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| Sunday, 16 February 2003 |
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ADB, WB to help improve business environment The Asian Development Bank (ADB) said on Thursday that it, together with the World Bank, would undertake a joint study of the investment climate and productivity in Asia's developing countries including Sri Lanka. The study aims to help improve the business environment and promote poverty reduction through private sector development and long-term economic growth. A three-member team headed by ADB's Lead Economist Ernesto M. Pernia and a World Bank team will visit Sri Lanka this week for discussions with the Government on how best the survey can be conducted. The implementing agency in Sri Lanka will be the Ministry of Enterprise Development, Industrial Policy and Investment Promotion, said a spokesman of the ADB office in Sri Lanka. The survey is expected to commence in March or April, depending on how fast things get into place. The ADB will focus on urban industries while the World Bank will focus on rural industries. "We do not want to duplicate what has already been done. Therefore, we will build up on what is already there," the spokesman said. According to a news release from ADB's Manila headquarters, the bank will first focus on Indonesia, Philippines and Sri Lanka. The World Bank has completed studies in India and six provinces of China and is undertaking work in Bangladesh, Pakistan and Vietnam. The two organisations will jointly undertake the surveys and consequent analyses of data. The ADB said that during the 1990s, the world's fastest developing economies enjoyed higher growth and impressive poverty reduction. However, there was considerable variation in performance. Average growth among the more globalising developing economies during the decade was five per cent per capita compared to the rest of the developing world, which posted negative growth of 1.1 per cent. Among the prominent globalisers were Brazil, China, India, Mexico, Philippines and Thailand. "Openness to foreign trade and investment is important in explaining the differences in growth and progress in poverty reduction," Ernesto M. Pernia, said. "But we also need to take into account a range of institutional factors and policies that fall under the broad heading of 'investment climate'. The study will compare how different developing countries fare in the race towards investment competitiveness and productivity and identify ways to overcome the barriers they face." Some 800 to 1,000 firms, classed according to sector and size, will be surveyed in each country using a common questionnaire. This will be supplemented by questions of relevance to individual countries. According to the spokesman, there might be less than 1,000 firms in Sri Lanka as the island is relatively small compared to the other countries. The study is expected to answer several critical questions, such as: How internationally competitive is the country?; What specific areas need reforms to improve firm competitiveness and productivity?; What are the priorities for reform?; and What effect would improvements have on overall productivity, growth, and poverty reduction? The survey and subsequent analytical work for each country are expected to run for about nine months. The results will be disseminated to the government and private sectors, civil society, academia, and the international development community. "The effectiveness of private sector contribution to development has been hampered by weak public and corporate governance, unclear regulations, and corruption," added Pernia. "Improving the investment climate will reduce the risks and costs of doing business and help stimulate private sector development." |
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