“To meet the growing energy demand, much of this will need to be renewable energy,” he said.
“New transmission and cross-border connections will be required to unlock the least cost renewables and maintain network reliability.
“Increased energy efficiency also will be essential to help reduce the pressure of rising energy demand and to decouple GDP growth from emissions.
“The demand for green project engineering design, construction and advisory services will be substantial. Estimates place the value of these services at over $10 billion a year by 2030.”
The $2 billion South-East Asia Investment Financing Facility will be managed by Export Finance Australia.
The more than 100 company executives at the CEO summit will include bankers Matt Comyn and Shemara Wikramanayake, Woodside’s Meg O’Neil and Singtel’s Yuen Kuan Moon.
In recommending the investment facility in his report to the government last year, Mr Moore said there were massive infrastructure needs in the region in green energy transition, rail, water, airports and roads.
“Through targeted interventions, government can play a role in derisking (including lowering risk perceptions) and crowding in private sector investment to help catalyse productive infrastructure projects,” he said.
Political risk
“Australian government participation with Australian investors and service providers will assist in managing often lengthy project development times, as well as helping manage the political risk involved in long-dated investments.”
Other recommendations to be adopted by the government are extending Business Validity Visas from three to five years and extending the 10-year Frequent Traveller Scheme to eligible ASEAN member states and Timor-Leste; establishing “landing pads” in Jakarta and Ho Chi Minh City to help Australian businesses boost technology services exports to South-East Asian markets; appointing 10 “business champions” to strengthen trade and investment ties with each country in South-East Asia; and a $140 million extension of the Partnerships for Infrastructure Program.
At the ASEAN summit in Cambodia in 2022, Mr Albanese announced he had asked Mr Moore to investigate how to increase two-way investment between Australia and the ASEAN bloc, which is collectively Australia’s second-largest trading partner.
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In his report, released at the subsequent ASEAN summit in Jakarta last October, Mr Moore made 75 recommendations, of which the Albanese government, at a cost of $90 million, adopted three.
These were the creation of investment deal teams which involved sending specialists into the region to facilitate investments, a South-East Asian business exchange program, and establishing an intern pilot program for young professionals.
“These measures are a clear signal the Australian government’s commitment to deeper economic engagement,” Mr Moore said at the Melbourne meeting on Monday.
At a business breakfast on Tuesday, on the sidelines of ASEAN, Business Council of Australia chief executive officer Bran Black will announce his organisation’s own exchange program for young professionals, which will partner BCA companies with ASEAN counterparts.
“Australia needs to build deeper business relationships with ASEAN countries and that’s why it is so important government implements Nicholas Moore’s plan,” Mr Black said.
“It is also vital we use these partnerships to strengthen our supply chains across the region, particularly as we transition to clean energy and net zero.”
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Other notable recommendations by Mr Moore include examining the feasibility of “political risk insurance” to comfort investors worried about sovereign risk, streamlining the foreign investment review process, and a continued need to keep diversifying markets away from China, despite the most recent stabilisation of the trade and diplomatic relationship with Beijing.
Treasurer Jim Chalmers, who will also address the CEOs on Tuesday, said “ASEAN in so many different ways is really the hope of the side when it comes to two-way trade”.
Potential market
Mr Moore’s report warned Australia risked being left behind in a region expected to continue its strong economic growth, at a forecast compound average growth rate of 4 per cent to 2040, twice the forecast rate of the developed nations.
“Australia’s direct investment into South-East Asia has stagnated in
recent years, while overall direct investment into the region from other countries has increased materially,” it says.
“By 2040, projections suggest that – based on the after-tax income of households – the potential consumer market in South-East Asia will be 10 times larger than Australia’s.”
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The report focuses on opportunities in 10 key industry sectors: agriculture and food; resources; green energy transition; infrastructure; education and skills; visitor economy; healthcare; digital economy; professional and financial services; and creative industries.
“By 2040, South-East Asia as a bloc is likely to be the fourth-largest economy in the world. Fifty-five per cent of the region’s 687 million population is under the age of 35, and this youthful demographic forms a base for a large, productive working-age population to 2040 and beyond.”
The paper details specific plans for each of Brunei-Darussalam, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, Timor-Leste and Vietnam, and East Timor. Myanmar is excluded because of its ongoing internal crisis.
