pedf’s sme sector skills to benefi t timor-leste · workshop for bankers, donors and selected...
TRANSCRIPT
Pacific Enterprise Development Facility Quarterly Third Quarter 2006
The Pacific EnterpriseDevelopment Facility
Co-fi nanced by
Australia
International Finance Corporation
Japan
New Zealand
Managed by
International Finance Corporation, amember of The World Bank Group.
The Pacifi c Enterprise Development Facility (PEDF) was established in 1990. The primary activity of PEDF isto facilitate and support best practice in the design and delivery of business support services to the private sector in the Pacifi c region with a particular focus on small to medium enterprises. PEDF works with institutions, organisations and associations on capacity building and strengthening in a wide range of areas from business advisory through sector specifi c to financial markets.
PEDF works in Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Timor-Leste and Vanuatu.
PEDF - ‘Helping Build Better Business’
The Pacific EnterpriseDevelopment Facility
For further information contactLevel 18, 14 Martin PlaceCML BuildingSydney NSW 2000
Phone 61 2 9223 7773
Fax 61 2 9223 2533
Email [email protected]
General Manager
Mary Elizabeth Ward
Operational Staff
Robert Simms
John Perrottet
Philip Olsen
Peter Cusack
Rainer Venghaus
Administration Staff
Cathy St Ledger
Arist Caruana
Aphrodite Ioannou
Jane Bleakley
Suzanne Harvey
Nga Trinh
Pacific Enterprise Development Facility
THIRD QUARTER 2006
PEDF’s SME Sector Skills to Benefi t Timor-Leste
The PEDF is to apply the skills learnt in the Pacific over the past 16 years to the massive task of establishing a viable small to medium enterprise sector in the tiny South East Asian country of Timor-Leste which ranks amongst the world’s poorest nations.
Timor-Leste’s violent separation from Indonesia in 1999 destroyed two thirds of the young country’s physical infrastructure and left it without a functioning administration or a sound economic base on which to build a future. Today, more than 40 percent of Timor-Leste’s 925 – thousand people live below a United Nations defi ned poverty line.
Oil revenues are certain to make a major economic difference, but the International Finance Corporation (IFC), which manages the PEDF, believes that the private sector must play a signifi cant role in the nation’s development, particularly given Timor-Leste’s rapid population growth and widespread unemployment.
The PEDF’s Acting General Manager, Rob Simms, describes the country’s existing private sector as micro and largely informal. “We will certainly work to improve the business environment,” said Mr Simms. “It will mean looking at the regulatory environment, some of the standards and the legislation governing businesses in Timor-Leste.”
Throughout much of the developing world, the IFC invests in large private sector projects that are likely to have a catalytic affect on the local
economy. But such opportunities rarely exist in the Pacifi c and, at the moment, they don’t exist in Timor-Leste. “Every country is unique but it is fair to say that Timor-Leste does share some of the characteristics of many Pacifi c Island countries,” says Mr Simms.
As it has in the Pacifi c, the PEDF, operating from its new Dili offi ce, will undertake strategic technical assistance projects designed to accelerate private sector activity in Timor-Leste.
Recognising the MSME (Micro and Small to Medium Enterprise) sector’s acute need for investment funds, the PEDF has already given capacity building in the banking and fi nance sector high priority. The Facility has also targeted coffee, fi shing and tourism for special attention.
While significant foreign investment in Timor-Leste is low, the PEDF believes that its work within specifi c sectors and its broader efforts to improve the business and regulatory environment will encourage a fl ow of funds from abroad. “We are hopeful that this will lead to foreign investment and we will be working closely with our colleagues with the World Bank Group’s Foreign Investment Advisory Service (FIAS) to see how we can further improve the investment climate in Timor-Leste,” said Mr Simms.
“We have cultural links with the countries of the Pacifi c and we look forward to learning from our Pacifi c neighbours which have been independent for many years,” Timor-Leste’s Sydney based Consul General, Abel Guterres, said shortly after his nation gained its independence. “In tourism, business investment, laws, there are many things to learn from their experience.”
