Establishing Sustainable Private Infrastructure in Emerging Markets

Abstract

Continued economic growth in many emerging markets will require increases in the stock and quality of infrastructure that significantly exceeds the availability of public funds for such projects. As a result, many emerging market countries wish to attract international private capital to finance infrastructure projects and to realize market efficiency in these sectors. However, privatization must not be narrowly viewed as a transfer of assets currently held by the public sector into the hands of the private sector. Instead privatization must be pursued as a far more comprehensive process of fundamentally transforming a public sector into a viable private sector, and establishing a business environment in which the private sector can successfully meet the country's long term infrastructure needs.