocean bodies. Both potential green and blue finance mechanisms, examples, and structures were discussed. The ASEAN working group meetings will continue through Friday in Bangkok.
Diplomatic Academy Vienna – Marking the 75th anniversary
On the 01 July 2020, the Modern Diplomacy, International Institute IFIMES along with the world’s eldest diplomatic school (that of the Diplomatic Academy Wien) and two other partners (Culture for Peace and Academic Journal European Perspectives) organised a conference with over 20 speakers from all around the globe. The event under the name FROM VICTORY DAY TO CORONA DISARRAY: 75 YEARS OF EUROPE’S COLLECTIVE SECURITY AND HUMAN RIGHTS SYSTEM, highly anticipated and successful gathering, was probably one of the very few real events in Europe, past the lockdown.
Among 20-some speakers were: Austrian President (a.D) and current co-chair of the Ban Ki-moon center, Dr. Heinz Fischer; the European Commission Vice-President, MargaritisSchinas; former Secretary-General of the OECD and Canadian Economy minister (under PM Trudeau), Donald J. Johnston; former EU Commissioner and Alpbach Forum President, Dr. Franz Fischler; former OSCE Secretary General and current OSCE High Commissioner on National Minorites, Lamberto Zannier; Austria’s most know Human Rights expert, prof. Manfred Nowak; Editor-at-Large of the Washington-based the Hill, Steve Clemons; Secretary General of the Union for the Mediterranean, Nasser Kamel; Dean of the International Anti-corruption Academy Amb. Thomas Stelzer; the longest serving Defence Minister of Austria and current Presidetn of the AIES Institute, Dr. Werner Fasslabend; founder and CEO of the largest university sports platform in Europe, Lawrence Gimeno; Urban futurist, Ian Banerjee; Director of the WIIW Economic Institute, Dr. Mario Holzner, and many more thinkers and practitioners from the UK, Germany, Italy and Australia as well as the leading international organisations from Vienna and beyond.
Media partners were diplomatic magazines of several countries, and the academic partners included over 25 universities from all 5 continents, numerous institutes and 2 international organisations. A day-long event was also Live-streamed, that enabled (digital) audiences from Chile to Far East and from Canada to Australia to be engaged with panellists and attendees in the plenary and via zoom.
The Conference was arranged with the culinary journey through dishes and drinks of central Europe and closed with the mini concert by the world’s best hurdy-gurdy performer, Matthias Loibner and accompanying vocalist, professor of the Music University Vienna, Natasa Mirkovic.
Wishing to make the gathering more meaningful, the four implementing partners along with many participants have decided to turn this event into a lasting process. It is tentatively named – Vienna Process: Common Future – One Europe. This initiative was largely welcomed as the right foundational step towards a longer-term projection that seeks to establish a permanent forum of periodic gatherings as a space for reflection on the common future by guarding the fundamentals of our European past.
As stated in the closing statement: “past the Brexit the EU Europe becomes smaller and more fragile, while the non-EU Europe grows more detached and disenfranchised”. A clear intent of the organisers and participants is to reverse that trend.
To this end, the partners have already announced the follow up conference in Geneva for early October, to honour the 75th anniversary of the San Francisco Summit. Similar call for a conference comes from Barcelona, Spain which was a birthplace of the EU’s Barcelona Process on the strategic Euro-MED dialogue.
Exploring migration causes: Why people migrate
People migrate for many reasons , ranging from security, demography and human rights to poverty and climate change. Find out more.
The number of people residing in an EU country with the citizenship of a non-member country on 1 January 2019 was 21.8 million, representing 4.9% of the EU-27’s population. A further 13.3 million people living in one of the EU27- countries on 1 January 2019 were citizens of another EU country.
Push and pull factors
Push factors are the reasons people leave a country. Pull factors are the reason they move to a particular country. There are three major push and pull factors.
Persecution because of one’s ethnicity, religion, race, politics or culture can push people to leave their country. A major factor is war, conflict, government persecution or there being a significant risk of them. Those fleeing armed conflict, human rights violations or persecution are more likely to be humanitarian refugees. This will affect where they settle as some countries have more liberal approaches to humanitarian migrants than others. In the first instance, these individuals are likely to move to the nearest safe country that accepts asylum seekers.
