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Countries and Regions Country Partnership Strategies Document
IV. Country Performance and Lending LevelsA. Lending Level Proposed28. The Asian Development Fund (ADF) resources for developing member countries are allocated based on the performance-based allocation (PBA) system. The Maldives’ indicative ADF allocation based on the system is $5 million for 2002. The proposed lending program for 2002-2004 totals $22 million (Appendix 4) or an annual average of $7.3 million including overprogramming, compared with an annual average of $6.3 million for approved loans during 1996-2001. The average is subject to change, depending on the outcome of the PBA exercises for 2003 and 2004. 29. The PBA system also assesses country-specific criteria according to triggers for high, base, and low cases, which normally allow a range of up to ±20 percent from the base case allocation. However, for the Maldives, a wider range of allocation will be granted over the program period considering the limited flexibility for small programs. The country-specific criteria were discussed and agreed upon with the Government. They include indicators for national development action plans, public utilities sector reforms, and portfolio performance. The lending scenario and selected performance triggers are in Appendix 4. B. Loan Program30. The proposed lending program in 2002-2004 consists of four projects (Appendix 4). The four loans are the SME Development in the Atolls, Education Development, Regional Development (Phase II), and Strengthening Public Accounting System. The project selection briefs are in Appendix 6. The proposed program is consistent with the priorities identified in the Government’s Sixth National Development Plan and with ADB’s poverty assessment for the Maldives. 31. The SME project is aimed at providing financial and institutional support for businesses in the atolls. It will also assist in improving the policy and regulatory requirements to foster SME development in the atolls. The education project is aimed at closing the skills gap for the poor (i.e., those in the atolls) to improve social development. Upgrading primary education in the atolls and strengthening postsecondary education will also be considered. The regional development project will support Government efforts to develop a series of regional growth nodes and consolidate the population. In this second phase, the focus will be on developing regional development management offices and providing an enabling infrastructure in one or possibly two of the other regional nodes. Infrastructure and institutional requirements will be examined in the north-central, south-central, and central atolls. The public accounting system project aims at implementing a unified accounting, auditing, and budgeting system across the Government. This will improve governance by providing the Government with a greater measure of fiscal control and the capacity to mainstream poverty reduction initiatives in public expenditure planning. C. Technical Assistance and Economic and Sector Work Program32. The TA program is envisaged to be about $1 million annually. The proposed TA program for 2002-2004 includes 12 TAs for a total of $4.6 million, or an annual average of $1.5 million including overprogramming (Appendix 4). ADB will select TAs equivalent to $1 million each year in consultation with the Government during the country program confirmation mission. The focus of the TA program is on project preparation, institutional strengthening, and capacity building. Three project preparatory TAs (PPTAs) are included to assist the three loans. A PPTA in the area of applying the information technology network for poverty reduction will also be undertaken. This will assess the scope for using the Government’s information network for a range of e-health, e-education and e-commerce applications to serve the atoll community. 33. The economic and sector work program will provide advisory services aimed at strengthening the Government’s capacity to respond appropriately to an array of anticipated challenges (Appendixes 5 and 6). This includes the challenges posed by decentralization, support for private sector development, and the Maldives' possible graduation from the least developed country (LDC) status. TAs will be provided for developing a transport master plan and improved planning and institutional strengthening in public sector management. A TA will be provided to help develop an autonomous regulatory authority for public utilities. Support will also be given for divestiture and revenue diversification to help the Government develop the capacity to launch a comprehensive privatization program in a transparent and fiscally responsible manner. In anticipation of the eventual graduation from LDC status, TAs in the areas of debt management and graduation planning will be provided. These will be complemented by efforts to strengthen the information base for economic management. TA concept papers and economic and sector work program are in Appendixes 5 and 6. D. Summary of Changes34. In line with the new country strategy and due to the scarcity of TA resources, changes have been made in the 2001 TA program. The new program, with a total amount of $850,000, has three TAs: (i) a PPTA for the Regional Development (Phase II) in 2003, for $600,000; (ii) an ADTA for analysis of a Social Security System, for $100,000; and (iii) a PPTA for Capacity Building for the Public Accounting System in 2002, for $150,000. 35. The major changes in the 2001 TA program are (i) the deferment of the PPTA for Postsecondary Education Development (Phase II) from 2001 to 2002 (now called Education Development) due to the need for additional work on firming up the project concept, with the possible inclusion of the primary education subsector; (ii) deferment of the ADTA for a Transport Master Plan to 2003; (iii) canceling of an ADTA for Population Consolidation that will be assisted by other funding agencies; and (iv) canceling of an ADTA for Procurement Support and Project Management, where ADB could provide necessary assistance through seminars/training courses.
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