Catalog

	Table of Contents
p. 17 of 29 BACK | NEXT Executive Summary I. Introduction II. Development Challenges III. Key Variables Influencing Development IV. External Assistance A. General B. ADB Assistance C. Aid-coordination V. Review of ADB Assistance and Strategy VI. The New Pacific Strategy

A Pacific Strategy for the New Millennium : IV. External Assistance

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A. General

41. Bilateral development assistance has been an important resource. Of the total net disbursement of official development assistance to the PDMCs, bilateral sources account for over 80 percent. Multilateral sources have been the minor players. The net disbursement of aid to the PDMCs was about $730 million in 1992 and about $700 million in 1998, with moderate variations during the intervening period. Per capita aid extended to the PDMCs was significantly higher than the global average. In 1998, the per capita net disbursement of aid to the PDMCs from all sources was about $110, i.e., less than 7 million people receive more than $700 million of aid annually. There are significant variations across PDMCs in the per capita aid level, primarily on account of population size. In 1998, the per capita net disbursement of aid ranged from $825 in the RMI and $700 in the FSM, to $82 in PNG and $48 in the Fiji Islands. Another feature of aid to the Pacific is the high proportion of technical assistance (TA) in the aid portfolio.

42. Among the providers of bilateral assistance, the most prominent is Australia. Australia will provide about $190 million to PNG alone in 2000/01, focusing on governance, education, health, infrastructure, renewable resource management, and the peace process in Bougainville. For the 11 other PDMCs, Australia will provide about $88 million to help them deliver essential services. The goal of Australian assistance to the PDMCs is to promote self-reliance through better governance, stronger growth, greater capacity, better service delivery, and environmental integrity. Of the 11 PDMCs, Australian aid focuses on the Fiji Islands, Kiribati, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu. In addition, Australia will provide about $20 million to support the network of regional organizations and institutions that assist the PDMCs.

43. Japan, the United States, New Zealand and United Kingdom are the other prominent providers of bilateral assistance. Japanese funding focuses on agriculture, forestry, fisheries, and basic infrastructure, including hospitals, schools, and water supply facilities. In 1998, the net disbursement of Japanese official development assistance to the PDMCs was about $130.0 million. The Unites States’ official flows to the PDMCs are almost completely focused on the FSM and RMI, primarily through Compact Funds. In 1998, the net disbursement of United States official development assistance to the PDMCs was about $100.0 million, with 98.0 percent of the same flowing to the FSM and RMI. New Zealand's assistance focuses on health, education, environment, human resource development, and private sector growth. Total assistance from New Zealand to the Pacific is about $40 million per annum. The United Kingdom contributes about $6.0 million per annum to the Pacific region, focusing on education and good governance.

44. The European Union (EU) and the World Bank are significant other multilateral contributors to the Pacific. While the EU's level of commitment has fluctuated considerably, it has primarily supported transport, communication, industry, construction, mining, and energy. The World Bank’s lending, about $50 million annually, has focused on infrastructure, transport, agriculture, education, health, delivery of public services, macroeconomic environment, capital markets, trade and investment regime, and governance. World Bank loans to the Pacific have been confined to 6 PDMCs: the Fiji Islands, PNG, Samoa, Solomon Islands, Tonga, and Vanuatu. Three of the 12 PDMCs (Cook Islands, Nauru, and Tuvalu) are not members of the World Bank.

45. UNDP coordinates the activities of various UN agencies. These agencies are concerned with a wide range of fields including the social sectors, employment, sustainable livelihood, gender issues, disadvantaged groups, environment, and governance. In addition to the regular Article IV consultations and surveillance, the International Monetary Fund has established, jointly with other funders (including ADB), the Pacific Financial Technical Assistance Centre in Suva to extend technical advice and build the institutional capacity of the PDMCs for sound economic and financial management.

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