The PEDF agrees that Timor-Leste is on a steep learning curve and Mr Simms says that the Facility’s experience in the Pacifi c region is certain to “translate well into the Timor-Leste context”.
We are Open for Business - Timor-Leste & Bougainville Woo Adventure Travellers
It may not be obvious at first glance but recently independent Timor-Leste and the now autonomous PNG island province of Bougainville have a great deal in common. Both have experienced the social and economic devastation wrought by years of political upheaval. And, despite their shared image problems and a serious lack of infrastructure, both are determined to develop tourism as an income generating industry.
The PEDF believes that Timor-Leste and Bougainville have tourism potential. “Both of these locations have good tourism assets and a quality of experiences that can be turned into commercially successful tourism outcomes,” says the Facility’s tourism specialist John Perrottet. “The best place to start is simply to let people know that they are open for business.”
Mr Perrottet isn’t worried about the images etched into the minds of would be world travellers by years of negative news coverage. “While it may be true that their notoriety has come about because of the confl icts, the reality is that there is a lot of goodwill towards Timor-Leste and Bougainville out there in the
marketplace,” he says. “Image problems can be overcome by some clever internet initiatives that reach the marketplace without fi rst going via the media.”
Nor is he concerned about a shortage of tourist facilities. Timor-Leste and Bougainville have guesthouses that can be upgraded without a lot of investment and airports able to process visitors quickly and effi ciently.
The PEDF held a workshop in the Timor-Leste capital of Dili in January to introduce small tourism operators to the concept of electronic marketing. In addition to its negative image abroad, the lack of quality facilities has, understandably, discouraged tourism industry wholesalers. “The electronic marketplace allows local operators to showcase their products without wholesaler support,” Mr Perrottet said. “The PEDF is in the process of establishing such a marketplace and our workshop was about introducing the idea to members of the local industry as well as government and to help us to identify partners able to promote those products.”
Of course, Timor-Leste and Bougainville have already attracted a handful of foreign operators offering “adventure” or “expedition” holidays to intrepid travellers keen to claim that they were fi rst to experience a new and exotic destination.
Indeed, Lonely Planet has recently published a guide to Timor-Leste while Cairns based operator, Coral Princess Cruises, has added Bougainville to its Melanesian itinerary. The company’s Managing Director, Tony Briggs, described the welcome given to his vessel, Oceanic Princess, on her maiden voyage to PNG’s island province as overwhelming. “Thousands of people lined the wharf,” he said. “It was without a doubt the highlight of the cruise for our 60 passengers.”
Coral Princess Cruises is the type of operator that shrugs off concerns about tourist infrastructure. “The type of experience we are trying to provide is remote as well as geographically and culturally unique,” said Briggs. “My advice to the Bougainville government is – keep it natural.”
The island’s Minister for Tourism, Pais Taehu, had a very simple message for the Australian visitors who poured off the Oceanic Princess. “You tourists are one of my very important resources,” he said. “When you go back to your homes, tell everyone about our place and how good it is.”
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World Bank President Visits Timor-Leste
The President of the World
Bank, Paul Wolfowitz, has
assured the government and
people of Timor-Leste of the
international body’s ongoing
development support.
During a two day visit to the new nation, Mr Wolfowitz met with President Xanana Gusmao, Prime Minister Mari Alkatiri and Foreign Minister Jose Ramos Horta as well as school children, market traders, journalists and representatives of women’s, church and civil society groups.
Since the country’s separation from Indonesia in 1999, the World Bank, in partnership with donors, has helped the Government of Timor-Leste implement its National Development Plan and last year approved a Country Assistance Strategy aimed at creating the conditions for economic growth and poverty reduction.
Mr Venghaus will take up his post in Dili at the end of May. “To run proper operations one has to be on the ground,” he says. “Its now time to scale up the IFC’s engagement with Timor-Leste and contribute to private sector development in order to contribute to national stability.”
