Database and Development Indicators

Investment Climate and Productivity Study

Background

The Investment Climate and Productivity Study (ICS) is an undertaking of the Asian Development Bank, in collaboration with the World Bank. Broadly, it examines constraints to firm growth and productivity in selected Asian developing countries to help identify specific policy and institutional reforms to promote investments and improve productivity. The ICS surveys were initially undertaken in the Philippines and Indonesia in 2003, followed by Sri Lanka in early 2004, and Lao PDR in 2005.

Objectives

The goal of the ICS is to help improve the environment for investment and productivity growth, thereby fostering private sector development that contributes to sustained poverty reduction.

The specific objectives of ICS are:

1. To examine at the firm level constraints and stumbling blocks to investment and productivity increases.
2. To identify concrete ways to effectively deal with the impediments to investment and productivity growth.
3. To undertake cross-country comparative analysis to see how a country is faring in investment competitiveness and productivity.

Coverage and Progress

The survey gathers information on the constraints faced by firms in doing business, such as those relating to physical and financial infrastructure, business-government relations, and labor. Further, it obtains information on factors that determine productivity.

Philippines. The survey in the Philippines covered 716 manufacturing firms in the economy’s four most important industries in terms of contribution to the country’s GDP, namely, food and food processing, garments, textiles, and electronics. These firms are located in the country’s major industrial centers (Metro Manila, CALABARZON, Metro Cebu, and Davao).

The key results of this survey were presented in the dissemination workshop held last 20 January 2005. The full report [PDF: 4,387 kb | 86 pages] "Improving the Investment Climate in the Philippines" and the brochure [PDF: 185 kb | 16 pages] "Philippines: Moving Toward A Better Investment Climate" are available online.

Indonesia. The survey in Indonesia was carried out in the second half of 2003, covering 713 manufacturing establishments located in 11 provinces (Jakarta, Banten, West Java, Central Java, Yogyakarta, East Java, North Sumatera, South Sulawesi, East Kalimantan, Riau Islands, and Bali). Ten sub-sectors of the manufacturing industry, selected on the basis of their importance in terms of value added for 1996-2000, comprised the firms surveyed, as follows: (1) food and beverages, (2) tobacco, (3) textile, (4) garments, (5) leather and footwear, (6) wood, (7) paper, (8) chemicals and chemical products, (9) electrical appliances, and (10) transport equipment. A dissemination workshop, where survey findings were presented, was held last May 2005. Read the report, Improving the Investment Climate in Indonesia.

Sri Lanka. Two types of surveys were undertaken in Sri Lanka, one in the urban sector (carried out by ADB) and the other in the rural sector (carried out by the World Bank). The urban survey covered 449 formal establishments in manufacturing (textiles, garments, food and beverages, rubber products, and industrial equipment) and 94 firms in the tourism and information technology sectors. The rural survey covered 1,327 nonfarm enterprises and 555 households not participating in rural nonfarm activities. The full report, produced jointly by ADB and the World Bank, is available here.

Lao PDR. Two components of Lao ICS include the survey and cross border trade study. The survey of enterprises is almost complete. It is based on a representative sample of about 300 businesses in Vientiane, Oudomxay, Xayaboury, Champasack, Savannakhet, Luangprabang, and Luangnamtha; and focuses on the following key sectors: garments, textiles and handicrafts, food and beverages, construction materials, wood processing, and tourism. A consultation seminar will be held on 6 October 2005 to brief the government, business sector, and other groups on the ICS progress to date and to present preliminary findings from the survey, as well as to discuss a tentative outline of the investment climate assessment report.

The study on cross border trade is well underway. Information campaign and kick-off of the Savannakhet Input-Output survey operation covering 100 establishments was held last 25 July 2005. Analysis and dissemination of results are targeted by the end of December 2005.

For more information on ICS, please visit the World Bank ICS website.