PHNOM PENH, CAMBODIA (4 December 2014) – The Asian Development Bank (ADB) and Government of Australia are providing combined assistance of $10.5 million to promote private sector development in Greater Mekong Subregion (GMS) countries ahead of the inception of the ASEAN Economic Community (AEC) in 2015.

“The private sector in Cambodia, Lao People’s Democratic Republic (Lao PDR), Myanmar and Viet Nam is still relatively underdeveloped and there is a pressing need to improve the regulatory environment so that businesses can become more competitive,” said Eric Sidgwick, ADB’s Country Director in Cambodia. “This issue is increasingly important ahead of the start-up of the AEC which is expected to open up substantial new regional opportunities for companies in the GMS.”

The assistance comes ahead of the 5th GMS Summit on December 19-20 in Bangkok, Thailand, where the agenda will focus on the endorsement of a regional investment framework and an assessment of progress made under the ongoing regional cooperation program.

ADB’s technical assistance grant of $500,000, with cofinancing of $10 million from the Government of Australia, will support the Mekong Business Initiative—a policy advisory and advocacy facility which promotes private sector development in the GMS.

The assistance will focus on preparing reforms to improve the enabling and regulatory environment for private business and create more cross border opportunities for companies in Cambodia, Lao PDR, Myanmar, and Viet Nam. 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.

A strong and fair regulatory environment is essential to further develop small and medium-sized enterprises (SMEs) who make up about 90% of all businesses, and 75% of employment in Cambodia, Lao PDR, Myanmar and Viet Nam, and 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. The initiative will run from December 2014 to November 2017.

Among the targeted impacts will be an increase in the number of new private companies registered in the 4 countries and a rise in the number of SMEs which export.

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 2013, ADB assistance totaled $21.0 billion, including co-financing of $6.6 billion.