The task ahead of the PEDF’s Dili based team of three led by Mr Venghaus will not be an easy one.
A staggering 33 percent of the nation’s people currently live outside of the cash economy while 80 percent of those with jobs work on small family run farms most of which turning over less than 5-thousand U.S. dollars a year. With every year that passes a further 16 – thousand people enter the workforce. Few of them currently have any chance of fi nding private sector employment.
Given the current nature of Timor-Leste’s private sector, Mr Venghaus says the PEDF will be focusing on the agribusiness and tourism sectors as well as access to fi nance and the creation of a business enabling environment.
“We will also work to further strengthen the private-public sector dialogue,” Mr Venghaus said. “Personally, I will be spending a lot of time building essential relationships with the private sector, the government, donors and civil society groups,” he concluded.
Private-Public Sector Dialogue High Priority for New Country Coordinator
The PEDF’s recently appointed Country Coordinator for Timor-Leste is Rainer Venghaus, a specialist in development assistance with 12 years of experience in nations as diverse as India, Bolivia and the Philippines.
PROJECT NEWS
“Easy access to reliable and well managed financeis critical to the success of individual SMEs and the development of the sector in general. During the quarter, PEDF completed a project focusing on the financial services sector in Timor-Leste. It also completed projects aimed at assisting the development of the tourism sector in Timor-Leste, insurance in the Pacific and the region’s horticultural industry.”
In February, PEDF joined with the World Bank and the United States international development agency, USAID, to organise a workshop for bankers, donors and selected enterprise managers focusing on access to sustainable fi nance in Timor-Leste. A lack of sustainable fi nance is commonly cited by the country’s private sector and its government as a major constraint to private sector growth and development. Specifi cally, the workshop looked at SME Banking in Timor-Leste, constraints on the growth of commercial fi nance and fraud and mismanagement threats to SMEs. Information gathered during the workshop will be used in the development and implementation of PEDF’s Timor-Leste program.
PEDF also conducted a tourism sector workshop in Timor-Leste as part of its evaluation of the viability of an e-booking system for the country’s tourism operators using the worldhotel-link.com (WHL) portal. WHL is a network of country specifi c websites maintained by local operators under a franchise agreement with an organisation established by the IFC. While the sites use IFC developed technology and are consistent worldwide, the hotel information carried on each is gathered
locally by the franchisee who takes a commission on bookings and is free to sell local advertising. The Dili workshop helped to raise awareness of e-commerce and identify potential WHL partner organisations.
Following the successful completion late last year of a four stage project aimed at upgrading Bank South Pacifi c’s (BSP) Credit Scoring System, PEDF continued to conduct staff training courses throughout Papua New Guinea. “There is no doubt that the overall quality of loan applications submitted for approval has improved,” said Consultant Trainer Tony Wynd. Trained BSPstaff members are now enthusiastically marketing their products and services at the “grassroots” level.
In January, PEDF completed a major review of the SME insurance environment in Fiji, Papua New Guinea, Samoa, Solomon Islands and Vanuatu. The review found that many SME operators are missing out on lucrative contracts and placing their businesses at signifi cant risk because they don’t fully understand the need for adequate cover. It also found that access to insurance cover is limited in some areas at least in part because providers are discouraged by the size of the market and the region’s vulnerability to natural disasters as well as social and political instability. PEDF is currently developing a strategy to improve SME understanding of access to insurance which will involve insurance companies, lending institutions and SMEs throughout the region.
In the horticultural sector, PEDF completed the fi fth and fi nal stage of a project for the Fiji based Nature’s Way Cooperative Ltd aimed at improving the export marketability of tropical tree crops from Fiji to New Zealand. The fi nal stage fi nalised the production of an easy to read manual covering the harvesting, storage, and transport of breadfruit. Five hundred manuals and a thousand posters were distributed to breadfruit growers, harvesters and packaging groups throughout Fiji.
