In most of developing countries in Asia, there has been demand for better economic and social infrastructure because of high growth. These countries have witnessed huge expansion in terms of income as well as population.
There has also been rapid urbanization, an increasing middle class, and a realization among the political class that people judge their performance by their ability to deliver economic and social facilities. Asian countries have greater political stability, flexible currencies and the introduction of the public-private partnership model has made wholesale seizure of assets in the infrastructure sector less likely.
In spite of inconsistencies in execution, improvements in the business and regulatory environment have lessened entry barriers. Legislative reforms in countries like Indonesia, Thailand, Philippines and Myanmar, together with relatively favourable concessions to foreign investors for attracting infrastructure investment.
Long-term and open-ended infrastructure investment funds have provided global investors the way to bet on emerging markets, with increasing allocations. Investors know that their investment capital will be tied up for a long time.
Further, because of the development of regional financial and offshore places like Hong Kong and Singapore, the impact of foreign exchange risk and sovereign risk has been reduced. Because of these, private financing into countries has been possible which were historically unable to put funds into infrastructure projects.