Countries and Regions

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p. 3 of 5 BACK | NEXT I. Country Strategy II. Current Development Trends and Issues III. Implementation of the Country Strategy and Program IV. Portfolio Management Issues V. Country Performance and Lending Level

Country Strategy and Program Update 2005–2006: Kiribati

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III. Implementation of the Country Strategy and Program

A. Progress in Poverty Reduction

27. The Government and ADB signed a poverty partnership agreement in June 2003. Progress in some of the key target areas and indicators has been made, as follows.

28. Education indicators have improved, as available data suggest that universal primary education has almost been achieved. The target of eliminating gender disparities in education has nearly been attained at the primary level, and has been achieved at the secondary level. The outer islands are, however, still disadvantaged in terms of access to health services, general government services, and communications. These disparities lead to increased migration to South Tarawa, whose population density is leading to additional pressure on water resources and sanitation services. Health indicators need further improvement to meet the Millennium Development Goal (MDG) targets by 2015. Child mortality has decreased slightly, but is still comparatively high. Maternal mortality ratios have been reduced considerably, but are still among the highest of the PDMCs. Less than half of the population has access to safe drinking water and sanitation, with significant differences between urban and outer islands. (Progress toward the Millennium Development Goals and Targets is shown in Appendix 2.)

29. Kiribati faces a complex development task, requiring sustained long-term coordinated effort at all levels of society. ADB’s approach to assist Kiribati in achieving the MDGs is both comprehensive and multidimensional. To ensure safe access to water, ADB will continue to assist in addressing issues of institutional capacity in the water sector and in providing essential infrastructure for the restoration of water and sanitation management services through the proposed PPTA and loan for water resource development.

B. Progress in the Country Strategy and Program Focus Areas

30. For the first strategic area of pro-poor economic growth, the lack of employment and high rates of urban population growth, driven by limited employment opportunities on the outer islands, were the reasons for ADB's priority over the last 2 years on outer island development. The aim was to achieve development through a proposed trust fund mechanism invested offshore to generate a stream of revenue to improve living standards on the outer islands. However, the Government has indicated that it prefers to focus on generating economic growth prospects in regional growth centers serving a cluster of islands, as called for in the NDS. ADB and UNDP will assist with a PPTA in this area. In the event that this study, scheduled for late 2004, will confirm the need for priority investments in the Gilbert Islands and in the Northern Line Islands, ADB will follow up with a proposed multisector loan for US$8 million in 2006. This intervention will also seek Global Environment Facility funding for integrated ecosystem management for Kiritimati island. A supporting tourism training TA in 2005 for US$400,000 in the Phoenix and Line Island groups will further assist in facilitating job opportunities, including on cruise ships. Further ADTA for US$400,000 on creating a conducive investment environment and a regulatory framework for private sector growth is scheduled for 2006.

31. The second strategic area of inclusive social development⁸ focuses on improving the quality of life both on South Tarawa and on the outer islands. Through a regional TA,⁹ the Government will be able to benefit from information and communications technology for remote rural communities via the Internet (including for education, governance, health, and disaster mitigation control). To achieve equal development opportunities throughout Kiribati, an ADTA on local governance strengthening is included for 2006.

32. Progress in achieving the MDGs requires sustained public investment in the education, health, and water and sanitation sectors. The ongoing SAPHE Project and the associated water, health, and environmental-related TA will significantly contribute to improvements in the quality of life for people by providing safe drinking water, improving public health, and safeguarding the environment. However, the increasing pressure on the water and sanitation services on South Tarawa has stretched the capacity of the system to the limit. Currently, the average per capita supply of potable water is less than 30 liters per day. This is well below the supply of 100 liters per day that is generally considered adequate. To continue ADB’s support on water, public health, and environmental management, a proposed US$400,000 PPTA for Water Resource Development in 2005, and a proposed US$6 million loan for Water Resource Development, coupled with an associated TA for US$400,000 in 2007, are planned. These projects seek to improve public health through improved water supplies and sanitation in the key growth centers in the Gilbert Islands.

33. In relation to the third strategic area of improved governance, the technical assistance (TA) for Strengthening Institutional Capacity for Financial and Economic Management¹⁰ has significantly strengthened the economic planning, policy analysis, and financial management capacity of both MFEP and the Government as a whole. It also helped the Government improve its resource allocation processes and procedures, particularly in developing new procurement procedures for government purchases. AusAID is assisting MFEP in improving finance and budget management through a strengthened financial management information system. In 2002, ADB commenced two TAs, one to produce the 2002 economic and social report and identify poverty reduction strategies, and the other to conduct poverty consultation workshops. These TAs supported preparation for the planned Development Partners Meeting of aid agencies in August 2004 and the implementation of the Government’s undertakings under the poverty partnership.¹¹

C. Highlights in Coordination of External Funding and Partnership Arrangements

34. Kiribati receives generous external aid to finance its development spending. In 2004 Kiribati will receive about A$128 million in assistance from the international community. Major sources of funds are the governments of Japan, Australia, United States, and New Zealand. The main multilateral funding agencies are ADB, the European Union (seaweed, solar energy, and health clinics on outer islands), and UNDP (improved access to basic services, capacity building, governance and improved communication to outer islands).

35. ADB maintains close communication with key development partners, including AusAID, UNDP, and World Bank. The Government, ADB, and World Bank, with a view to moving toward harmonizing, are streamlining the implementation process. There has been increased coordination with the World Bank on their Climate Adaptation Project and ADB’s TA on poverty reduction strategies and assisting the Government in developing frameworks and linkage diagrams for the NDS, and ministry operational plans. Future cooperation is foreseen in governance (UNDP), financial management (AusAID), public sector management (NZAID), and water development/adaptation strategies (AusAID, World Bank, and South Pacific Applied Geoscience Commission). The role of other agencies in assisting Kiribati in these key development challenges is in Appendix 2.

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