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Countries and Regions Country Assistance Plans Document
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Country Assistance Plans - Marshall Islands
II. Country Operational StrategyA. The COS23. ADB’s current operational strategy in RMI is to assist the Government achieve a sustainable and self-reliant economy. The strategy aims at assisting in economic and financial reforms and supporting essential services like education, health, and water sector. The assistance program will be directed towards the disadvantaged in the outer islands. 24. On this basis and in the context of recent developments, ADB’s medium term program with RMI will be directed towards:
25. In addition, as part of ADB’s Pacific Islands Economic Report (PIER), a new country economic report for RMI, which will include a development strategy for the Government, will confirm the aforementioned strategic focus and form the basis for final determination of the ADB assistance program to RMI. The timing of the report is planned such that the new Government is fully involved in determining the final strategic direction for RMI. Pending finalization of the new strategy and clear direction from the new Government with regard to reform initiatives, no additional broad-based policy lending will be considered. 26. The PIER will be strategically oriented and combine the traditional macroeconomic and sectoral assessments with a more detailed analysis and definition of “poverty” in the context of the Marshall Islands. Under the PIER, these findings will in turn be translated into both a long term strategic vision for the country’s socio-economic development and an initial medium term strategic plan to be reviewed and endorsed at a national economic summit (NES) involving widespread participation of all stakeholders in RMI. Following NES, the Government’s statement of economic strategy and related strategic plan will be presented to donors at a Consultative Group (CG) meeting. ADB’s future strategy for RMI (including poverty reduction) and related loan and TA program will also be updated on the basis of the aforementioned strategy. B. Progress in Implementation27. Of the two projects/program loans currently under implementation, the physical components/civil works of the water supply loan is more or less complete. However, the project has run into some technical design problems in the distribution component of the project and disagreements between the design consultant and the contractor with regard to contract variations have led to filing of a legal case. Further, the project is likely to fall short of its financial objectives especially in the area of financial self-sufficiency and viability. As a result, several covenants are likely to fall short of full compliance. The difficulty stems from changes in field conditions as well as design assumption. Alternatives to correct the situation have been determined and where possible appropriate measures are being put in place within available loan balances. In the Health and Population project, the loan has been extended to complete scope of project, utilize available funds and to complete procurement of medical equipment for Ebeye hospital. 28. The Education Project was also extended to allow time to complete the middle school and the printing shop as well as the balance of curriculum development work. Under the Ebeye Health and Infrastructure loan, the management and control of the utility is under a private company and the power and water supply has been restored. 29. For the PSRP loan, except for one, all third tranche conditions and more importantly, the carried over second tranche condition for the civil service target have been accomplished. As a result the third tranche can be released. C. Poverty Partnership Agreement30. Assistance is being provided to support a poverty assessment which is expected to lead to the formulation of a poverty reduction strategy by the Government. A poverty partnership agreement will be proposed to the Government once a poverty reduction strategy has been developed.
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