Regions and Countries

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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 Assistance Levels

Country Strategy and Program Update 2004-2006: Tuvalu

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III. Implementation of the Country Strategy and Program

A. Progress under the Poverty Partnership Agreement

20. The poverty partnership agreement between the Government of Tuvalu and ADB was signed on 3 April 2003. It confirms the Government’s commitment to better define and assess the concept of poverty, design appropriate strategies to reduce poverty, and incorporate these strategies into the country’s development plans, consistent with the Government’s priorities.

21. Tuvalu scores high on almost all Millennium Development Goals. The country has achieved universal primary education and has eliminated gender disparity in primary and secondary enrolment rates. However, literacy and numeracy appear to be declining due to the deteriorating quality of education, decreasing morale of teachers, weak school management, and deterioration in the level of English proficiency. Social pressure also discourages women from pursuing postsecondary education.

22. Though poverty is not considered an issue yet, the Government acknowledges that there are wide disparities in access to services and cash income opportunities between the population on Funafuti and on the outer islands. Poverty on the outer islands, where primarily the old, the very young, and women reside, is growing, and among the people who have immigrated to Funafuti, pockets of poverty are emerging.

23. Through an ongoing TA³ and a regional technical assistance (RETA),⁴ ADB will assist the Government in undertaking a participatory assessment of poverty, reviewing the existing NDS, and preparing a new NSDS. The RETA will also review and validate the Government’s programs for poverty reduction and assist in the drafting of growth and poverty reduction policies.

B. Progress in the Country Strategy and Program Focus Areas

24. Under ADB's country strategy, social development was addressed under the recently closed Island Development Program (IDP) loan that helped establish the Falekaupule Trust Fund (FTF) to provide a sustainable stream of funding for development projects and maintenance of community assets in the outer islands. An ongoing associated TA, aimed at improved governance, administration, and service delivery on the outer islands, helped to establish the Secretariat for the FTF. The Government has requested ongoing advice to help with FTF management. Similar assistance provided to the TTF has been critical to the TTF's long-term success. The positive results from the FTF has attracted additional support from several donors. The New Zealand Agency for International Development (NZAID) is providing advice to the FTF under its ongoing assistance to the TTF Advisory Committee. In addition, NZAID plans to provide capital contributions to the FTF of NZ$350,000 per annum over the next 5 years. Complementing this assistance will be further support for local governments in the form of a training needs assessment and further education of island communities on accessing the FTF for community projects. The United Nations Development Programme (UNDP) will likely support this training effort on the outer islands. The involvement of the donors in outer island development has allowed the ADB to refocus its strategy on social development and human resource development.

25. In addition to declining basic services and increasing income inequalities, the lack of employment and the high rates of urban population growth driven by the lack of opportunities on the outer islands are matters of concern. There is a need to accelerate human resource development, as education will create the desire and capability for entrepreneurial activity as well as the demand for good governance. To improve human resources development and enhance employment opportunities, the recently approved US$1.85 million loan for the Maritime Training Project and its associated TA⁵ will upgrade the structures and training facilities of TMTI. The project will continue both to improve the quality of education and training and to prepare seafarers for overseas employment, which constitutes the main source of jobs and income for Tuvaluans in the private sector. The outer island communities benefit most from remittances of seafarers who graduated from TMTI. Further assistance will be provided under a RETA ⁶ to improve the quality and accessibility of education, health, and telecommunication services.

26. The Government’s reforms in the education sector envisage the establishment of a secondary school to accommodate Forms 5–7 and to improve the students’ performance and learning outcomes. Loan assistance in this area is considered appropriate. A project preparatory technical assistance (PPTA) will be provided to help prepare a proposed secondary education project and to help establish an education committee to guide sector policy and plans. Such assistance would minimize coordination problems and lead to a significant improvement in the delivery and quality of education services.

27. To address the weaknesses in economic and financial management and to provide continuing policy advice, a top-to-bottom assessment of the state of the budgeting and accounting system and of options for the future will be conducted in mid-2003 under an ongoing TA.⁷ To continue support for the improvement of public financial management and to foster good governance, a proposed TA to help formulate a strategic plan for improving public finance management and for ensuring fiscal sustainability is planned. The new TA will strengthen the financial management processes within the Ministry of Finance, Economic Planning, and Industries (MFEPI), including integrating the accounting and budgeting systems, and will pursue further reform of tax policy.

