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Opening remarks by SG Tuiloma Neroni Slade at PIPSO workshop

Speech by the Secretary General, Tuiloma Neroni Slade, at the Occasion of the Opening of the Pacific Islands Private Sector Organization (PIPSO) – EU PACREIP Regional Workshop
Nadi, 23 June 2010


Mr Hafiz Khan, Acting Chairman, PIPSO Board of Directors
Members of the Board and CEO of PIPSO
Representatives of Development Partners
Heads and Representatives of National Private Sector Organizations
Government Representatives
Ladies and Gentlemen

The Forum Secretariat attaches a great deal of importance to this gathering, and I want, first, to thank the Board and Management of Pacific Islands Private Sector Organization (PIPSO) for allowing me, and Deputy Secretary General Forau, to join you in this regional workshop. I am honoured, in particular, that you have invited me to provide a few remarks at this opening session.


In doing so, I commence with the observation that PIPSO is an initiative of the Forum and that the Forum’s commitment and support remain undiminished. With that support since its establishment in 2005, PIPSO has continued to make headway in consolidating its position as an achieving and credible regional body. From modest beginnings, PIPSO is steadily gaining in experience, confidence and maturity. This is stuff for commendation, and on behalf of the Secretariat I want to recognize the skilled performance and perseverance of the Board and Management, as well as PIPSO members in forging ahead under often difficult circumstances to position PIPSO as the acknowledged private sector regional organization that it is today.


But of course, there is more that needs to be done to set PIPSO on a path of progress and to further develop its potential, with support of all partners including in particular those which are participating in this regional workshop; the EU through PACREIP, AusAid through the Pacific Leadership Programme (PLP), the UNDP and others.

We at the Forum Secretariat remain firmly committed in supporting the organization, providing where we can specific assistance to ensure PIPSO’s operations and growth. As it is our partnership with PIPSO has already evolved from institutional support to service cooperation. In recognition of PIPSO’s growing ability to support private sector growth in the region, the Secretariat has transferred a number of facilities for its management. This includes the Market Support Fund and the Industrial Development and Training Project. A number of activities funded under the PACREIP which previously were extended directly by the Secretariat have now also been transferred to PIPSO. This particular regional workshop is an example. These transfers have been carefully discussed and considered to ensure PIPSO is not unduly burdened. To avoid this, other partners, in particular AusAid through the PLP have stepped in to boost PIPSO’s capacity to manage these services. I believe discussions are ongoing on potential assistance from NZAID and from other partners as well, efforts which we applaud.

As the lead body for private sector organizations in the region, PIPSO must have the support of the national private sector organizations, those which are already members as well as those still considering joining PIPSO. This will ensure PIPSO can act more effectively for its members and with a clear mandate. Having a clear and strong mandate is necessary to ensure PIPSO is influential in shaping and contributing to discourses on private sector development nationally and throughout the region.

PIPSO also has a role in creating opportunities for growth and prosperity. Sharing of information among its members regarding business opportunities as well as on best business practice, and on new technologies to achieve efficiency, can add value to aspirations of national private sector organizations so that they themselves can be more competitive and productive. Typically for small vulnerable economies, the need to develop a more resilient private sector capable of responding to external shocks of the likes imposed by the global economic crisis as well as the challenges of market competition means that increasingly the private sector would have to be outward looking, cost effective and profitable.

This role is embraced by the theme of this regional workshop which is to “Strengthen Pacific Islands Private Sector to Meet Global Recovery Opportunities”. In the discussions that will follow in the next two or three days, ideas will be shared which can help clarify how best the region can support its private sector to exploit global opportunities. There would be a number of ways to do this.

Firstly, smart business management and decision-making by the private sector itself would be essential. Secondly, given the influence of Governments on private sector performance, most of the actions that are needed to be implemented would have to be led or facilitated by Governments. Thirdly, regional cooperative actions aiming to aggregate or develop markets for export and business opportunities, and to address issues of scale due to smallness and isolation, would be essential, indeed, are inevitable.

