Countries and Regions

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p. 5 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 Levels

Country Strategy and Program Update 2005-2006: Solomon Islands

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V. Country Performance and Lending Levels

A. Lending Level Proposed

38. In view of the Government's debt situation, and considering the current inflow of substantial amounts of external grant funding, ADB supports the Government's decision not to borrow further until finances stabilize. Subject to the resolution of the debt crisis, future loan assistance may be considered in accordance with ADB's country strategy in the medium to long term. The Government's debt and absorptive capacity, as well as the need for loan finance, will be monitored closely and, if necessary, the country program will be adjusted accordingly.

B. Nonlending Program

39. Nonlending assistance for 2004-2006 focuses on the two strategic pillars of ADB's strategy: providing transportation infrastructure and services, and strengthening the enabling environment for the private sector. In 2004, to support the reactivation of ADB programs in Solomon Islands, TA will focus on institutional strengthening and diagnosis of required reforms in each key area. In 2005-2006, TA will assist the Government in undertaking comprehensive reforms, increasing private sector participation, improving the legal and regulatory environment, and implementing the economic reform agenda. ADB will also prepare for the Government an economic report with in-depth analysis of, and policy options for, critical issues on the development agenda. The nonlending assistance program is summarized in Appendix 2 and specific concept papers are in Appendix 3.

40. Flexibility will be required in the proposed assistance program over the duration of the planning period, to reflect the progress made in the country's overall rehabilitation and development process and to adjust to other aid agencies' strategies and programs. Standby TA has been programmed to allow for additional resources that may be required to privatize selected SOEs, subject to availability of TA resources (and possible cofinancing).

C. Summary of Changes to Lending and Nonlending Program

41. As this is the first country strategy and program update prepared for Solomon Islands since 1999, there are no changes to report.

42. For reference, the 2004 Assistance Program for Nonlending Products and Services is provided in Table A4.1.

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