12 March 2017

A Decade of Reform: PSDI 2015-2016 Annual Progress Report published

PSDI Annual Report 2015-2016 cover
PSDI’s latest annual report, A Decade of Reform, looks back on our work since 2006, noting numerous successes in removing numerous barriers to private sector investment and entrepreneurship.

“PSDI’s achievements over the past decade demonstrate that strong analytical work, sustained advocacy, and open and cooperative engagement with Pacific island governments, institutions, and the private sector are requirements for reform success,” said Liliana Warid, Private Sector Development Specialist with ADB’s Pacific Liaison and Coordination Office. “Across the Pacific, PSDI has made it easier for formal businesses to start-up and grow, thereby increasing economic activity and spurring job creation.”

The report reviews PSDI’s efforts to alleviate poverty by promoting inclusive economic growth through reforms that encourage private sector investment and entrepreneurship. It showcases 10 of our most significant reform initiatives, including:

The development of secured transaction frameworks in eight Pacific countries that have made it possible for lenders to easily accept movable assets such as vehicles, machinery, or accounts receivable as collateral for loans. PSDI support in Solomon Islands and Tonga has seen financing provided to cocoa exporters and vanilla farmers using their crops and stock as collateral.

The creation of online business registries in Samoa, Solomon Islands, Tonga, and Vanuatu that have reduced the average time it takes to register a new business from around one month to approximately one day.

The restructuring and/or privatization of 67 state-owned enterprises (SOE), leading to improved financial and operational performance. The average return on equity of the SOE portfolios in eight Pacific countries improved from -5.6% in 2008 to 0.6% in 2014.

Strengthening the capacity of Papua New Guinea’s (PNG) competition regulator, which helped the country improve competition and reduce costs in the telecommunications sector, and assistance to Samoa to pass its Competition and Consumer Protection Act, which provides greater protection to both consumers and business owners.

Innovative approaches to engaging women in the private sector through business-creating pilot projects in PNG, Solomon Islands, and Tonga.

An extended chapter in the report on the economic empowerment of women examines ways to improve women’s role in the formal economy. It highlights the importance of creating women-friendly business environments, such as online business registration processes that are affordable and easy to access, and women-friendly business entities, such as community companies and cooperatives.

3 March 2017

PSDI hosts Fifth Pacific Business Registries Workshop

 PSDI hosted its 5th Pacific Business Registries Workshop in Sydney on 2-3 March.

The workshop, co-hosted with the New Zealand Companies Office, brought together staff from business and secured transactions registries in 13 Pacific countries as well as government and private sector representatives and technical experts.

Participants discussed issues confronting Pacific registries, recent developments, and the opportunities for, status of, or outcomes from registry reforms.

“Most of the participants have benefited PSDI support to modernise their business laws and establish online registries that have reduced red tape and lifted barriers to business,” said PSDI International Business Law Expert Aaron Levine.

PSDI international business law consultant Terry Reid welcomes participants to the
workshop at ADB's Pacific Liaison and Coordination Office.
Each country’s delegation presented on the status of their registry. These included a number of countries that had recently completed reforms, such as:
Vanuatu, which implemented an online registry covering companies, business names, and charitable associations
Papua New Guinea and Samoa, which have developed online personal property securities registries for loans secured by movable property, such as inventory, agricultural goods and equipment, accounts receivable, and machinery
Solomon Islands, which now has an online registry that covers foreign investment, companies, and business names, and
Tonga, which is finalizing a new foreign investment act that will make it easier for overseas investors to invest.

“There are consistent benefits when company registries are moved online,” said PSDI International Business Law Expert Terry Reid during an interview at the workshop with the Fiji Sun.

“First, transactions costs fall, as there is less work and resources required in processing registrations, and the personal cost of using these services fall, as there is usually no longer any need for travel.

“The overall time needed for registrations reduces enormously: average pre-reform processes take three-to-four weeks while the post-reform average is one-to-two days.

“This increased convenience and reduced costs drives increased registrations—we see the rate of company registrations almost double once registries move online. And this, in turn, leads to more businesses participating in the formal economy.

“In addition, online registries are a huge help to remote communities. The Pacific is a big place, and these online platforms are an excellent vehicle for allowing near universal access to what were previously hard to access registration services.”

He added the increased accessibility and reduced cost online registries helped women business owners formalize their businesses.

PSDI International Business Law Expert Aaron Levine presents on recent developments
in Pacific registry reform. At the close of the workshop Mr Levine announced he would
soon be ceasing work with PSDI, prompting a farewell song from the participants,
many of whom he had worked with personally over the years.
Other presentations were delivered at the workshop by technical specialists and PSDI experts, who discussed topics such as opportunities for governments to accept mobile and internet-based payments, and the challenges of compliance with international anti-money laundering standards.

“We are helping some business registries to establish online processing of payments, which will make these services even faster and more accessible and provide a model that can be replicated by other government departments,” said ADB Private Sector Development Specialist Liliana Warid.

“We will also be continuing to assist the governments of Cook Islands, Fiji and Timor-Leste with secured transactions reform processes."

Participants also heard how recent reforms have led to Pacific registries being considered global leaders.

“I would say with regards to business law reform and registries, really, the Pacific, in some aspects, is leading the world,” said PSDI Registries Expert Anthony Frazier in an interview with Pacnews at the workshop.

“PSDI through ADB has been very successful. We think there’s been a significant impact on ministries of commerce and various agencies that run these registries, and the law reforms have made it much easier for people to start their business. That’s the whole point: for people to be able to make their own livelihood,” said Mr Frazier.

“We’ve also put in laws that make it easier for people to use moveable property as collateral for loans. Banks often times use land as collateral. In the Pacific not many people have access to land, so the new laws that allow movable property like equipment, trucks, restaurant equipment, even accounts receivable to be used as collateral really opens up business opportunities for small business to gain credit where they did not have the opportunity to before.”