28. The general lack of appropriate financial and policy governance of the SOEs, and the concern that the SOEs are insufficiently accountable for their actions and performance, call for a more detailed examination of their governance to identify issues, assess the scope for improving performance, and recommend an appropriate strategy for better service delivery at least cost. The major SOEs and commercial government departments have key roles to play in the provision of infrastructure for improving economic performance and social outcomes. This is especially the case on the outer islands because of the involvement of SOEs in telecommunications, electricity, and interisland transportation. To help the Government with the management and monitoring of SOEs, a TA on improving governance of SOEs is planned.

29. While the Government has educated the public on waste issues, established a dedicated landfill, begun composting vegetable waste, and prepared plans to control medical waste, the Environment Unit’s effectiveness is currently constrained by the uncertainty surrounding future institutional responsibility for waste management. There is an urgent need, not only for improved waste management, but also for water management, since the increasing population density on Funafuti raises major public health concerns. Water and waste management are particularly interlinked in the small island setting, as water supplies are readily contaminated through poor waste management. Some efforts toward improving the management of these subsectors have been initiated through a RETA⁸ and through activities financed by other external agencies that have identified the need for further interventions. Additional assistance is needed to assist the Government in developing specific programs, regulations, and guidelines, including the development of a water, sanitation and waste master plan, implementation of cost recovery, and institutional development. Accordingly, TAs for Effective Waste Management and Recycling and for Water, Sanitation, and Waste Management are proposed. These will require widespread community involvement and could be expanded to outer island communities.

C. Highlights in the Coordination of External Funding and Partnership Agreements

30. Japan, the largest development partner for Tuvalu, recently completed a new hospital on Funafuti. Its future program includes upgrading the main wharf and the power supply and facilities on Funafuti. Taipei,China, the second largest development partner, is financing the construction of a new three-story central government office building on Funafuti, which is expected to be completed in early 2004. In addition, Taipei,China will provide US$2 million in grant financing per annum for 2003–2007.

31. The assistance of the key multilateral agencies, EU and UNDP, complements ADB's assistance to the outer islands under the IDP. The focus (90%) of European Union assistance for 2003-2007 is on social development support, specifically for activities on the outer islands in education (through improving primary school infrastructure, equipment and supplies, teacher accommodation, curriculum, and teacher training courses), water supply (through improving catchment facilities), and environment (through extension of a waste management project), and the remaining for support to nonstate actors for development activities and capacity building.

32. The assistance of UNDP for 2003–2007 is primarily directed towards reducing disparities in services and opportunities between Funafuti and the rest of Tuvalu, and within the outer island groups, through strengthening the capacities of the island councils for effective decentralization and through supporting the implementation of a social development policy with an emphasis on the disadvantaged and vulnerable, particularly women, children, the disabled, and the aged for improved social services and quality of life.

33. AusAID supports human resources development through in-country training in vocational education and overseas scholarships and training. TA in education is given in curriculum development. AusAID also supports a teacher and business volunteer program and has provided TA for aid coordination. ADB's proposed project in waste management builds on the recently completed AusAID project on the same issue. ADB's proposed project addresses pending weaknesses in policy and institutional development.

34. ADB has liaised closely with NZAID regarding the latter's contributions to the FTF and possible ADB assistance for secondary education (where coordination with NZAID will be required). NZAID has a large program for education, training, and human resources development. Overseas scholarships at secondary and tertiary levels, short-term technical/vocational training in Tuvalu, and feasibility studies on early childhood education and technical/vocational education are provided. NZAID is reviewing its reef channels project as part of its assistance to the outer islands. It is also strengthening local governments by assisting the management of the FTF, including technical advice, undertaking a training needs analysis of local governments, and providing assistance to help communities access the FTF. Capital contributions to the FTF are programmed for the next 5 years starting in the current financial year. NZAID’s future focus is human resources development, outer island development, and support to the TTF and FTF. A matrix showing the interventions of the various agencies is attached in Appendix 2, Table A2.6.

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