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Table of Contents
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I. Current Development Trends and Issues
II. Implementation of the Country Strategy and Program
III. Portfolio Management Issues
IV. Country Performance and Assistance Levels
Country Strategy and Program Update 2006–2008: Maldives

Portfolio Management Issues

A. Portfolio Performance

32. As of 31 December 2004, ADB’s public sector lending to the Maldives comprised 13 loans for $83.1 million and 53 TAs for $17 million. ADB’s current portfolio in the country comprises seven active loans and one loan/grant with a total value of $48.4 million: Postsecondary Education Development, Regional Development (Phase I), Information Technology Development, Outer Islands Electrification, Strengthening Public Accounting System, Employment Skills Training, Tsunami Emergency Assistance Project, and Regional Development (Phase II). The Strengthening Public Accounting System Project, signed in September 2002, has not been declared effective due to one outstanding condition—the submission of the remaining two draft bills to the People’s Majlis.17 The performance of other ongoing loan projects is generally satisfactory.

33. The Country Portfolio Review Mission in late November 2004 (i) reviewed ongoing loan and TA activities, (ii) identified generic as well as project-specific problems, and (iii) discussed remedial measure to improve portfolio performance. The implementation progress of five of the six ongoing loans was rated satisfactory, while one loan was unsatisfactory.18 As of 31 December 2004, 16.7% of the portfolio was considered “at risk”. Contract awards and loan disbursement ratios in 2004 (2.4% and 6.9%, respectively) were far below ADB average (17.4% and 17.7%). This low disbursement ratio was due mostly to two loans approved in 2001, which experienced relatively long start-up delays.

B. Performance Monitoring and Evaluation

34. A number of indicators on financial and portfolio performance, as well as portfolio supervision, still need urgent attention.19 As of 30 April 2005, contract commitment and disbursement ratios increased compared with the last quarter of 2004. Only the loan for the Strengthening of the Public Accounting System Project is classified as “at risk.” Given the urgent need for reconstruction and rehabilitation, rapid and effective project implementation has become a top priority for the Maldives, especially for the TEAP. The EMM will monitor closely implementation, supported by project review and country portfolio review missions from ADB headquarters. On the Government side, the National Economic Recovery and Reconstruction Program and Ministry of Finance and Treasury, as the Executing Agency of all ADB-assisted projects, are responsible for ensuring timely project implementation.20 Emergency assistance and other projects focused on poverty reduction in the atolls usually require greater effort to monitor. In November 2004, the Country Portfolio Review Mission reached an agreement with the Government on an action plan designed to improve project performance.

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  1. The Government asked ADB management to seek a Board waiver for the last condition, the submission of the draft Public Enterprise Bill and the Amendment of the Audit Act. Instead of these, several presidential decrees have been issued. (para. 27).
  2. ADB. 2002. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Maldives for Strengthening of the Public Accounting Systems. Manila.
  3. These are: (i) contract commitment ratio (much lower than ADB average), (ii) disbursement ratio (also lower than ADB average), (iii) unsatisfactory project ratings, (iv) higher number of projects at risk, (v) higher number of projects with implementation delays (two projects rated partially satisfactory and one unsatisfactory), (vi) increased numbers of projects with significant disbursement delays (three), and (vii) lower average supervision intensity (staff-days/project). The six ongoing projects have been satisfactory in terms of development objectives. In terms of implementation progress, five projects have been satisfactory and one unsatisfactory. Improvements, however, are noted on indicators such as (i) start-up compliance, particularly average time from approval to signing; (ii) imprest fund turnover ratio; (iii) submission of advanced procurement action and audited financial statements; and (iv) establishment of project management unit/project implementation unit.
  4. The National Economic Recovery and Reconstruction Program will manage the implementation of tsunami-related rehabilitation and reconstruction projects.
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IV. Country Performance and Assistance Levels

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