HA NOI, VIET NAM – The Asian Development Bank (ADB) and Government of Australia are providing combined assistance of $10.5 million to promote private sector development in Greater Mekong Subregion (GMS) countries ahead of the inception of the ASEAN Economic Community (AEC) in 2015.
“The private sector in Cambodia, Lao People’s Democratic Republic, Myanmar and Viet Nam is still relatively underdeveloped and there is a pressing need to improve the regulatory environment so that businesses can become more competitive,” said Tomoyuki Kimura, ADB’s Country Director in Viet Nam. “This issue is increasingly important ahead of the start-up of the AEC which is expected to open up substantial new regional opportunities for Greater Mekong Subregion companies.”
The assistance pledge comes ahead of the 5th GMS Summit on December 19-20 in Bangkok, Thailand, where the agenda will focus on endorsement of a regional investment framework and an assessment of progress made under the ongoing regional cooperation program.
ADB’s technical assistance grant of $500,000, with cofinancing of $10 million from the Government of Australia, will support the Mekong Business Initiative—a policy advisory and advocacy facility which promotes private sector development in the GMS. Its work will focus on preparing reforms to improve the enabling and regulatory environment for private business, creating more cross border opportunities for companies in Cambodia, Lao People’s Democratic Republic (Lao PDR), Myanmar and Viet Nam. This will help pave the way for more firms to take part in global supply chains which are expected to expand with the advent of the AEC.
The need for a strong and fair regulatory environment is especially important for small and medium-sized enterprises (SMEs) who make up well over 90% of all businesses, and 75% of employment in Cambodia, Lao PDR, Myanmar and Viet Nam. As many of these firms operate informally they often struggle to obtain access to finance and other support services.
The Mekong Business Initiative will engage closely with Thailand and the People’s Republic of China through the GMS Business Forum. It will also seek partnerships with strong regional and global institutions promoting good business practices. Among the targeted impacts will be an increase in the number of new private companies registered in the 4 countries and a rise in the number of SMEs which export. The Mekong Business Initiative activities will run from December 2014 to November 2017.
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, it is owned by 67 members – 48 from the region. In 2013, ADB assistance totaled $21.0 billion, including co-financing of $6.6 billion.