Countries and Regions

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Country Strategy and Program Update 2003-2005: Kiribati

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I. Country Strategy

1. In September 2000, the Asian Development Bank (ADB) Board approved ADB’s current strategy for its Pacific developing member countries (PDMCs).¹ The ADB strategy for Kiribati supports the principal objective of the Government’s development policies to promote improvement in the standard of living of the people of Kiribati. This objective was confirmed by the National Development Strategy (NDS), 2000-2003.² The next NDS is expected in 2003. The timing of this country strategy and program update (CSPU) for Kiribati is being coordinated with the NDS schedule to ensure that the CSPU is consistent with the Government’s development strategy.

2. The NDS recognizes the following unique advantages of Kiribati: (i) large and wellmanaged foreign reserves in the Revenue Equalization Reserve Fund (RERF), (ii) a history of sound fiscal management, and (iii) a strong traditional culture that promotes social stability and family welfare. However, the current NDS also identifies several development constraints: (i) limited natural resources, especially land and fresh water; (ii) a small domestic market with little potential for economies of scale; (iii) widely scattered and sparsely populated islands; (iv) difficult and expensive access to major international markets; (v) increasingly competitive international environment for tourism and investment; (vi) a population that has limited understanding of and experience with business concepts and practices; (vii) a labor force lacking in education and job skills; and (viii) social and cultural constraints to the development of land and capital markets.³

3. The NDS, for the first time, acknowledges that poverty and its impact on society is becoming an increasingly important policy issue. ADB’s regional technical assistance (TA) on poverty consultation workshops⁴ is assisting the Government in identifying the extent of poverty in Kiribati and the country-specific poverty line. The initial findings confirm the increasing pervasiveness of poverty in the country. They further confirm the appropriateness of ADB’s strategy to assist Kiribati in overcoming its key development challenges based on strengthening the three pillars of growth set out in ADB’s Poverty Reduction Strategy:⁵

1. promoting good governance by (a) enhancing efficiency and effectiveness in the public sector, and (b) strengthening the Government’s strategic planning capacity for sustainable poverty reduction;
2. enhancing social development by (a) ensuring access to safe water and proper sanitation in South Tarawa, and (b) improving living conditions and access to basic social services on the outer islands; and
3. creating the conditions for pro-poor economic growth by (a) promoting a greater domestic use of RERF resources for priority sectors, and (b) creating an enabling environment for private sector development.

ADB's assistance strategy for Kiribati is summarized in Appendix 1. This strategy is consistent with the NDS policy objectives and other aid agencies' assistance.

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