A long-running program to improve the business environment in the Pacific has succeeded in removing numerous barriers to private sector investment and entrepreneurship, according to an Asian Development Bank (ADB) report released today.
Since 2006, ADB’s Pacific Private Sector Development Initiative (PSDI) has worked to alleviate poverty by promoting inclusive economic growth through reforms that encourage private sector investment and entrepreneurship. PSDI’s latest annual report, A Decade of Reform, summarizes many successful reforms Pacific countries have enacted with its support.
“PSDI’s achievements over the past decade demonstrate that strong analytical work, sustained advocacy, and open and cooperative engagement with Pacific island governments, institutions, and the private sector are requirements for reform success,” said Liliana Warid, Private Sector Development Specialist with ADB’s Pacific Liaison and Coordination Office. “Across the Pacific, PSDI has made it easier for formal businesses to start-up and grow, thereby increasing economic activity and spurring job creation.”
The report showcases 10 of PSDI’s most significant reform initiatives, including:
• The development of secured transaction frameworks in eight Pacific countries that have made it possible for lenders to easily accept movable assets such as vehicles, machinery, or accounts receivable as collateral for loans. PSDI support in Solomon Islands and Tonga has seen financing provided to cocoa exporters and vanilla farmers using their crops and stock as collateral.
• The creation of online business registries in Samoa, Solomon Islands, Tonga, and Vanuatu that have reduced the average time it takes to register a new business from around one month to approximately one day.
• The restructuring and/or privatization of 67 state-owned enterprises (SOE), leading to improved financial and operational performance. The average return on equity of the SOE portfolios in eight Pacific countries improved from -5.6% in 2008 to 0.6% in 2014.
• Strengthening the capacity of Papua New Guinea’s (PNG) competition regulator, which helped the country improve competition and reduce costs in the telecommunications sector, and assistance to Samoa to pass its Competition and Consumer Protection Act, which provides greater protection to both consumers and business owners.
• Innovative approaches to engaging women in the private sector through business-creating pilot projects in PNG, Solomon Islands, and Tonga.
An extended chapter in the report on the economic empowerment of women examines ways to improve women’s role in the formal economy. It highlights the importance of creating women-friendly business environments, such as online business registration processes that are affordable and easy to access, and women-friendly business entities, such as community companies and cooperatives.
PSDI is cofinanced by the Government of Australia, the Government of New Zealand, and ADB.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members—48 from the region.