Regions and Countries

	Table of Contents
p. 7 of 18 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 - Tonga

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II. Country Operational Strategy

A. The COS

26. The Government’s development strategy aims at sustainable economic growth by promoting private sector development. The strategy also seeks to ensure equitable distribution of development benefits and conservation of the environment. The Government’s priority for public sector investments include health, education, water and sanitation, and maintenance and rehabilitation of transport infrastructure, including for tourism and communication. The agriculture, fisheries and tourism sectors have been identified as those with the greatest potential for contributing to economic growth. This growth is expected to be fuelled by private sector investment, with government providing supporting infrastructure and an improved policy environment. Economic and public sector reforms are essential to the achievement of private sector led economic growth. In December 1999 Privy Council approved in principle the concept of an Economic and Public Sector Reform Program (EPSRP) for Tonga. While a detailed design has yet to be developed, the EPSRP is expected to address policies to strengthen public sector management, improve the delivery of basic public services, promote private sector-led economic growth, enhance social security, and improve financial sector efficiency.

27. ADB’s new Pacific Strategy for the New Millennium continues to support reform in the areas of economic policy, public sector management, governance, and private sector development. In this context, ADB’s strategy is fully compatible with Government’s own development strategy. The proposed EPSRP will constitute the cornerstone of ADB’s program of assistance for Tonga for the next three years.

B. Progress in Implementation

28. There was no new lending and technical assistance provided by ADB from 1996 to 2000, pending the Government’s decision to undertake in depth economic and public sector reforms. A breakthrough has been achieved in the policy dialogue between ADB and the Government when Privy Council approved in December 1999, the concept of an Economic and Public Sector Reform Program (EPSRP) for Tonga. EPSRP is proposed to be the cornerstone of ADB’s program for Tonga for the next three years.

C. Poverty Partnership Agreement

29. A small scale TA is being implemented to assist in the design, implementation, and analysis of data of a household income and expenditure survey. This survey will provide the data required for an assessment of living standards in Tonga, and will also permit improvement of national accounts and rebasing of the consumer price index. The TA will be implemented by the Statistics Department and will provide the basis for dialog with the Government towards a Poverty Partnership Agreement.

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