In recent years, people have been fleeing to Europe in large numbers from conflict, terror and persecution at home. Of the 295,800 asylum, seekers granted protection status in the EU in 2019, over a quarter came from war-torn Syria, with Afghanistan and Iraq in second and third place respectively.
Demographic and economic factors
Demographic change determines how people move and migrate. A growing or shrinking, aging or youthful population has an impact on economic growth and employment opportunities in the countries of origin or migration policies inthe destination countries.
Demographic and economic migration is related to labour standards, unemployment and the overall health of a country’s’ economy. Pull factors include higher wages, better employment opportunities, a higher standard of living and educational opportunities. If economic conditions are not favourable and appear to be at risk of declining further, a greater number of individuals will probably migrate to countries with a better outlook.
According to the UN International Labour Organization, migrant workers – defined as people who migrate with a view to being employed – stood at roughly 164 million worldwide in 2017 and represented nearly two thirds of international migrants. Almost 70% were found in high-income countries, 18.6% in upper middle-income countries, 10.1% in lower middle-income countries and 3.4% in low-income countries.
The environment has always been a driver of migration, as people flee natural disasters, such as floods, hurricanes and earthquakes. However, climate change is expected to exacerbate extreme weather events, meaning more people could be on the move.
According to the International Organization for Migration, “Environmental migrants are those who for reason of sudden or progressive changes in the environment that adversely affect their lives or living conditions, are obliged to leave their habitual homes, either temporarily or permanently, and who move either within their country or abroad.”
It is hard to estimate how many environmental migrants there are globally due to factors such as population growth, poverty, governance, human security and conflict, which have an impact. Estimates vary from 25 million to one billion by the year 2050.
New EU migration pact
Managing migration effectively to deal with asylum seekers and protect external borders has been an EU priority for many years. The European Commission is set to propose a new pact on migration and asylum this year. The Parliament has been advaocating an overhaul of EU asylum rules to ensure greater solidarity and fairer sharing of responsibility among EU countries.
Parliament’s civil liberties committee is currently working on a report on new avenues for legal labour migration. MEPs underline the need for legal paths to reduce irregular migration and fill labour market gaps and for a harmonised EU policy. The committee is also calling for the Common European Asylum System to be complemented by a European Union Resettlement Framework and humanitarian corridors.
Investment Plan for Europe exceeds €500 billion investment target ahead of time
The European Commission and the European Investment Bank (EIB) Group have delivered on their pledge to mobilise €500 billion in investment under the Investment Plan for Europe. Some 1,400 operations have been approved under the European Fund for Strategic Investments (EFSI), using a budget guarantee from the European Union and own resources from the EIB Group. They are expected to trigger close to €514 billion in additional investment across EU countries and to benefit some 1.4 million small and mid-sized companies. In 2017, when the Council and the Parliament agreed to broaden the EFSI’s scope and size, the goal was to mobilise €500 billion by the end of 2020. The money was intended to address the investment gap left as a result of the 2007/8 financial and economic crisis.
Over the past years and especially after the coronavirus outbreak the focus of the EFSI shifted: it has inspired InvestEU, the Commission’s new investment programme for the years 2021-2027, and already now it contributes to the Corona Response Investment Initiative. EFSI will also play a key role in the NextGenerationEU package of measures to rebuild the European economy after the coronavirus shock. It will do this via a top-up for a Solvency Support Instrument, which aims to prevent insolvencies in European businesses.
President of the European Commission Ursula von der Leyen said: “The Investment Plan for Europe is a success. Over the past five years, it has enabled the financing of hundreds of thousands of businesses and projects, delivering on our ambitions of making Europe more green, innovative and fair. We will continue this through NextGenerationEU.”
