In class, we discussed whether there were guidelines for purely private or public deals. The professor’s response was that, from the public side, the government was interested in policies that would not break their limited budgets, but which would be able to bring jobs and vibrancy to their countries. Governments have the ability to decide zoning and floor area ratio to help determine density. They can also provide the essential infrastructure that attracts businesses, such as electricity, water and transit (many of these can be in the form of PPPs or private entities regulated by the government).
However, there seemed to be a sense that the primary role of government is to promote business investment. It is important to remember that while development is an important goal, the main role of government is, arguably, to promote the interests of citizens. In our discussion on Friday, we seemed overlook this. The question, “Was It Worth It [for the promoters to make the long term investment in HCMC]?” came back as a negative in the long term because the government eventually caused problems for the promoters. It surprises me to hear this sense of unfairness and betrayal when governments no longer extend the benefits they had previously extended. Their economies are maturing and the situation evolves. The government’s concern should be to represent the people and to do what is best for its citizens. At times this is to focus on economic development and easing the private sector entry, and at other times this role is to put into place a system that ensures a smoother transition from aid to trade. Just as shareholders expect a return on their investment and risk appetite, citizens expect a return on government policies and GDP growth. Continue reading