International PPP experience on water supply and considerations for Vietnam

Thứ sáu, 04/12/2015 17:42

Positive relation between infrastructure, national competitiveness and economic growth appears both theoretically and practically in developed and developing countries. Good infrastructure will help reduce fixed cost for enterprises, calling many enterprises to take part in production to reduce average fixed cost of infrastructure, decrease production cost and increase competitiveness of the country (Easterly, 2006). However, further investments in infrastructure also lead to challenges. Private sector, the main factor tends to decrease their investments in infrastructure since record year of 1990, making the current infrastructure investment below the expectation. Capital from public sector for facilities is facing problem of efficiency in management. Recent studies on this issue show an agreement that a down in private investments in infrastructure is attributable to two reasons: (i) private sector stops their investments and (ii) there is no many choice for them (Martin, 2009).