Countries and Regions

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p. 5 of 6 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 Appendixes

Country Strategy and Program Update 2005-2006: Federated States of Micronesia

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V. Country Performance and Assistance Levels

A. Proposed Lending Level

33. The allocation of ADF funds will be determined under the revised performance-based allocation (PBA) policy (under process). For planning purposes, the lending level of $8 million every two to three years has been set, but this will be subject to change based on the revised PBA policy. Two loan projects—Loan 1816-FSM (SF): Basic Social Services Project (BSS) and Loans 1873/74 (SF): Private Sector Development Program and Project (PSDP)—are currently being implemented, and the Omnibus Infrastructure Development Project (OIDP) is under processing for approval in 2004.

B. Nonlending Program

34. The nonlending program continues to be ADB's key modality for assistance to promote good governance in FSM. In addition to the ongoing TAs in public sector management, administration, and performance-based budgeting, the TA on Streamlining and Strengthening Public Sector Audit Function for 2004 will increase the accountability of public financial management. With the underlying themes of the country strategy (i.e., promoting wider participation, addressing hardship issues, and assisting the country with longer-term perspective), TAs will be provided to support the national poverty reduction strategy, participatory nation building initiatives, and youth and gender assessments.

C. Summary of Changes to Lending and Nonlending Program

35. Changes in the assistance program from the 2002 country strategy and program updates are as follows:

1. For 2004, a loan for the OIDP originally planned in 2003 has been moved to 2004; a TA on Public Enterprise Privatization and Corporate Governance II was converted into Public Utilities Corporate Governance as a piggyback TA for OIDP to help improve management capability of public utility corporations; a TA for Business and Information Technology (IT) Skills was cancelled; and a TA for Strengthening of Public Sector Audit Function has been shifted from 2005 to 2004 to meet the urgent need to increase the government's accountability functions
2. For 2005, a loan for Business and IT Skills Development was cancelled because of a change in the government priorities; and new TAs are proposed to help develop the national hardship reduction strategy, to promote wider participation of civil society in development processes, and to help implement a public sector capacity building roadmap which will be prepared under the ongoing TA9
3. (iii) For 2006, two TAs are proposed: one for a feasibility study for a solid waste management project, another for youth and gender assessments

36. Concept papers for nonlending products and services are in Appendix 3, Tables A3.1–A3.2.

37. For reference, the 2004 Assistance Program for Lending Products and the 2004 Assistance Program for Nonlending Products and Services are provided in Table A4.1 and Table A4.2, respectively.

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