ADB to Help Nauru with Public Financial Management Reform

MANILA, PHILIPPINES – The Asian Development Bank (ADB) has reaffirmed support for the tiny Pacific nation of Nauru in the areas of public financial management, state-owned enterprise reform, and private sector development.

Nauru, located in the central Pacific just south of the equator, is one of the world’s smallest countries with a population of about 9,000 people. It is one of the three great rock phosphate islands in the Pacific Ocean, but has a total land area of only 21 square kilometers.

While Nauru’s per capita gross domestic product was one of the highest in the world just a few decades ago, a decline in phosphate mining in the 1980s combined with poor management of the country’s offshore assets and public expenditure have led to a dramatic decline in its economic position.

ADB’s Country Operations Business Plan (COBP) for Nauru 2012-2014 will focus on public financial management and private sector development reform. ADB will also cooperate with other development partners, especially Australia, to maximize the impact of its assistance. Nauru is eligible only for grant funding from ADB’s Asian Development Fund (ADF).

“This COBP represents a scaling up of ADB’s activities in Nauru, including the country’s first ever use of ADF funds,” said Eugenue Zhukov, Regional Director of ADB’s Pacific Liaison and Coordination Office in Australia. “The program builds upon ADB’s previous assistance to support the government’s reform program, including technical assistance to help design a new intergenerational trust fund (ITF).”

Currently ADB is working with the government on a program aimed at reforming public finance management and will help provide seed funding for the ITF. ADB is also helping to reform the state-owned Nauru Utilities Corporation, and plans to broaden the scope of this reform to other state-owned enterprises. ADB is also planning a small renewable energy project for Nauru in 2014. In addition, ADB is working with the Government to help it to improve the corporate governance of the Republic of Nauru Phosphate Export State-Owned Enterprise.

ADB’s COBP for Nauru is aligned to Nauru’s National Sustainable Development Strategy.