IFC Launches Renewed Effort to Boost Business and Cut Poverty in the Pacific
Sydney, July 21, 2006 —The governments of Australia, Japan, and New Zealand governments have backed an ambitious five-year plan from the International Finance Corporation to boost private sector growth as a means of reducing poverty levels in the Pacific island countries.
IFC’s Private Enterprise Partnership – Pacific office in Sydney will work to improve capital flows, corporate governance, technical skills, and government regulations that impact on the business environment in the region’s island nations.
“We believe that there is a very strong link between government policy and regulations and the employment-generating private sector environment,” said PEP-Pacific’s Acting General Manager, Rob Simms.
While embracing all of the independent countries of the Pacific, PEP-Pacific’s plan pays particular attention to Papua New Guinea and Timor Leste.
“Papua New Guinea is the largest country in the region and has some unique development needs,” Mr Simms said. “Similarly, we recognise that Timor Leste has a very great need for development assistance.”
A PEP-Pacific office has already been established in Papua New Guinea’s capital, Port Moresby.
Formerly known as the IFC’s Pacific Enterprise Development Facility, PEP-Pacific’s efforts will be funded by Canberra, Tokyo, and Wellington in line with their view that the private sector holds the key to the region’s economic development.
“This initiative will promote enterprise, investment, and growth by addressing the impediments to private sector development,” said Australia’s Foreign Minister, Alexander Downer, following the funding agreement.
IFC, the private sector arm of the World Bank Group, has long regarded poor access to capital as one of the greatest impediments to private sector growth in general and to development of the
region’s small and medium enterprises in particular.
For this reason, IFC’s previous facility worked closely with the region’s financial institutions in an effort to improve capital flows to the Pacific’s cash-starved small and medium enterprises as well as microenterprises.
Simms cited key examples of PEDF’s recent work: “We provided technical assistance to Papua New Guinea’s Bank South Pacific with a focus on credit appraisals. In Samoa, we provided tier-two capital for the National Bank of Samoa and, over five years, delivered a comprehensive technical assistance package that covered the entire spectrum of banking activity, including risk management and corporate governance.”
Simms pointed out that the PEDF was also active in other areas of the Pacific economies, ranging from fisheries to tourism and agriculture. He said that PEP-Pacific would continue to work with governments, industry groups, and export-oriented organizations to improve the environment for all sectors of business.
“The PEDF has been engaged in everything from training programs for women in Papua New Guinea’s fisheries sector to e-commerce programs for small tourism operators in Samoa. PEP-Pacific will continue to provide that range of assistance,” he said.
“In recent years, IFC has also invested in a number of projects in the region, including microfinance in Papua New Guinea, a hospital in Samoa, and hotels in Fiji. PEP-Pacific will continue to facilitate access to IFC financing for commercial projects where appropriate.”
PEP-Pacific will also work to enhance the relationship between the region’s public and private enterprise sectors.
IFC, founded 50 years ago, has 178 member nations and a portfolio of investments in private sector enterprises in the developing world worth more than AUD $ 20 billion.
The Corporation’s mission is to promote sustainable private sector investment in developing countries as a means of helping to reduce poverty and improve people’s lives.
“IFC’s significantly enhanced Pacific program will allow us to advance our mission in what is arguably one of the world’s most remote and economically challenged regions,” Simms concluded.
PEP-Pacific is a multidonor initiative set up by IFC with its head office in Sydney, Australia. Its aim is to improve the business environment for small and medium enterprises by increasing access to finance and to stimulate private sector investment through targeted programs in the Pacific Islands, Papua New Guinea, and Timor Leste. PEP-Pacific’s donors are Australia, IFC, Japan, and New Zealand.
The mission of IFC (www.ifc.org) is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications.
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