44477 Private Enterprise Partnership - Pacific Pacific Public Disclosure Authorized Quarterly FOURTH QUARTER 2005 - 2006 Year in Review Private Enterprise Partnership - Pacific A New Name and needs,” Mr Simms said. “Similarly, we recognise East Timor has a very great need for development assistance.” Co-financed by Renewed Support Public Disclosure Authorized Australia for IFC’s Sydney PEP-Pacific offices have recently been established in the Papua New Guinea capital of Port Moresby International Finance Corporation Based Facility and in Dili, East Timor. Japan PEP-Pacific’s programs will be funded by New Zealand The International Finance Canberra, Tokyo and Wellington in line with their view that the private sector holds the key Corporation’s (IFC) Sydney based to the region’s economic development. Managed by facility has a new name, Private Enterprise Partnership – Pacific “This initiative will promote enterprise, (PEP-Pacific), and a renewed investment and growth by addressing the International Finance Corporation, a impediments to private sector development,” member of The World Bank Group mandate from its donors. said Australia’s Foreign Minister, Alexander Public Disclosure Authorized The Private Enterprise Partnership- Formerly known as Pacific Enterprise Development Downer, following the funding agreement. Pacific (PEP-Pacific) was established Facility (PEDF), the new name brings the facility as the South Pacific Project Facility in into line with names given to similar IFC facilities PEP-Pacific will also work to enhance the 1990. The primary objective of PEP- in other parts of the world. relationship between the region’s public and Pacific is poverty reduction through private enterprise sectors. employment-generating private During the year the Australian, New Zealand and sector development, underpinned Japanese governments agreed to new funding by the regional themes of improving The IFC, the private sector arm of the World access to finance and tourism and for the Sydney facility and endorsed the IFC’s Bank Group, was founded 50 years ago. The a program promoting business ambitious five year plan to boost private sector Corporation’smission (www.ifc.org) is to enabling environments. PEP-Pacific growth as a means of reducing intractable promote sustainable private sector investment works with institutions, organisations poverty levels in the Pacific, Papua New Guinea in developing and transition countries, helping and associations to strengthen and and East Timor. to reduce poverty and improve people’s lives. stimulate small to medium enterprises IFC finances private sector investments in the so that they can grow, helping to PEP–Pacific will continue to work to improve developing world, mobilizes capital in the create more and better jobs; a better capital flows, corporate governance, technical international financial markets, helps clients standard of living; and alleviation of skills and government regulations that impact on improve social and environmental sustainability, poverty. the business environment in the region’s island and provides technical assistance and advice to Public Disclosure Authorized PEP-Pacific member countries are nations. governments and businesses. From its founding Federated States of Micronesia, Fiji, in 1956 through FY05, IFC has committed more Kiribati, Marshall Islands, Palau, Papua “We believe that there is a very strong link than $49 billion of its own funds and arranged New Guinea, Samoa, Solomon Islands, between government policy and regulations $24 billion in syndications for 3,319 companies Tonga, Timor-Leste and Vanuatu. and the employment generating private sector in 140 developing countries. IFC’s worldwide environment,” said PEP-Pacific’s Acting General committed portfolio as of FY05 was $19.3 PEP-Pacific is structured to respond Manager Rob Simms. billion for its own account and $5.3 billion held effectively to the disparate needs of for participants in loan syndications. the geographically, economically and While embracing all of the independent countries socially diverse region in which we of the Pacific, the PEP-Pacific plan pays particular operate. “The IFC’s significantly enhanced Pacific attention to Papua New Guinea and East Timor. program will allow us to advance our mission in what is arguably one of the most remote and “Papua New Guinea is the largest country in economically challenged regions of the world,” the region and has some unique development Mr Simms concluded. The Year in Review and the Year Ahead – Rob Simms (Acting General Manager) The year to 30 June, 2006 was a year of transition and achievement. The year started with a submission to Donors of a new five year strategy. In the previous year, PEP-Pacific’s business model had completed a shift from direct