Countries and Regions

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p. 15 of 19 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies IV. Regional Economic 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 - Solomon Islands

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V. Donor Activities and Aid Coordination

29. The major bilateral aid donors to the Solomon Islands are Australia, Japan, Kuwait, New Zealand, Papua New Guinea, Taipei,China and the United Kingdom. (Appendix 3). The major multilateral aid donors are the ADB, the World Bank, the UN agencies, and the European Union. In addition, smaller regional organizations (such as the Pacific Community, Forum Secretariat, and Forum Fisheries Agency) have also provided assistance to the Solomon Islands.

30. From 1994-98, the annual level of development assistance in the form of both grants and loans was about $46 million. This is expected to increase to about $61 million in 1999. Human resource development (education and health) and infrastructure development have been the focus of external assistance in recent years. Among the major donors, the EU has earmarked about US$6 million annually for projects in the Solomon Islands, including STABEX payments.¹ EU projects focus on rural infrastructure, HRD, education and health sectors. Japan's grants and TAs for the last five years have amounted to about US$16 million a year in areas of infrastructure, fisheries development, rural development and HRD. Australia's program of about US$8-9 million annually includes rural water supply, health and population and HRD activities. New Zealand's annual aid program is at the level of US$3 million, half of which is for scholarship awards and vocational training activities, with the rest covering small rural development projects. Aid from Taipei,China is currently financing the upgrading of the Honiara Central Hospital, a vegetable demonstration farm, and a rural rice plantation project. The World Bank (IDA) has an ongoing project of about US$14 million for the Third Education and Training Project. Loans from OPEC Fund and Kuwait Fund are financing the Honiara Main Road Upgrading Project.

31. Donors are in the process of reviewing their portfolios in order to align their future assistance with the priority needs of the country. This adjustment is important given that most of the donors had stayed away from policy-related issues in the past few years. However, the immediate requirements for technical assistance are largely in the domain of policy analysis and formulation. AusAID is providing TA to strengthen revenue collection at customs, re-establish the operations of the Timber Control Unit, and improve management at the Accountant-General and Auditor-General's Offices. A TA from UNDP is helping the Government to monitor the impacts of the reform program on vulnerable groups. New Zealand aid is strengthening inland revenue operations.

32. The ADB has been in close coordination with the IMF and the World Bank regarding the respective assistance operations of the three institutions. The IMF has been monitoring macroeconomic policy developments on a regular basis. The World Bank has provided a $12 million Structural Adjustment Credit in 1999, co-financed with the EU, in support of a broad range of macroeconomic and sectoral reforms.

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