Regions and Countries

	Table of Contents
p. 14 of 20 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies A. Infrastructure B. Social Infrastructure and Environment C. Environment D. Governance Dimensions of ADB Operations E. Gender Dimensions of ADB Operations F. Private Sector Development IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Federated States of Micronesia : III. Sector Strategies

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F. Private Sector Development

35. In FSM, pressures to create more jobs and business opportunities in the private sector stem from: (i) the decline of the public sector leaving many retiring employees searching for jobs in the private sector, (ii) the decline in household income mainly due to the decreasing external assistance resulting in more demand for formal and informal employment, and (iii) continuing population growth and youthful demographic pattern resulting in a continuously high demand for job opportunities. Private sector-led economic development is a major strategic objective of the country assistance plan. Key policy issues in support of the strategy are the liberalization of factor markets including the removal of restrictive trade and investment practices.

36. A three year-phased Public Enterprise Privatization and Corporate Governance TA coupled with a proposed Private Sector Development Project in 2001 in support of establishing a non-governmental land intermediary agency and improved regulatory environment will assist the Government in achieving this objective. FSM is also planning a Private Investment Symposium in 2000. The symposium aims at brokering specific domestic and foreign ventures based on the recommendations of ADB sponsored second Banking and Private Sector Development Symposium (October 1998). ADB will support the Symposium through the ongoing EMPAT II TA and the proposed privatization TA with possible inputs from a proposed RETA for Financial Sector Study in Selected PDMCs. ADB funded regional agencies including Kula Fund, South Pacific Project Facility (SPPF), and Foreign Investment Advisory Service (FIAS) will also participate in the symposium. Finally, the TA program for law and development and basic skills development (2001) will also contribute to creating a conducive environment of private sector development.

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