Management Contrac by ono85838

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									                              1965 - 1995



                                        Japan
                            Hong Kong
                            Korea
                            Singapore
              Indonesia
                            Taiwan
Vietnam       Malaysia
              Thailand
              Philippines
          By: Dr. Atipol Bhanich Supapol,
                                                                      GDP Per Capita (Constant 2000 US$)
                                 16000


                                 14000


                                 12000
(Constant 2000US $ per person)




                                 10000
                                                                                                                                                             China
                                                                                                                                                             Iran, Islamic Rep
                                  8000
                                                                                                                                                             Korea, Rep

                                  6000                                                                                                                       Malaysia
                                                                                                                                                             Thailand
                                  4000


                                  2000


                                     0
                                         1965       1970         1975        1980         1985         1990         1995        2000         2005

                                          Development Data Group, The World Bank. 2008. 2008 World Development Indicators Online. Washington, DC: The World Bank.
                             GDP Growth annual % change (IMF Estimates)
                  7


                  6


                  5
annual % change




                  4
                                                                              Iran, Islamic Republic of
                                                                              Malaysia
                  3
                                                                              Thailand

                  2


                  1


                  0
                      2010   2011       2012       2013       2014



                                                             Source: IMF World Economic Outlook 2009
       Success Factors Behind High Performing Dynamic Asian Economies

•A stable business environment that encouraged investment in fixed assets

•Bureaucracy designed for a “strong state” with credible commitment to long-run
development

•Government’s activist policies to quicken the pace of industrialization (initially export led
growth strategy then trade-led growth strategy

•Reallocation of productive resources, productivity improvement and high capital
investment

•Liberalization and privatization of key sectors (financial sector, telecom, transportation,
power, etc.) – encouraged close symbiotic relations between banks and industrial
corporations

•Legal architecture reforms

•Encouraged foreign direct investment and technology transfer

•Promotion of private sector participation (finance) and Entrepreneurship
                                                                                             Net Foreign Direct Investment
                      6000




                      5000




                      4000
Million current US$




                      3000
                                                                                                                                                                                                                           Iran, Islamic Rep IRN
                                                                                                                                                                                                                           Korea, Rep KOR
                                                                                                                                                                                                                           Malaysia MYS
                      2000
                                                                                                                                                                                                                           Thailand THA


                      1000




                         0
                                            1972


                                                          1974




                                                                               1977


                                                                                             1979




                                                                                                                                1984


                                                                                                                                              1986




                                                                                                                                                                   1989


                                                                                                                                                                                 1991




                                                                                                                                                                                                                    1996
                              1970
                                     1971


                                                   1973


                                                                 1975
                                                                        1976


                                                                                      1978


                                                                                                    1980
                                                                                                           1981
                                                                                                                  1982
                                                                                                                         1983


                                                                                                                                       1985


                                                                                                                                                     1987
                                                                                                                                                            1988


                                                                                                                                                                          1990


                                                                                                                                                                                        1992
                                                                                                                                                                                               1993
                                                                                                                                                                                                      1994
                                                                                                                                                                                                             1995
                      -1000

                                Development Data Group, The World Bank. 2008. 2008 World Development Indicators Online. Washington, DC: The World Bank.
                                                              Net Foreign Direct Investment
                      10000


                       9000


                       8000


                       7000
Million current US$




                       6000
                                                                                                                                           Iran, Islamic Rep IRN
                       5000                                                                                                                Korea, Rep KOR
                                                                                                                                           Malaysia MYS
                       4000
                                                                                                                                           Thailand THA
                       3000


                       2000


                       1000


                         0
                               1997      1998      1999       2000      2001      2002       2003      2004      2005       2006


                              Development Data Group, The World Bank. 2008. 2008 World Development Indicators Online. Washington, DC: The World Bank.
                                Military Expenditure as a % of GDP
6



5



4

                                                                                                                Iran, Islamic Rep IRN
3                                                                                                               Korea, Rep KOR
                                                                                                                Malaysia MYS
                                                                                                                Thailand THA
2



1



0
    1988     1990      1992       1994       1996      1998       2000      2002       2004       2006



      Development Data Group, The World Bank. 2008. 2008 World Development Indicators Online. Washington, DC: The World Bank.
                                     Export of Goods and Services as a % of GDP
           140



           120



           100



           80
% of GDP




                                                                                                                            Iran, Islamic Rep IRN
                                                                                                                            Korea, Rep KOR
           60
                                                                                                                            Malaysia MYS
                                                                                                                            Thailand THA
           40



           20



             0




                 Development Data Group, The World Bank. 2008. 2008 World Development Indicators Online. Washington, DC: The World Bank.
Infrastructure Investment   In 2008
                             154.4
and Private Participation    billion
               Range of Privatization Techniques
               Private Sector Participation (PSP)



    Supply                                                Perfor-
               Technical        Sub       Management                             BOT
   and Civil                                              mance                                   Dives-
                Assistance     Contrac-     Contracts               Leasing      and       BOO
    Works                                                 Based                                   titure
               Contracts        ting         (MC)                             Concession
  Contracts                                                MCs




Public                       Responsibility for Investments and Risk Allocation                  Private


    0                            Duration (years) of private involvement                         ...

Source: Guislain P (1997) , The Privatization Challenge

                                                                                                           11
Build-Operate and Transfer/Own and Asset Divestiture


    Supply                                                  Perfor-
                Technical        Sub        Management                             BOT         BOO,
   and Civil                                                mance                                        Dives-
                 Assistance     Contrac-     Contracts                Leasing      and      BBO, LDO,
    Works                                                   Based                                        titure
                Contracts        ting         (MC)                              Concession Wraparound
   Contracts                                                 MCs




 Public                       Responsibility for Investments and Risk Allocation                        Private


     0                             Duration (years) of private involvement                              ...

  Source: Guislain P (1997) , The Privatization Challenge

                                                                                                              12
  Financing the Privatization Process -
            Project Finance

Overview
                                                     Private led initiatives
                                                      with private funding
                                                       “Project Finance”
                                                           BOT/BOO
                            Corporatization and
                              Privatization with
                            Joint public / private
                                Funding (PPP)
    Government Provision
     Telecom, Electricity
      Infrastructure,...




                                                                               13
                  Logical Consequence of
               Preconditions to Privatization

                                                                                    Introduce Modern
                                                                                      Accounting and
                                                                                         Auditing


  Legal Frameworks                                                 Eliminate Government
          and                                                           Price setting
Appropriate Incentives
                                                 Introduce Competition
                                                  Sector Liberalization


                           Restructure SOEs in
                             Corporate Form
                            “Corporatization”
 Create legal structures
  for property rights,
   corporations, and
       contracts


                                                                                                  14
           Infrastructure Project Finance 1990-2008 (millions $)

                                                                                 123,864.00


                                                                                                     107,732.00




                        50,605.00
            45,228.00                      45,096.00

                                                              34,682.00




2,396.00


  Iran      Indonesia   Malaysia          Philippines          Thailand              India              China

                                    Source: The World Bank Group: Private Participation in Infrastructure Database
What do investors look for?

1.Risk associated with a project

2.Returns and compensation for risks
     Risks



•Financial Risk

•Political Risk

•Force Majeure Risk

•Economic Risk

•Currency Risk

•Technological Risk

•Input Risk

•Environmental Risk

								
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