Kiribati: Economic Management and Public Sector Reform

Sovereign Project | 42035-012

Summary

The TA supports the Government's strategies to demonstrate commitment to fiscal prudence and refrain from unnecessary over-spending, strengthen public financial management through long-term budget strategies, including multi-year budgets and improve and enhance efficiency of public enterprises as set out in Kiribati National Development Plan 2008-2011.

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Project Name Economic Management and Public Sector Reform
Project Number 42035-012
Country Kiribati
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7166-KIR: Economic Management and Public Sector Reform
Japan Special Fund US$ 800,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector

Public sector management - Economic affairs management

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The TA supports the Government's strategies to demonstrate commitment to fiscal prudence and refrain from unnecessary over-spending, strengthen public financial management through long-term budget strategies, including multi-year budgets and improve and enhance efficiency of public enterprises as set out in Kiribati National Development Plan 2008-2011.
Project Rationale and Linkage to Country/Regional Strategy

The TA was programmed under the CSPU 2006-2007 and directly supports the Kiribati Development Plan 2008-2011, which is aimed at enhancing and sustaining growth to reduce poverty. The proposed TA directly supports this objective by building a foundation for the development of growth sectors. The TA implements ADB' Pacific Strategy by focusing on (i) strengthening government capacity to plan and manage for development results; (ii) strengthening transparency and accountability of the Government; and (iii) improving state-owned enterprise ownership, accountability, and performance.

Kiribati falls under the weakly performing country (WPC) criteria established under the ADB policy for Achieving Development Effectiveness in WPCs . It is highly vulnerable to factors that have been acknowledged to underlie weak performance, including its small size, far flung islands over vast ocean area, and geographic isolation, but most of all the country suffers from (i) weak policy, policy implementation, (ii) weak management capacity, and (iii) meager public sector resources and resource endowments. As a WPC and in accordance, with ADB' WPC policy, the proposed TA applies flexibilities available to WPCs, particularly by fostering longer term engagement under the technical assistance, incorporating focus on capacity and institutional building; and by applying new TA delivery modalities, including through use of volunteers to achieve more relevant capacity building outcomes that can be sustained and re-enforced through on-the-job and trainer training concepts.

In order for the objectives of the new Kiribati Development Plan 2008-2011 to be achieved, the processes for annual budgeting, corporate planning, and sector planning must be improved and consolidated to reflect the intended development targets in the medium-term.

The Government has acknowledged inadequacies in the fiscal and planning framework and its weak absorptive capacity, and has requested that ADB provide technical assistance in close consultation with Pacific Financial Technical Assistance Center (PFTAC) to implement capacity building for the adoption of the MTFF, and through this process improving fiscal performance by reducing leakages particularly subsidies to loss-making public enterprises (PEs).

Impact The intended impact of the TA is to improve fiscal performance, so reducing the fiscal deficit, through use of a disciplined medium term fiscal framework (MTFF) and by taking specific steps to control key expenditure items.
Project Outcome
Description of Outcome The outcomes of the TA are expected to be the adoption of the MTFF approach to fiscal planning and implementation of reforms to improve the management and performance of public enterprises. These outcomes will be achieved in a phased approach which incorporates sufficient capacity building opportunities
Progress Toward Outcome The TA succesfully assisted the Government in selling one of its SOE - Kiribati Supply Company Limited (KSCL) in 2011. Government has identified further SOEs for the TA to support - Betio Shipping Limited, Otintaai Hotel Limited, Kiribati Shipping Services Limited, Television Kiribati Limited and Bobotin Kiribati Limited. A MTFF was developed in 2010 which was used for the 2011 and the 2012 budget.
Implementation Progress
Description of Project Outputs

Subproject 1:

1. Capacity Development (CD) Diagnostic Analysis.

2. CD Program designed in support of subprojects 1 & 2.

3. CD activities, including on-the-job training, mentoring etc.

Subproject 2:

1. Implementation of a multiyear budget framework (MYBF).

2. Implementation of a medium-term fiscal framework.

Subproject 3:

1. Start of implementation of PE portfolio performance improvement strategy.

Status of Implementation Progress (Outputs, Activities, and Issues) The TA has made good progress and assisted the Government to (i) review the draft Public Services Act, Kiribati conditions of services policy, Public Finance Ordinance and other financial legislation; (ii) put in place a draft medium-term budget framework, and (iii) prepare and implement a detailed strategy and step-by-step work plan for the sale of Kiribati Supply Company Limited (KSCL).
Geographical Location Republic of Kiribati
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design A multi-donor mission from ADB/PFTAC/AusAID/NZAID in November/December 2006 consulted the Office of the President, MFED, the Office of Auditor General, the Office of Solicitor General, the Ministry of Foreign Affairs and Immigration, the Customs Office, the Kiribati Oil Company (KOIL), the Air Kiribati, and the ANZ Bank of Kiribati on the joint assistance program, including the intent of this TA.
During Project Implementation The scoping report, providing the objectives, impact, and outcomes for the TA, prepared by PFTAC was reviewed in September/October 2007 relevant Government agencies, including the MFED, the Office of the Auditor General, the Office of Attorney General, and the Ministry of Fisheries and Marine Resources Development.
Business Opportunities
Consulting Services The TA will finance 23 person-months of international consulting services and 5 person-months of a national consultant. The proposed consultants will comprise (i) Public Financial Management Specialist/Team Leader (international; 9 person-months intermittent), (ii) Treasury Specialist (1 person-months, intermittent) (iii) Macroeconomist (international, 1 person-month intermitten), (iv) Capacity Development Specialist (international, 3 person-months intermittent) (v) Public Enterprise Reform Specialist (international, 7 person-months intermittent), (vi) Change Management Advisor (international, 2 person-months intermittent), and (vii) Facilitator (national, 5 person-months intermittent). ADB will engage the team of consultants as a firm based on a simplified technical proposal under the quality- and cost-based selection process.
Procurement Received additional funding from AusAid (AUD1.5million).
Responsible ADB Officer Malie Lototele
Responsible ADB Department Pacific Department
Responsible ADB Division Pacific Subregional Office in Suva, Fiji
Executing Agencies
Ministry of Finance and Economic DevelopmentHon Natan Teeweenteewe@mfep.gov.kiMin. of Finance & Economic Development P O Box 67 Bairiki Tarawa, Kiribati
Timetable
Concept Clearance 03 Mar 2008
Fact Finding 24 Jun 2008 to 24 Jun 2008
MRM -
Approval 07 Nov 2008
Last Review Mission -
PDS Creation Date 22 May 2008
Last PDS Update 14 Nov 2011

TA 7166-KIR

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
07 Nov 2008 04 Dec 2008 04 Dec 2008 30 Nov 2012 02 Sep 2013 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
800,000.00 0.00 80,000.00 0.00 0.00 0.00 880,000.00 07 Nov 2008 2,222,548.87
Title Document Type Document Date
Economic Management and Public Sector Reform TA Completion Reports Jul 2014
Economic Management and Public Sector Reform: Final Report Consultants' Reports Sep 2013
Economic Management and Public Sector Reform Technical Assistance Reports Nov 2008

Safeguard Documents

See also: Safeguards

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Evaluation Documents

See also: Independent Evaluation

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