The Asian Development Bank (ADB) and Australian government are providing combined grant assistance of US$10.5 million to promote private sector development in the Greater Mekong Subregion (GMS) countries ahead of the inception of the Asean Economic Commun
ADB's Country Director in Laos, Sandra Nicholl said, "The private sector in Cambodia, Laos, Myanmar and Vietnam is still relatively underdeveloped and there is a pressing need to improve the regulatory environment so that businesses can become more competitive."
"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," Ms Nicholl said.
According to the ADB, 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 programme.
ADB's technical assistance grant of US$500,000, with co-financing of US$10 million from the Australian government, 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, Laos, Myanmar and Vietnam. 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, ADB reported.
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 percent of all businesses, and 75 percent of employment in Cambodia, Laos, Myanmar and Vietnam. 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 four countries and a rise in the number of SMEs which export. The Mekong Business Initiative activities will run from December 2014 to November 2017.