interventions with individual entrepreneurs to a new, structured program delivering capacity building services to individuals and organisations servicing the business community. Going forward, PEP-Pacific will focus has been appointed Country Coordinator for Papua New Guinea on priority industry sectors with a and Rainer Venghaus has been appointed Country Coordinator specified geographical focus to maximise for East Timor. Both offices have been set up in the premises of economic growth – domestic and foreign The World Bank in the respective capital cities, making it easier investment, private sector development to coordinate our activities and maximising the efficiencies of and employment growth. It will place shared resources in both cases. Following the execution of an greater emphasis on areas where IFC has a comparative advantage, Establishment Agreement with the government of East Timor, we such as access to finance and business climate development. PEP- have commenced recruiting further staff, with Johanna Johansson Pacific’s new strategy was developed in consultation with member joining PEP-Pacific, East Timor in July. government development agencies, business associations and other development partners to ensure compatibility with their programs Other staff have been recruited to enable us to carry out our and objectives. mandate. Jen Bartlett has joined John Perrottet in Tourism and Alan Moody has joined to deliver our Business Enabling Environment This approach, with a focus on improving the climate for program. Both Jen and Alan will be based in Sydney, but their investment, is fully aligned with the strategies of IFC, FIAS and the work will cover all eleven member countries. Alan will also work World Bank Group in the region. In essence, PEP-Pacific will focus with our colleagues at FIAS (Foreign Investment Advisory Services on three main themes: Improving Access to Finance; Tourism; and – a joint IFC, World Bank initiative which works with governments Improving the Business Environment in member countries. PEP- to improve the investment climate) and the World Bank. Pacific’s new Strategic Plan was submitted to a meeting of Donors in February, 2006 and was unanimously endorsed. A feature of PEP-Pacific will be improved monitoring and evaluation of our projects. During the year, our Administration A key feature of the new strategy is the opening of two new Manager, Cathy St.Ledger worked with IFC’s Monitoring & offices – one in Port Moresby, Papua New Guinea and one in Dili, Evaluation Team in Washington, USA to develop improved models East Timor. Papua New Guinea is the largest country in which we to help us objectively measure the development impact of our operate with great potential and a variety of challenges. East Timor work. Going forward, this will require a better understanding of is a new nation in the making which requires an on-the-ground baseline data and cooperation with client partners to measure presence to identify and assist with its private sector development outcomes and impact. The objective of the improved monitoring needs. Following endorsement of the proposal to establish the new and evaluation process is to guide us towards optimising the offices, work commenced to staff and equip them. Peter Cusack impact of our work. Capital – The key to SME Development in the Pacific Efficient, private sector oriented banking services are essential if SMEs are to grow and prosper in the Pacific. With a mandate to alleviate poverty by assisting with the development of the private sector, PEP-Pacific continued to focus during the 2005-06 year on improving banking services and the flow of capital throughout the region. In Papua New Guinea, PEP-Pacific assisted the country’s largest the Facility’s overall objective in the Pacific”. The Small Business Bank, Bank South Pacific (BSP), to implement a wide ranging of the Year award went to Suva entrepreneur, Hupfeld Hoerder. training program covering employees in Port Moresby, Lae and Hupfeld was also the winner of the Handicraft Section and won other centres along the country’s north coast, in the Highlands the Young Entrepreneur of the Year Award. and on outer islands. The training followed the successful implementation of a four stage project to upgrade BSP’s Credit During the year, PEP-Pacific also completed a “Credit Scoring System. The aim of the project was to enhance the Enhancement” project for the National Development Bank of handling of credit application processes, through improved Palau which was designed to update the Bank’s credit procedures consistency and greater accuracy, without significantly increasing and to produce a customised Credit Policy and an improved the resources required. Procedures Manual. Once completed, PEP-Pacific implemented an intensive staff