World Bank President Visits Timor-Leste
The President of the World
Bank, Paul Wolfowitz, has
assured the government and
people of Timor-Leste of the
international body’s ongoing
development support.
During a two day visit to the new nation, Mr Wolfowitz met with President Xanana Gusmao, Prime Minister Mari Alkatiri and Foreign Minister Jose Ramos Horta as well as school children, market traders, journalists and representatives of women’s, church and civil society groups.
Since the country’s separation from Indonesia in 1999, the World Bank, in partnership with donors, has helped the Government of Timor-Leste implement its National Development Plan and last year approved a Country Assistance Strategy aimed at creating the conditions for economic growth and poverty reduction.
Mr Venghaus will take up his post in Dili at the end of May. “To run proper operations one has to be on the ground,” he says. “Its now time to scale up the IFC’s engagement with Timor-Leste and contribute to private sector development in order to contribute to national stability.”
The task ahead of the PEDF’s Dili based team of three led by Mr Venghaus will not be an easy one.
A staggering 33 percent of the nation’s people currently live outside of the cash economy while 80 percent of those with jobs work on small family run farms most of which turning over less than 5-thousand U.S. dollars a year. With every year that passes a further 16 – thousand people enter the workforce. Few of them currently have any chance of fi nding private sector employment.
Given the current nature of Timor-Leste’s private sector, Mr Venghaus says the PEDF will be focusing on the agribusiness and tourism sectors as well as access to fi nance and the creation of a business enabling environment.
“We will also work to further strengthen the private-public sector dialogue,” Mr Venghaus said. “Personally, I will be spending a lot of time building essential relationships with the private sector, the government, donors and civil society groups,” he concluded.
Private-Public Sector Dialogue High Priority for New Country Coordinator
The PEDF’s recently appointed Country Coordinator for Timor-Leste is Rainer Venghaus, a specialist in development assistance with 12 years of experience in nations as diverse as India, Bolivia and the Philippines.
PROJECT NEWS
“Easy access to reliable and well managed financeis critical to the success of individual SMEs and the development of the sector in general. During the quarter, PEDF completed a project focusing on the financial services sector in Timor-Leste. It also completed projects aimed at assisting the development of the tourism sector in Timor-Leste, insurance in the Pacific and the region’s horticultural industry.”
In February, PEDF joined with the World Bank and the United States international development agency, USAID, to organise a workshop for bankers, donors and selected enterprise managers focusing on access to sustainable fi nance in Timor-Leste. A lack of sustainable fi nance is commonly cited by the country’s private sector and its government as a major constraint to private sector growth and development. Specifi cally, the workshop looked at SME Banking in Timor-Leste, constraints on the growth of commercial fi nance and fraud and mismanagement threats to SMEs. Information gathered during the workshop will be used in the development and implementation of PEDF’s Timor-Leste program.
PEDF also conducted a tourism sector workshop in Timor-Leste as part of its evaluation of the viability of an e-booking system for the country’s tourism operators using the worldhotel-link.com (WHL) portal. WHL is a network of country specifi c websites maintained by local operators under a franchise agreement with an organisation established by the IFC. While the sites use IFC developed technology and are consistent worldwide, the hotel information carried on each is gathered
locally by the franchisee who takes a commission on bookings and is free to sell local advertising. The Dili workshop helped to raise awareness of e-commerce and identify potential WHL partner organisations.
Following the successful completion late last year of a four stage project aimed at upgrading Bank South Pacifi c’s (BSP) Credit Scoring System, PEDF continued to conduct staff training courses throughout Papua New Guinea. “There is no doubt that the overall quality of loan applications submitted for approval has improved,” said Consultant Trainer Tony Wynd. Trained BSPstaff members are now enthusiastically marketing their products and services at the “grassroots” level.
