Countries and Regions

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p. 4 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 2003-2005: Vanuatu

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IV. Portoflio Management Issues

A. Portfolio Performance

30. Since joining ADB in 1981, Vanuatu has received 9 loans totaling $51.25 million, and 52 TAs totaling $13.515 million, of which 1 loan and 11 TAs of $4.41 million were active as of 31 December 2001. The only active loan was rated satisfactory. In 2001, actual contract awards under the urban infrastructure project totaled $780,000, or 96% of ADB’s projection. In 2001, actual disbursement was $2.763 million or 88% of ADB’s projection. Portfolio indicators for lending products are in Appendix 2, Tables A2.7—A2.10.

31. Vanuatu’s loan portfolio performance—not very good under early development bank, multiproject, and agriculture loans approved through 1991—improved markedly under urban infrastructure, emergency rehabilitation and program loans approved in the late 1990s. Problems encountered have included limited project design and implementation capacity, poor quality of design services, and lack of attention to special covenants under loan projects. All of these problems continue to exist, but they are now alleviated through appropriate measures taken during preparation and implementation of each project. The presence of a resident mission also helps in close monitoring and rapid solution of any problems that arise. As of 31 December 2001, 18 TAs were active, including 11 ongoing and 7 completed but not financially closed. Steps are being taken to close all the completed TAs. All the TAs are being implemented successfully.

B. Performance Monitoring and Evaluation

32. Vanuatu’s willingness and ability to maintain the covenants agreed under various loan projects has varied markedly. Frequent changes in government, as well as shortages of funds, have resulted in reversals of policy. The ability of the Government to systematically pursue change is limited by shortages of experienced economists and managers in government, and by poor communications between central and line agencies. A TA proposed for 2003 to help prepare a midterm strategic framework and the ongoing TA with the NSO will help enhance capacity in this regard.

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