Catalog

	Table of Contents
p. 19 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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C. Aid-coordination

47. Coordination of aid programs is improving. During the past decade, the aid programs in the Pacific were largely sponsor-driven, often uncoordinated, and placed pressure on the absorptive capacities of the PDMCs. This led to a culture of aid-dependence for financing of the capital budget and associated downstream problems, particularly inadequate recurrent budgeting for operation and maintenance. Recently, aid coordination has improved considerably. A major contributing factor has been aid coordination and communication at operational levels in the countries concerned and the recognition of the value of aid coordination by the PDMCs themselves. ADB has played a lead coordination role in a number of PDMCs, particularly for Pacific reform programs. ADB has also been facilitating aid cooperation through the consultative group process to consolidate and enhance complementarity of efforts of the various external funding agencies. Over the last five years, 11 consultative group or development partner meetings were convened — 4 for the FSM, 3 for the RMI, 2 for the Cook Islands, and 1 each for Kiribati, Solomon Islands, and Vanuatu. In the medium term, ADB will continue to play a catalytic role in coordinating policy advice and investments to the PDMCs facing fiscal and economic crises by convening these meetings and mobilizing financial assistance.

48. The challenge for PDMC governments is to take a more proactive role in aid coordination. This should appropriately be done by formulating public investment programs that are meaningfully integrated with annual budgets, and that provide effective guidance to external funding agencies on how each can fit into the national game plan. The challenge for funding agencies is to communicate effectively, share knowledge and plans, and thus turn the rhetoric of external agency coordination into reality. In this regard, ADB is strengthening its ties with its development partners– particularly with UNDP, World Bank, EU, Australia, Japan, New Zealand, United States, and United Kingdom–in the areas of overall aid coordination and cofinancing activities.

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