Regions and Countries

	Table of Contents
p. 7 of 19 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program IX. Local Cost Financing

Country Assistance Plans - Maldives

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II. Country Operational Strategy

A. The Country Operational Strategy

24. The current Country Operational Strategy (COS) for Maldives was prepared in 1995 when macroeconomic instability, regional disparities, environmental vulnerability and skill shortages were the major concerns. Accordingly, the operational priorities included:

1. improvement of fiscal management;

2. promotion of regional development together with improvement of quality of and access to education; and

3. the protection of environment.

As the macroeconomic position improved, the Government advised ADB and the International Monetary Fund that it would no longer need external assistance to implement a program of macroeconomic reforms and that it would proceed with the reforms using its own resources. The Government, accordingly, requested ADB to redirect assistance to support improvements in public sector management and human development.

B. Progress in Implementation

25. Regional development across atolls has been a high priority for ADB assistance to achieve a more equitable and cost-effective distribution of basic economic and social services and to ease the development pressures on Malé. ADB has approved the Regional Development Project in 1999 aiming at developing a northern development region and a southern development region. The need for ADB support for human development has remained a high priority. A sustained effort is required to raise the education and skills level of the population to meet the demands of a rapidly modernizing economy and to reduce the heavy reliance on expatriate workers. ADB assisted in the preparation of the Education Sector Master Plan¹¹ and is currently assisting to restructure and strengthen the postsecondary education system to improve the quality and quantity of skilled manpower in the country.¹² Success in regional development and the upgrading of human resources will call for strong and sustained commitment and appropriate budget allocations from the Government. Investments in regional development activities will require careful screening to ensure that they are environmentally friendly and cost-effective. With respect to the environment, the Government had been able to mobilize grant assistance from bilateral and multi-lateral sources to address its main concerns. Accordingly, ADB operations do not include stand-alone environment projects, but address environmental issues in ADB funded projects. Given the logistical challenge of monitoring 199 inhabited¹³ and 992 uninhabited islands, over a vast stretch of ocean, this approach is realistic and practical.

26. The preparation work for a new COS/poverty reduction strategy for Maldives commenced in late 1999. The strategic considerations of future ADB assistance to Maldives will take into account the Government’s development priorities and ADB’s strategic development objectives under the overarching objectives of poverty reduction. Subject to further in-country consultation, key areas of support by ADB will include:

1. regional development through the provision of basic social and economic infrastructures to help create economic opportunities for the disadvantaged island population;

2. human development especially through higher education and training to meet the skill demand of a modern economy;

3. environmental management through institutional capacity building in monitoring and enforcing environmental rules and regulations and taking appropriate mitigating measures for environmental protection; and

4. improvement of the efficiency of the public sector and the financial system and promotion of sustainable private sector led growth in the economy.

The sector focus of ADB’s future public sector operations will be placed in the above key areas, providing equal support in institutional capacity building and investment finances for specific subsectors.

C. Poverty Reduction Partnership Agreement

27. Based on the Vulnerability and Poverty Assessment, ADB is preparing a poverty analysis and a country-specific poverty reduction strategy for Maldives. The poverty reduction strategy will form the basis of a Partnership Agreement between the Government and ADB on poverty reduction in Maldives. The Partnership Agreement, expected to be concluded in 2001, will outline specific operational targets and measures to optimize the poverty impact of the ADB operations in the country and the Government’s own commitments to this objective. Close consultation will be conducted with the Government, donors, non-government organizations (NGOs), the private sector, and community groups in formulating the poverty reduction strategy.

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