A major new hub for backing infrastructure works in developing economies has been greenlit in Singapore, with the city-state’s government agreeing to a significant expansion of the World Bank Group’s presence there.
Under the deal, the Group’s ‘family’ of five organisations – including the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) – will dramatically step up their local staffing levels so they can intensify work with private companies to source funds for projects all over the world.
World Bank Group vice president for Asia-Pacific, Axel van Trotsenburg, said: “As the centre of global economic activity gravitates increasingly to East Asia, Singapore’s role will further grow. This provides huge opportunities for emerging and developing economies.
“The World Bank Group wants to seize this opportunity and build a dynamic partnership for the future that will have important spin-off effects for developing countries.”
IFC vice president and treasurer, Jingdong Hua, explained: “[We] will leverage Singapore’s position in global capital markets by establishing its Asia Treasury Hub – expanding the number of funds managed out of Singapore by IFC’s Asset Management Company; growing IFC’s investment and advisory teams to expand infrastructure investments, and [involving our] venture capital and technology teams, as well as [experts in] other sectors.”
MIGA chief operating officer Karin Finkelston outlined how the scheme intends to make use of financial products to achieve its ambitious goals. “Today,” she said, “the financial instruments available for supporting investment in developing countries are much more varied, and the role of private finance is particularly important.
“We will continue to innovate in the use of insurance products, guarantees and other risk instruments from our operations in Singapore, mobilising more private finance and helping to fill the infrastructure finance gap.”
Singapore’s announcement of the Asia Treasury Hub took care to highlight the role of foreign investment in setting the island country on the road to becoming the global economic force it is today.
From 1963 to 1975, Singapore received 14 loans from the World Bank. Initial funds raised in that period enabled the city-state to finance a deep-sea terminal at its port, double energy capacity and construct a water-supply interconnection with Malaysia.
Subsequent loans addressed environmental- and flood-management works, telecommunications systems, a capitalisation of the Development Bank of Singapore and the consolidation of education facilities into the National University of Singapore.
Singapore’s senior minister of state for finance and law, Indranee Rajah – who witnessed the signing of the 27 October agreement – said: “The next phase of the Singapore Hub will foster greater and more meaningful integration of the World Bank’s functions with Singapore’s strengths and developmental experience.”
He added: “The World Bank Group can collaborate with Singapore’s business and research ecosystem to enhance its range of solutions for developing countries in the region – and beyond.”