Regional: Responding to Economic Crisis

Sovereign Project | 43321-012

Summary

The project preparatory technical assistance (PPTA) will undertake an informed analysis of the options available for Republic of the Marshall Islands RMI to: (i) optimize the wage and salary burden; (ii) reduce the subsidies to statutory authorities; (iii) improve the efficiency of the finance and budget processes; and (iv) improve data for economic planning and monitoring.

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Project Name Responding to Economic Crisis
Project Number 43321-012
Country Regional
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7336-REG: Responding to Economic Crisis
Technical Assistance Special Fund US$ 225,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector Public sector management - Economic affairs management - Public expenditure and fiscal management
Gender Equity and Mainstreaming Some gender elements
Description The project preparatory technical assistance (PPTA) will undertake an informed analysis of the options available for Republic of the Marshall Islands RMI to: (i) optimize the wage and salary burden; (ii) reduce the subsidies to statutory authorities; (iii) improve the efficiency of the finance and budget processes; and (iv) improve data for economic planning and monitoring.
Project Rationale and Linkage to Country/Regional Strategy

RMI's fiscal position has significantly worsened in FY2009 in comparison with the projected position due to: (i) reductions in revenues stemming from poor tax collections; (ii) a decrease in donor funds, in particular the funds from the US Compact of Free Association; (iii) a total of $7.065 million in additional subsidy to statutory authorities; and (iv) allocation of over 30% of the budget to the public sector wage and salaries bill. The weak revenue performance was aggravated by a high rate of tax evasion estimated at 30-40% of tax revenue resulting in annual revenue loss of about $8 million-$10 million in FY2008.

The Economic Policy, Planning, and Statistics Office (EPPSO) was established in 2004 and the Office has been working to gather and update key socio-economic data since then. Significant information gaps remain however, and the data EPPSO collects from line-ministries is often incomplete and unreliable, and new data is needed to adequately plan for the financial crisis and on-going economic downturn. The reports EPPSO publishes do not yet have an apparent effect on national fiscal policy and planning, which appears to remain largely ad-hoc and crisis driven.

Impact Working in conjunction with other development partners, and building on the work of the Economic Advisory Group, the S-PPTA will identify options for improving revenue growth, containing expenditure and improving data and systems in four priority areas. The S-PPTA will provide the information to enable the ADB to prepare a project intervention to assist the RMI to respond to the financial crisis through the implementation of fiscal and structural reforms in FY2010.
Project Outcome
Description of Outcome tbd
Progress Toward Outcome
Implementation Progress
Description of Project Outputs The S-PPTA will cover research, rapid analysis, report writing and consultations with the Government, government agencies and development partners. The findings from ADB's Independent Evaluation Departments' (IED) recently completed study on public sector reforms in the Pacific will be reflected in the identified options. The following key activities are to be delivered.
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services Consultant's work is ongoing.
Responsible ADB Officer Kiyoshi Nakamitsu
Responsible ADB Department Pacific Department
Responsible ADB Division Urban, Social Development & Public Management Division, PARD
Executing Agencies
Asian Development Bank6 ADB Avenue, Mandaluyong
Metro Manila, Philippines
P.O. Box 789, 1099 Manila,
Philippines
Timetable
Concept Clearance -
Fact Finding 07 Jul 2009 to 09 Jul 2009
MRM -
Approval 25 Aug 2009
Last Review Mission -
PDS Creation Date 03 Nov 2009
Last PDS Update 25 Feb 2011

TA 7336-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
25 Aug 2009 - 25 Aug 2009 31 Oct 2010 30 Sep 2011 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
225,000.00 0.00 30,000.00 0.00 0.00 0.00 255,000.00 25 Aug 2009 215,688.47

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Safeguard Documents

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Evaluation Documents

See also: Independent Evaluation

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