In challenging times, private businesses have to be efficient and smart. New ways of doing business must be identified and applied. It is well acknowledged that compared to Governments, the private sector is possessed of honed skills, of agility and imagination, and more often, the required nerve. Research and development are important in this regard , as is exploitation of new market opportunities.

Where Governments are concerned, they are of course delivering on their roles as facilitators and partners of private sector development. Governments have the ability to create and maintain a stable and enabling business environment in which private investments and enterprise can flourish; and Governments should do so. Governments are also partners of the private sector in the delivery of a range of public services through Public –Private Partnerships (PPP) and out-sourcing initiatives; and Governments should do so. This partnership can extend to business development through joint-ventures and build-operate-transfer (BOT) initiatives especially for large public infrastructure projects that require commercial management.

 

Another area requiring Government attention is cost of doing business. In the Pacific, cost of doing business are generally high according to the World Bank. With so many challenges facing private sector businesses, high cost of doing business presents further reminder that the private sector is constantly under pressure to remain competitive. This is an area that needs our collective effort. I would note that our Governments are working with development partners to address this concern. Some countries are already achieving good results. However, much more needs to be done to ensure the cost of doing business in the Pacific are substantially reduced in order to grow the private sector. Some advocacy by the national private sector organizations and PIPSO in particular might be useful in pointing Governments to those areas where the greatest impact could be made in reducing cost of doing business.

In general, despite drawbacks, Forum Island Governments are involving the private sector more and more in the formulation of broad economic policy, reform programs and sector policies. This partnership needs to continue to ensure the policy and regulatory environment is responsive to the needs of the private sector.

Where initiatives for regional cooperation are concerned, consultations with the private sector either through the PIPSO or some other mechanism has to be developed and nurtured. It was the recognition by the Forum Economic Minister in 2002, which led to the pursuit of a process which gave birth to PIPSO. Important regional trade developments are happening now in the region with potential to improve market access for exports. The PACER-Plus discussions, PICTA trade in services and the negotiations of Economic Partnership Agreements are examples which require meaningful consultations with the private sector to ensure the needs of the private sector are sufficiently addressed. Under the Cairns Compact on Strengthening Development Coordination in the Pacific mandated by Forum Leaders last year, there is an expressed interest by Forum Leaders to consult and dialogue with the private sector, and a process is currently being considered to facilitate this.

With the global economic crisis exposing the inherent weaknesses and vulnerabilities of the Pacific Island Countries and the region, the Forum Economic Ministers Meeting in 2009 reinforced the need for building resilience by, among others, strengthening macroeconomic stability and diversifying exports. These strategies require substantial private sector engagement and input. On protecting macroeconomic stability, the private sector assumes a critical role in protecting jobs, growth prospects, and external balances. But in current difficult economic circumstances, the private sector cannot do all these alone. There can be little question that the private sector would need support and the application of appropriate fiscal policies to allow the private sector to circumvent the impacts of the global economic crisis.

A similar situation applies to export diversification. This strategy relies prominently on the ability of the private sector to expand their export production. Regional trade arrangements can offer market access but the ability to produce more exports rests on the confidence by the private sector to invest in additional plant and infrastructure. However, under current difficult economic circumstances, the provision of carefully targeted incentives might be necessary to boost export production. Again appropriate fiscal and monetary policies need to be considered to support what the private sector can do. This is also an area where development partners can play an effective role in, to help repair and modernize production and marketing infrastructure so that the private sector as the engine of growth can benefit from reliable infrastructure in pursuit of expanding export production.

This regional workshop will explore these ideas, and I’m sure others as well to better inform and engage, and to help strengthen the private sector to face the challenges and opportunities. I should think that with diverse representation from the private sector, Governments and development partners, the workshop is set to be a lively occasion for sharing new thinking and points of view, and I wish to extend to you all my very best wishes for the success of your deliberations.

Thank you.


 

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