Support for Pacific entrepreneurs could help youth - World Bank

Transcript

Jonathon Kirkby: They made it easier to start a business, they made some changes that make it easier potentially to get credit, or to get shareholder capital into your business if you're running a small company, and they made some changes that streamline the process for closing down a business. Ultimately, if you go under and you need to free up your business assets and deal with creditors it's important to have a good legal process and they've made some changes to improve that. So Vanuatu did very well this year and they rose from 94 in the global rankings to 83. But some other countries did well as well. Papua New Guinea made changes over the last few years that improved the process of registering a business, and they also started a collateral registry which means that people can borrow against movable assets and they can be registered through a registry that makes it easier for banks and other lenders to lend money to people. So if you borrow against your car for instance, the bank then knows that it has legal security against that car and you can't borrow against that car with other lenders. It makes a big difference for people trying to get credit. So PNG rose quite high on the getting credit indicator on the basis of that change. Fiji improved on business registration, but they also made some regulatory changes that resulted in it becoming a bit more difficult to get credit, so they sank a little bit overall on the ratings. Overall it's encouraging to see Pacific island countries recognise the importance of improving their business regulation and that they are making these types of changes that over time will lead to an improvement in their business environment.

Ben Robinson Drawbridge: Do you think the growing youth population in the Pacific and the pressure this is putting on economies to create extra employment could be a driving factor of these reforms?

Jonathon Kirkby: I'm sure that the countries in the region are very aware of the need to create employment. Many young people are soon to come into the workforce and that will create a lot of pressure in many countries across the Pacific to supply jobs and incomes to people. I think countries are aware that the business environment is strongly linked to economic growth. We have evidence that across the world countries with good business environments that make it easy for people to start and run and finish a business also have good economic growth. So while there is not a direct impact on youth employment from improving your business environment it certainly makes it more easy to take advantage of economic opportunities. If you make it easier for people to start a business then these young, enthusiastic people are more likely to be in that position to join the formal economy and to operate their own businesses.