State-Owned Enterprise Reform Achievable In Pacific

State-Owned Enterprise Reform Achievable In Pacific

Honiara, Solomon Islands, May 24 2011 - A new ADB study on the comparative performance of State-Owned Enterprises (SOEs) in the Pacific has shown that reform is achievable in the Pacific region.

The report, 'Finding Balance: Benchmarking the Performance State-Owned Enterprises in Fiji, Marshall Islands, Samoa, Solomon Islands, and Tonga’ was launched today by Gordon Darcy Lilo, Finance Minister, Solomon Islands Government. The report was launched ahead of a special briefing session on the key findings of the report.

"It’s time to increase the momentum of state-owned enterprise reform in Solomon Islands, and we are doing this with the help of technical assistance from ADB," said Gordon Darcy Lilo at the launch in Honiara. “Our Government is committed to facilitating private sector development, and SOE reform is an essential component of that strategy. SOE reform will put the Solomon Islands economy on a more sustainable growth path.”

SOEs are identified as public enterprises, commercial statutory authorities, government commercial companies, and public trading bodies that are mainly owned by the government. The purpose of the report is to assess the impact of the SOEs on the economies of the participating countries and identify the key performance drivers and reform strategies that can assist future policy development. While the report focused on SOE performance in five Pacific countries, the lessons learned are applicable throughout the Pacific Region.

“The Solomon Islands has already made substantial efforts in the SOE reform area,” said Eugenue Zhukov, Regional Director of ADB’s office in Sydney, Australia. “Highlights include: the recent promulgation of SOE regulations in Solomon Islands to support the 2007 SOE Act, the 2010 privatization of Sasape Marina Ltd and Soltai companies, and the government’s active participation in the ADB study.”

The ADB report says the best performing SOEs are those that operate as commercial enterprises and under competitive market pressures. This approach forces SOEs to focus on their core mandate of operating as successful businesses, meet their costs of capital, and undertake any community service obligations on a commercial basis. Applying these principles can bring significant economic benefits to the Pacific Region, the report says.

SOE reform is one of the key focus areas of ADB’s Private Sector Development Initiative (PSDI) which started in 2006 with cofinancing from the Australian Government. The initiative supports efforts by developing member countries in the Pacific to encourage private sector-led, sustainable economic growth.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members -- 48 from the region. In 2010, ADB approvals, including, cofinancing, totaled $17.51 billion. In addition, ADB’s ongoing Trade Finance Program supported $2.8 billion in trade.

ENDS

© Scoop Media