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US$8.7 Million Grant to Boost Private Sector Development in the Pacific
MANILA, PHILIPPINES - An US$8.7 million technical assistance (TA) grant cofinanced by ADB and the Government of Australia will help promote private sector development in order to support long-term economic growth in Pacific developing member countries.
Development progress in the Pacific region is not encouraging. Economic growth has averaged less than 1% annually over the past 30 years. Critical investments in basic infrastructure and human potential (such as health and education) have lagged. Youth unemployment is high and rising, fueling social strains.
The situation is triggering significant discussions on private sector reform among Pacific leaders in government, business, and civil society. ADB, in turn, has elevated the development of the private sector as a major thrust in its Pacific Strategy for 2005-2009.
“The low levels of competitiveness, investment, and economic growth in the Pacific region are largely due to the high costs of doing business and weaknesses of institutions,” says Naomi Chakwin, Regional Director for ADB’s Pacific Liaison and Coordination Office in Sydney. “The private sector can only create job opportunities and deliver basic social services when the environment in which it operates is welcoming to business.”
The work under the grant will focus on strengthening expertise and resources needed to transform the high profile discussions into effective policy change.
In line with findings of ADB’s private sector assessments in the region, the TA will seek to reform state-owned enterprises and promote public-private partnerships, strengthen the financial sector, and improve legal and regulatory business environments.
Specifically, the TA will conduct diagnostic studies, provide technical expertise on priority reform areas, strengthen capacities in relevant government agencies and organizations, support regional initiatives, and communicate good practice, reform opportunities and results.
“The private sector needs to be engaged, and the communication gap between governments and businesses must be bridged. Reform champions should also be supported,” says Ms. Chakwin.
The Australian government, through its overseas development arm AUSAID is financing $7.6 million of the TA's cost. ADB will provide the balance of $1.1 million. The TA will be carried out over five years to 2011.