In January, PEDF completed a major review of the SME insurance environment in Fiji, Papua New Guinea, Samoa, Solomon Islands and Vanuatu. The review found that many SME operators are missing out on lucrative contracts and placing their businesses at signifi cant risk because they don’t fully understand the need for adequate cover. It also found that access to insurance cover is limited in some areas at least in part because providers are discouraged by the size of the market and the region’s vulnerability to natural disasters as well as social and political instability. PEDF is currently developing a strategy to improve SME understanding of access to insurance which will involve insurance companies, lending institutions and SMEs throughout the region.
In the horticultural sector, PEDF completed the fi fth and fi nal stage of a project for the Fiji based Nature’s Way Cooperative Ltd aimed at improving the export marketability of tropical tree crops from Fiji to New Zealand. The fi nal stage fi nalised the production of an easy to read manual covering the harvesting, storage, and transport of breadfruit. Five hundred manuals and a thousand posters were distributed to breadfruit growers, harvesters and packaging groups throughout Fiji.
Pacific Enterprise Development Facility Quarterly Third Quarter 2006
The Pacific EnterpriseDevelopment Facility
Co-fi nanced by
Australia
International Finance Corporation
Japan
New Zealand
Managed by
International Finance Corporation, amember of The World Bank Group.
The Pacifi c Enterprise Development Facility (PEDF) was established in 1990. The primary activity of PEDF isto facilitate and support best practice in the design and delivery of business support services to the private sector in the Pacifi c region with a particular focus on small to medium enterprises. PEDF works with institutions, organisations and associations on capacity building and strengthening in a wide range of areas from business advisory through sector specifi c to financial markets.
PEDF works in Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Timor-Leste and Vanuatu.
PEDF - ‘Helping Build Better Business’
The Pacific EnterpriseDevelopment Facility
For further information contactLevel 18, 14 Martin PlaceCML BuildingSydney NSW 2000
Phone 61 2 9223 7773
Fax 61 2 9223 2533
Email [email protected]
General Manager
Mary Elizabeth Ward
Operational Staff
Robert Simms
John Perrottet
Philip Olsen
Peter Cusack
Rainer Venghaus
Administration Staff
Cathy St Ledger
Arist Caruana
Aphrodite Ioannou
Jane Bleakley
Suzanne Harvey
Nga Trinh
Pacific Enterprise Development Facility
THIRD QUARTER 2006
PEDF’s SME Sector Skills to Benefi t Timor-Leste
The PEDF is to apply the skills learnt in the Pacific over the past 16 years to the massive task of establishing a viable small to medium enterprise sector in the tiny South East Asian country of Timor-Leste which ranks amongst the world’s poorest nations.
Timor-Leste’s violent separation from Indonesia in 1999 destroyed two thirds of the young country’s physical infrastructure and left it without a functioning administration or a sound economic base on which to build a future. Today, more than 40 percent of Timor-Leste’s 925 – thousand people live below a United Nations defi ned poverty line.
Oil revenues are certain to make a major economic difference, but the International Finance Corporation (IFC), which manages the PEDF, believes that the private sector must play a signifi cant role in the nation’s development, particularly given Timor-Leste’s rapid population growth and widespread unemployment.
The PEDF’s Acting General Manager, Rob Simms, describes the country’s existing private sector as micro and largely informal. “We will certainly work to improve the business environment,” said Mr Simms. “It will mean looking at the regulatory environment, some of the standards and the legislation governing businesses in Timor-Leste.”
Throughout much of the developing world, the IFC invests in large private sector projects that are likely to have a catalytic affect on the local
economy. But such opportunities rarely exist in the Pacifi c and, at the moment, they don’t exist in Timor-Leste. “Every country is unique but it is fair to say that Timor-Leste does share some of the characteristics of many Pacifi c Island countries,” says Mr Simms.
As it has in the Pacifi c, the PEDF, operating from its new Dili offi ce, will undertake strategic technical assistance projects designed to accelerate private sector activity in Timor-Leste.
