Regions and Countries

	Table of Contents
p. 38 of 47 BACK | NEXT Developing Asia and the Pacific The global economy Newly industrialized economies Central Asian republics, Azerbaijan and Mongolia People’s Republic of China Southeast Asia South Asia The Pacific Cook Islands Fiji Islands Kiribati Marshall Islands Federated States of Micronesia Nauru Papua New Guinea Samoa Solomon Islands Tonga Tuvalu Vanuatu

Kiribati

Economic performance

Real GDP of Kiribati declined by 4.0 percent in 2000. The Revenue Equalization Reserve Fund reached around Australian (A)$658 million by the end of 2000, and returned investment income was equivalent to around A$23.9 million as interest and dividends, equal to 33.3 percent of GDP. General retail prices increased by only 0.2 percent in the 12 months to October 2000. Exports declined while imports increased, and the current account moved to a deficit of an estimated 5 percent of GDP. However, international reserves are extremely healthy because of the Reserve Fund of about 10 years of import cover.

Domestic policies: The overall budget deficit in 2000 is estimated at 5.3 percent of GDP, slightly lower than the previous year, mainly because of higher-than-estimated fishing license revenue. Current expenditure in 2000 was A$63.8 million and development expenditure was A$20.8 million. Current expenditure in 2000 was virtually unchanged from 1999. External debt in 2000 was A$14.7 million ($8.2 million US equivalent) or a relatively modest 20.4 percent of GDP. External debt service was 1.2 percent of the exports of goods and services in 2000. The broad money supply, as calculated from the Bank of Kiribati balance sheet, grew by 5.0 percent in 2000. Key policy issues identified in the National Development Strategy for 2000–2003 include reforming the public sector, strengthening the banking sector, improving the investment climate, rationalizing the tax and tariff systems, improving data collection and analysis, developing human resources, and promoting outer island development.

ADB operations

Operational strategy: ADB’s operational strategy for Kiribati is to promote sustainable growth, reduce poverty, and improve the living standards of the people. ADB aims to achieve these objectives by enabling the Government to implement effectively its National Development Strategy and to start empowering local governments. ADB operations focus on reducing poverty, reforming the public sector, providing social infrastructure, and developing the outer islands.

Policy dialogue: Policy dialogue with the Government included assisting the public service reform; restructuring the Public Utilities Board; improving sustainability of operations in the utilities subsector, including cost recovery, and operation and maintenance; conserving water; and protecting the environment. A comprehensive program was prepared with ADB assistance for infrastructure improvements in water supply, sewerage, and solid waste management. Institutional reforms, designed to enhance the effectiveness and efficiency in operating and maintaining public utilities, were also identified.

Loans and technical assistance: No loans were approved in 2000. ADB approved two technical assistance grants totaling $500,000: an advisory technical assistance for public sector reform and a project preparatory technical assistance grant for outer islands development.

Project implementation: Since joining ADB in 1974, Kiribati has received six loans, of which one was active at the end of 2000. Contract awards totaled $2.0 million, bringing the cumulative figure to $6.6 million. The contract award ratio was 25.7 percent, higher than the ADB-wide average of 21 percent. Disbursements during the year totaled $1.1 million, bringing cumulative disbursements to $4.8  million. The disbursement ratio was 10.7 percent, lower than the ADB-wide average of 20.5 percent.

One loan—the Sanitation, Public Health, and Environment Improvement Project—was ongoing in 2000. After a slow start-up, including a delay in recruiting consultants, the Project progressed and was classified as partly satisfactory in terms of implementation and achieving its development objectives.

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