European Investment Bank Group President Werner Hoyer said: “EFSI can serve as a blueprint for action during the coronavirus response. Knowing that we exceeded the headline figure of €500 billion of investment ahead of time is proof of the power of partnership. Implementing the financial pillar of the Commission’s Investment Plan for Europe has been an honour and a challenge for the EIB. We lived up to it not least thanks to the excellent cooperation between the Bank and European and national institutions. The success of this initiative shows what Europe can achieve with the right tools: our continent has become more social, green, innovative and competitive. We can and we should build on our experience to overcome the current crisis. It will help us to shape a Europe all of us can be proud of.”
What has the European Fund for Strategic Investments financed?
The EFSI allows the EIB Group to finance operations that are riskier than its average investments. Often, EFSI-backed projects are highly innovative, undertaken by small companies without a credit history, or they pool smaller infrastructure needs by sector and geography. Supporting such projects required the EIB Group to develop new financing products, for example venture debt with equity features or investment platforms. This changed the DNA of the Bank and revolutionised the way Europe finances its priorities.
Importantly, the EFSI also enables the EIB to approve a greater number of projects than would be possible without the EU budget guarantee’s backing, as well as to reach out to new clients: three out of four receiving EFSI backing are new to the bank. This proves the added value of EFSI operations.
Thanks to EFSI support, the EIB and its subsidiary for financing small businesses, the European Investment Fund (EIF), have provided financing for hundreds of thousands of SMEs across a wide range of sectors and in all EU countries. Examples range from sustainable agriculture in Belgium, to innovative medical technology in Spain, to an energy efficiency company in Lithuania.
Economic impact: jobs and growth
The impact of the initiative is sizable. Based on results from December 2019, the EIB’s Economics Department and the Commission’s Joint Research Centre (JRC) estimate that EFSI operations have supported around 1.4 million jobs with the figure set to rise to 1.8 million jobs by 2022 compared to the baseline scenario. In addition, calculations show that the initiative has increased EU GDP by 1.3% and it is set to increase EU GDP by 1.9% by 2022. As of the beginning of this year, 60% of the capital raised came from private resources, meaning that EFSI has also met its objective of mobilising private investment.
Measured against the size of the economy the biggest impact is in countries that were hard hit by the 2007/8 crisis, i.e. Cyprus, Greece, Ireland, Italy, Portugal, and Spain. While the direct investment impact is particularly high in those countries, the calculations found that cohesion regions (mostly Eastern European countries) are likely to benefit more from a long-term effect. These calculations correspond with the actual financing activities under EFSI: top countries ranked by EFSI-triggered investment relative to GDP are Bulgaria, Greece, Portugal, Estonia, and Spain.
How has the Investment Plan for Europe benefited citizens?
The EIB’s EFSI report 2019 lists a number of concrete outcomes of the initiative. Thanks to the EFSI:
- Some 20 million additional households can access high-speed broadband
- Around 540,000 social and affordable housing units have been built or renovated
- 22 million Europeans benefit from improved healthcare services
- Some 400 million passenger trips/year will benefit from new or improved transport infrastructure
- 13.4 million households were supplied with renewable energy.
The Commission and the EIB Group launched the Investment Plan for Europe in November 2014 to reverse the downward trend of investment and put Europe on the path to economic recovery. Its financial pillar, the European Fund for Strategic Investments, was initially tasked to mobilise €315 billion in additional investment by 2018. Given its success, the European Parliament and Member States agreed to enhance the EFSI and extend the investment target to €500 billion by end 2020.
An independent evaluation of the EFSI published in June 2018 concluded that the EU guarantee is an efficient way of increasing the volume of riskier operations by the EIB, as it uses fewer budgetary resources compared to European grant programmes and financial instruments. It underlines that EIB support is key to EFSI beneficiaries: it provides a “stamp of approval” to the market, thus helping to facilitate future fund-raising. EFSI’s success is based not least on its efficient governance structure, which is responsive to constant changes of the markets. An independent group of experts decides if a project qualifies for backing by the EU guarantee. The goal: de-risking private investment into projects needed for a more sustainable Europe and adding value to what would have happened without public assistance.
In May 2020, the European Commission presented its revised proposal for the successor to the Investment Plan for Europe under the next Multiannual Financial Framework starting in 2021: the InvestEU Programme.
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