Recognising the MSME (Micro and Small to Medium Enterprise) sector’s acute need for investment funds, the PEDF has already given capacity building in the banking and fi nance sector high priority. The Facility has also targeted coffee, fi shing and tourism for special attention.
While significant foreign investment in Timor-Leste is low, the PEDF believes that its work within specifi c sectors and its broader efforts to improve the business and regulatory environment will encourage a fl ow of funds from abroad. “We are hopeful that this will lead to foreign investment and we will be working closely with our colleagues with the World Bank Group’s Foreign Investment Advisory Service (FIAS) to see how we can further improve the investment climate in Timor-Leste,” said Mr Simms.
“We have cultural links with the countries of the Pacifi c and we look forward to learning from our Pacifi c neighbours which have been independent for many years,” Timor-Leste’s Sydney based Consul General, Abel Guterres, said shortly after his nation gained its independence. “In tourism, business investment, laws, there are many things to learn from their experience.”
The PEDF agrees that Timor-Leste is on a steep learning curve and Mr Simms says that the Facility’s experience in the Pacifi c region is certain to “translate well into the Timor-Leste context”.
We are Open for Business - Timor-Leste & Bougainville Woo Adventure Travellers
It may not be obvious at first glance but recently independent Timor-Leste and the now autonomous PNG island province of Bougainville have a great deal in common. Both have experienced the social and economic devastation wrought by years of political upheaval. And, despite their shared image problems and a serious lack of infrastructure, both are determined to develop tourism as an income generating industry.
The PEDF believes that Timor-Leste and Bougainville have tourism potential. “Both of these locations have good tourism assets and a quality of experiences that can be turned into commercially successful tourism outcomes,” says the Facility’s tourism specialist John Perrottet. “The best place to start is simply to let people know that they are open for business.”
Mr Perrottet isn’t worried about the images etched into the minds of would be world travellers by years of negative news coverage. “While it may be true that their notoriety has come about because of the confl icts, the reality is that there is a lot of goodwill towards Timor-Leste and Bougainville out there in the
marketplace,” he says. “Image problems can be overcome by some clever internet initiatives that reach the marketplace without fi rst going via the media.”
Nor is he concerned about a shortage of tourist facilities. Timor-Leste and Bougainville have guesthouses that can be upgraded without a lot of investment and airports able to process visitors quickly and effi ciently.
The PEDF held a workshop in the Timor-Leste capital of Dili in January to introduce small tourism operators to the concept of electronic marketing. In addition to its negative image abroad, the lack of quality facilities has, understandably, discouraged tourism industry wholesalers. “The electronic marketplace allows local operators to showcase their products without wholesaler support,” Mr Perrottet said. “The PEDF is in the process of establishing such a marketplace and our workshop was about introducing the idea to members of the local industry as well as government and to help us to identify partners able to promote those products.”
Of course, Timor-Leste and Bougainville have already attracted a handful of foreign operators offering “adventure” or “expedition” holidays to intrepid travellers keen to claim that they were fi rst to experience a new and exotic destination.
Indeed, Lonely Planet has recently published a guide to Timor-Leste while Cairns based operator, Coral Princess Cruises, has added Bougainville to its Melanesian itinerary. The company’s Managing Director, Tony Briggs, described the welcome given to his vessel, Oceanic Princess, on her maiden voyage to PNG’s island province as overwhelming. “Thousands of people lined the wharf,” he said. “It was without a doubt the highlight of the cruise for our 60 passengers.”
Coral Princess Cruises is the type of operator that shrugs off concerns about tourist infrastructure. “The type of experience we are trying to provide is remote as well as geographically and culturally unique,” said Briggs. “My advice to the Bougainville government is – keep it natural.”
The island’s Minister for Tourism, Pais Taehu, had a very simple message for the Australian visitors who poured off the Oceanic Princess. “You tourists are one of my very important resources,” he said. “When you go back to your homes, tell everyone about our place and how good it is.”