The FINANCIAL — The Asian Development Bank’s (ADB) new 5-year strategic framework for the 11 smallest Pacific countries focusses on reducing the high costs of business and services; better managing economic, financial, and climate change risks; and creating conditions to enable the private sector to grow.
“The development challenges in the Pacific region demand support across multiple sectors, efficient use of financial resources, capacity building and knowledge transfer, and close coordination with government counterparts and development partners,” said Xianbin Yao, Director General of ADB’s Pacific Department. “Our new Pacific Approach 2016-2020 will prioritize our assistance through a three-pronged plan to tackle these issues.”
The Pacific Approach 2016–2020 will serve as the overall country partnership strategy for the Cook Islands, Kiribati, the Republic of the Marshall Islands, the Federated States of Micronesia, Nauru, Palau, Samoa, the Solomon Islands, Tonga, Tuvalu, and Vanuatu. ADB has individual partnership strategies for the three larger Pacific developing member countries – Fiji, Papua New Guinea, and Timor-Leste.
The small size of most Pacific countries makes it difficult to build economies of scale. Their many islands and isolation from each other translate into very high costs for providing services and doing business. Also, the majority of the Pacific islands are extremely vulnerable to climate change and natural disasters.
Recent changes to ADB’s balance sheet will allow the bank to dramatically increase its assistance to the Pacific region. From 2016-2020 ADB will provide at least $2.5 billion in loans and grants to the 14-country Pacific region, more than double the $1.1 billion it provided in the previous 5 years. ADB will continue to work with development partners and the private sector to bring additional assistance to the region, according to ADB.
Under the Pacific Approach, ADB’s infrastructure program in the 11 Pacific countries will focus on transport, information and communication technology, and renewable energy to get goods to and from markets, create opportunities for electronic delivery of health and other services, and improve access to power supplies. ADB will also help reduce the costs of doing business by modernizing tax systems, boosting access to credit, and reforming state-owned enterprises.
To mitigate the various risks facing the region, ADB under the new strategy will continue to help countries strengthen their public finances. It will scale up climate change adaptation, mitigation and disaster risk management including by helping them access climate finance and help them explore ways to manage their natural resources.
To spur on the private sector, ADB will continue to support legislative and financial reforms. Online business registries in Samoa, the Solomon Islands, and Vanuatu will be expanded and their benefits highlighted. Secured transactions frameworks that extend access to credit using movable property as collateral will be established or further developed. Opportunities to economically empower women will continue to be identified.
Since 2000, ADB has significantly expanded its operations in the Pacific region, establishing a presence in almost all of its Pacific developing member countries. ADB has country offices in: Timor-Leste, Papua New Guinea, Fiji, and Australia. Soon ADB will have Extended Missions in Samoa, Solomon Islands, Tonga, and Vanuatu. ADB also has Development Coordination Offices in: Cook Islands, the Federated States of Micronesia, Kiribati, Palau, and the Marshall Islands. There are plans to open such offices in Nauru and Tuvalu.