Regions and Countries

	Table of Contents
p. 7 of 20 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 - Vanuatu

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II. Country Operational Strategy

A. The COS

24. The strategic thrust of ADB's operations over the medium term will be to (i) maintain its support for the CRP, while (ii) shifting toward the development of the productive sectors, particularly agriculture and fisheries, and (iii) continuing to support the provision of infrastructure and social services. There is a strong crosscutting concern for addressing poverty, employment, and other social issues, particularly in the rural areas.

25. Within the above-described strategy it is ADB's intention to support the following subsidiary objectives:

• responsible and transparent government;
• Government capacity to deliver essential services efficiently and effectively;
• provision of policy frameworks for developing key sectors including agriculture and fisheries;
• a more open and competitive economy, which would thereby encourage private investment, increase employment, and improve standards of living;
• provision of basic infrastructure to outer islands and framework for sustainable operations and maintenance to protect the value of the infrastructure provided;
• enhancement of the access to financial services for the grass-root people for creating or supporting small businesses; and
• development of the vocational skills of both urban and rural people, particularly women and youth, for broadening their employment opportunities.

B. Progress in Implementation

26. Since February 1997, ADB has actively supported formulation of the Government's comprehensive reform program through close liaison and technical support to ensure careful sequencing and a phased approach to the reform process, while recognizing the need to sustain the momentum of reforms. ADB has also taken the lead role in coordinating other external support. The CRP represents an ambitious reform agenda. It aims to strengthen institutions through improved governance and public sector reform, including restructuring of the civil service; and to carry out structural adjustments in the economy aimed at promoting private sector-led, sustainable economic growth. Ensuring effective implementation of the CRP will require sustained effort, but promises high returns. Therefore, the strategic thrust of ADB's operations in Vanuatu has remained active support for implementation of the CRP.

27. The emphasis has been put on supporting national efforts to strengthen key institutions to ensure political stability, and to improve economic growth performance through policy and institutional reforms. Although the Government has made substantial progress already, the reform process is still very fragile. In implementing the CRP, the Government is confronting a range of policy, infrastructure, service delivery, and issues related to opening up the economy and enhancing private sector investment. Recognizing the need to jump-start the economy, particularly through increased economic activity in the primary sectors, ADB has emphasized sector policy development. ADB also has helped to address critical infrastructure bottlenecks, through assistance for urban and outer islands infrastructure development. In selecting individual interventions, the ADB program has taken the priority in activities that will achieve demonstrable, positive and sustainable impacts of reform at the grass-roots level, such as through improved basic service delivery and systems. To ensure sustainability of the reform process, technical assistance support has focused on deepening the impact of various reforms, by encouraging the continued involvement of all stakeholders in consultation and decision-making.

C. Poverty Partnership Agreement

28. According to official statistics, Vanuatu is ranked the third poorest country among the twelve ADB member countries in Pacific and it has a low Human Development Index. The vast majority of Vanuatu people are in the subsistence or informal sector. There is a lack of employment opportunities, the population growth rate is high, and there is a lack of opportunities and services for women and children. ADB's focus on rural and agricultural development, skills development and women in development will help address poverty issues. Vanuatu is proposed to be one of the four countries to benefit from the Pacific Islands regional technical assistance (RETA) on poverty alleviation. Under the RETA, support is being provided for a poverty assessment of Vanuatu in 2000. A poverty partnership agreement between ADB and the Government would be considered following the TA study.

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