MANILA, PHILIPPINES - The Asian Development Bank (ADB) is significantly expanding its private sector development (PSD) activities in the Pacific Islands, with a current portfolio of 63 private sector reform projects, up from 20 projects last year - effectively tripling the scope of PSD operations in the region.
This expansion has been largely enabled by the Pacific Private Sector Development Initiative (PSDI), cofinanced by the Australian Agency for International Development (AusAID), which provides an innovative mechanism to rapidly respond to reform opportunities in the Pacific Islands, as well as to strengthen analysis and reform advocacy, and foster dialogue between private and public sectors.
ADB's private sector development reform activities are designed to improve the business environment through innovative approaches to improve access to finance for the poor and unbanked, reform the commercial legal framework, and measure increases in private sector participation in the delivery of essential services.
"The demand from Pacific Island governments and private sector organizations for support in promoting policy related reform has been impressive," says Philip Erquiaga, Director General for ADB's Pacific Operations. "This demonstrates that ADB's assistance for private sector reform is responsive to the needs and conditions on the ground and is focused on concrete results," he adds.
ADB is leading the way in addressing financial infrastructure problems in the Pacific, especially expanding the frontiers of access to finance for the unbanked or under-banked. ADB is exploring new technologies to further expand financial services to rural areas, partnering with commercial lending institutions with a commitment to microfinance, and strengthening collateral frameworks in the region.
"The situation in the Pacific Islands requires smart solutions, such as piloting new microfinance technologies to reach the unbanked and better serve the under-banked, unlocking the power of collateral, and improving financial literacy especially in rural areas," says Naomi Chakwin, Regional Director of ADB's Pacific Liaison and Coordination Office in Sydney. "Our approach combines country specific interventions with regional approaches and dialogue in terms of sharing of experience, benchmarking, leveraging technology solutions, and partnering up with private sector and other donor agencies."
ADB's private sector partnerships in the Pacific region currently include work with microfinance service providers to expand their rural outreach in Papua New Guinea (PNG), Samoa, Timor-Leste and Vanuatu; collateral reform in Federated States of Micronesia, Republic of Marshall Islands, Palau, PNG, Samoa, Solomon Islands, Timor-Leste, Tonga and Vanuatu; business law reform in Cook Islands, Fiji Islands, Palau, Samoa, Solomon Islands, Tonga, and Vanuatu; and company registration reform in Samoa, Solomon Islands, and Vanuatu.