MANILA, PHILIPPINES - The Asian Development Bank (ADB) will help the Tuvalu Government strengthen its public financial management and governance systems, as the island nation copes with reduced income from offshore sources due to the global financial crisis.
Tuvalu's economy has been adversely affected by a period of high fuel and food prices - pushing up overall inflation, threatening the pace of future economic growth as well as the delivery of basic social services. An expectation of declining trust fund earnings in the next two to three years has placed even greater fiscal pressure on the government.
"The Improved Public Financial Management Program will assist Tuvalu with fiscal stability, improve public enterprise performance, and boost business and public confidence in the government's financial management and governance systems," said ADB Country Specialist Emma Ferguson.
ADB is providing a grant of $3.24 million sourced from the concessional Asian Development Fund (ADF).
Tuvalu will implement key reforms in order to gain access to the funds. These reforms are expected to improve public debt management through the reduction of government debt to the National Bank of Tuvalu, and to upgrade the management of public enterprises to enhance performance.
The ADB assistance will have a strong focus on sustained economic growth, capacity development, and private sector development in line with the government's national development strategy.