Speech by CBR at Opening Session of UNECE International PPP Forum - “Implementing the United Nations 2030 Agenda for Sustainable Development through effective, people-first Public-Private Partnerships” (English only)

Following is the speech by the Commissioner for Belt and Road, Miss Yvonne Choi, at the Opening Session of UNECE International PPP Forum - “Implementing the United Nations 2030 Agenda for Sustainable Development through effective, people-first Public-Private Partnerships” (May 9):

Professor Kuo (President of CityU, Way Kuo), Mr Hamilton (Officer in Charge of the Economic Cooperation and Trade Division, UNECE, Geoffrey Hamilton), Dr. Tan (Deputy Director of Central People Government's Liaison Office in HKSAR, Dr Tieniu Tan), Distinguished Guests, Ladies and Gentlemen,

Good morning, and a very warm welcome to you all. And an especially warm welcome to our friends from the United Nations (UN), some of whom have travelled almost the entire length of the Belt and Road to be here today – from Switzerland in the heart of Europe to Hong Kong, here in the heart of Asia.

I will talk more about the Belt and Road Initiative a little later, but first I would like to congratulate City University and the United Nations Economic Commission for Europe (UNECE) on organising this forum.

For me, today’s event also brings back fond memories of when I served in the UNCTAD (United Nations Conference on Trade and Development) as a consultant, in the earlier part of my career, in the 80’s.

Two years ago, the UN marked its 70th anniversary and announced the “2030 Agenda for Sustainable Development”. Member states have agreed to take collective actions to pursue “global development and "win-win" cooperation to bring huge gains to all countries and all parts of the world”.

In the same year, the Central People’s Government in China released the “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road” (the “Vision and Actions”). Evoking the historic Silk Road Spirit of peace and cooperation, the “Vision and Actions” fleshes out the bold and visionary “Belt and Road” Initiative championed by President Xi Jinping. The “Vision and Actions” identifies five key areas for cooperation, namely, policy co-ordination, facilities connectivity, unimpeded trade, financial integration and people-to-people bond. It is also important to remember that, while the Belt and Road region covers more than 60 countries stretching from Asia to Europe, the initiative is inclusive in nature, welcoming economies around the world to get involved.

Infrastructure development, especially here in Asia and in emerging economies along the “Belt and Road”, is a vital first step in achieving the over-arching goals of the initiative; to boost economic and social development. And we are already seeing concrete evidence of new infrastructure development along the “Belt and Road” routes.

A recent study highlighted that the total value of new announced projects in the “Belt and Road” regions reached a new high of 400 billion US dollars in 2016, which is roughly 28% more than the figure (313.6 billion US dollars) in 2012.

Infrastructure development is capital-intensive with long investment cycle and usually the investment level falls short of requirements. A recent report by the Asian Development Bank estimates the annual infrastructure investment requirement in Asia from 2016 to 2030 will be around 1.7 trillion US dollars, but the region’s current investment level is only about half of that amount - around 880 billion US dollars. The gap cannot be filled by public money alone, and this is where the PPP model comes in.

PPP not only offers a further funding option for public projects by attracting private capital, it also brings together the public and private sectors in a long-term contractual relationship to deliver good public services. If PPP is based on good governance and implemented in the right way, it can provide additional resources that will propel economic and social development and improve people’s livelihood. It can also enhance efficiency and foster innovation.

Hong Kong has a long history of attracting private sector investment and operating skills to deliver public services. Our cross-harbour tunnels, the innovation hub at Cyberport, the AsiaWorld-Expo as well as healthcare programmes offered by the Hong Kong Hospital Authority, are just a few examples of successful PPP.

In Mainland China, the government is also paying more attention to promoting PPP and encouraging private investment. Last year in the Mainland, over 1,300 PPP-funded projects were signed with a combined investment of 2.2 trillion renminbi (290 billion Euros). The China Securities Regulatory Commission (CSRC) and the National Development and Reform Commission (NDRC) issued a joint statement in December 2016 allowing PPP in the infrastructure sector to raise funds through asset securitisation, which will attract more private investors to participate in PPP.

The country’s first national assets trading platform for PPP, to provide consulting, planning, bidding, supervision services and facilitate formation of PPP projects, was set up in Tianjin just over two months ago (on 28 Feb 2017). For the “Belt and Road” Initiative, NDRC will step up its efforts to promote PPP as a model for taking forward development projects in “Belt and Road” countries.

To be successful, PPP projects need to strike a balance between public and private sector objectives such as reliable and cost-effective service, stable financial returns, fair and predictable markets, sustainable allocation of risks, etc. And UNECE International PPP Centre of Excellence is now promoting “people-first” PPP, which would enhance the meaning and value of PPP, but it could also add to the challenges too. Setting up and launching a PPP is by no means an easy task, especially in emerging economies like some of those in the “Belt and Road” regions with limitations in market characteristics and size, and little or no experience with PPPs. Geopolitical, legal, regulatory and bureaucratic risks, currency restrictions, corruption and other ethical issues are real and could undermine PPP projects in one way or another. I know there will be thorough discussions on these topics during this forum, and we look forward to getting some insights from the expert guest speakers.

Since a robust legal and regulatory framework to provide effective governance and monitoring mechanisms are so crucial to PPP, many international organisations such as the World Bank, Asian Development Bank, APEC, ASEAN, and of course UNECE have conducted studies and research on PPP and published guidelines and handbooks to promote the best practices to their members. I understand this is the second International PPP Forum organised by UNECE to promote “people-first” PPPs, which put “people” as the priority and main beneficiary and focus on improving the quality of life of communities. Hong Kong is proud to be this year’s host of such a meaningful and timely endeavor.

I am glad to know that UNECE, in collaboration with CityU and Tsinghua Universities, established PPP centres in Beijing and Hong Kong last year, to develop the best international practices in PPP in the field of transport logistics and delivery of PPP training in the Greater China region. This is certainly a welcome move and will help promote PPP in the region, and raise awareness of the PPP model in achieving the goals of the “Belt and Road” Initiative.

Ladies and gentlemen, this UNECE International PPP Forum in Hong Kong is a timely and topical event, especially since we gather here just a few days ahead of a high-level Belt and Road Forum in Beijing (14 & 15 May). This event also demonstrates the spirit of international cooperation and sharing that is required to advance global economic and social development in the 21st century.

Once again, may I congratulate CityU and UNECE on organising this forum and I wish all our visitors a very fruitful and enjoyable stay here in Hong Kong.

Thank you.

Ends/Tuesday, May 9, 2017