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Kiribati: Strengthening Fiscal Stability Program

Sovereign (Public) Project | 47314-001 Status: Closed

ADB is helping Kiribati improve fiscal sustainability in line with the government’s fiscal framework and the Kiribati Economic Reform Plan (KERP). The program will improve the quality of expenditure, revenue administration, and management of public assets and liabilities, as well as support structural reform implementation.

Project Details

Project Officer
Malie Lototele Pacific Department Request for information
Country
  • Kiribati
Modality
  • Grant
Sector
  • Public sector management
 
Project Name Strengthening Fiscal Stability Program
Project Number 47314-001
Country Kiribati
Project Status Closed
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0416-KIR: Strengthening Fiscal Stability Program
concessional ordinary capital resources lending / Asian Development Fund US$ 3.00 million
Grant: Strengthening Fiscal Stability Program
World Bank US$ 8.20 million
Government of New Zealand US$ 900,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Partnerships
Private sector development
Sector / Subsector

Public sector management / Public expenditure and fiscal management - Reforms of state owned enterprises

Gender Equity and Mainstreaming No gender elements
Description The objective of the program is to achieve macroeconomic stability in the long run through stabilization of Revenue Equalization Revolving Fund's real value, a gradual current fiscal deficit reduction and private sector led growth. This will help the government to stabilize public spending and maintain fiscal buffers while promoting broad-based, private sector led economic growth. The poor and vulnerable will benefit from the improved fiscal stance through expanded basic services, improvements in service efficiency and quality through predictable public spending, including in the education and health sectors, and increased SOE performance. Improving targeting of livelihood subsidies will benefit the poor directly. Further, private sector development will promote job creation and lower costs of goods and services in newly competitive sectors, which will benefit the poor.
Project Rationale and Linkage to Country/Regional Strategy Kiribati as a small island economy faces challenges of geographic isolation, limited human and financial resources, a narrow economic base, and underdeveloped markets. Its open economy is extremely vulnerable to external shocks due to a high exposure to climate change, strong import dependency and a heavy reliance on income from external sources. As a result, economic growth is highly volatile ranging between -4.5% to 7.5% p.a. in 2004 2013. The country's private sector is small, restricted by high transport costs and a limited production base. The large public sector with government spending in excess of 100% of gross domestic product (GDP) dominates a broad range of typically competitive sectors through state-owned enterprises (SOE), crowding out entrepreneurial activity. Copra and fish constitute the bulk of local production and exports. Further developing the country's marine resources, especially fisheries, complemented by liberalizing selected government-dominated sectors would potentially increase broad-based private sector growth significantly. Development indicators remain low, with none of the Millennium Development Goals on-track to be achieved. Aggravated by frequent, external shocks, individual hardship and vulnerability is widespread.
Impact Improved fiscal sustainability
Project Outcome
Description of Outcome Improved capacity for fiscal stabilization
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

1. Improved quality of expenditure

2. Improved revenue administration

3. Improved management of public assets and liabilities

4. Improved structural reform implementation

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The proposed program will have minimal or no adverse environmental impacts. It is a budget support grant with no investment component, and thus the SPSP is not expected to have any environmental impacts. An EIA or IEE is not required.
Involuntary Resettlement This is a budget support grant with no investment component, and thus the Strengthening Macroeconomic Stability Program is not expected to have involuntary resettlement impact.
Indigenous Peoples This is a budget support grant program with no investment components, and thus no IP issues are expected.
Stakeholder Communication, Participation, and Consultation
During Project Design Particular attention during processing and implementation will be paid to (i) maintaining ongoing political support for the program; and (ii) coordination with other development partners that will provide budget support and TA to Kiribati in 2014 -2016.
During Project Implementation The Ministry of Finance and Economic Development (MFED) will be the executing agency (EA) and will oversee and coordinate the implementation of agreed policy, legal, and regulatory actions. The implementing agencies will be the MFED; Ministry of Commerce, Industries and Cooperatives; and Ministry of Communication, Transportation and Tourism. Resources from ongoing TA will support the government's implementation of the KERP. The EA will be responsible for program administration, disbursements, and maintaining all records. ADB and other development partners will monitor progress, oversee the implementation of the program, and guide the activities of the MFED through the joint Economic Working Group.
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 Development
[email protected]
P.O. Box 67
Bairiki, Tarawa
Kiribati
Timetable
Concept Clearance 13 Aug 2014
Fact Finding 23 Jun 2014 to 03 Jul 2014
MRM 22 Aug 2014
Approval 28 Nov 2014
Last Review Mission -
Last PDS Update 24 Oct 2014

Grant 0416-KIR

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Nov 2014 04 Dec 2014 11 Dec 2014 31 Dec 2014 - 31 Dec 2014
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 11.20 Cumulative Contract Awards
ADB 3.00 28 Nov 2014 3.00 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 8.20 28 Nov 2014 3.00 0.00 100%

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

Title Document Type Document Date
Kiribati: Strengthening Fiscal Stability Program Validations of Project Completion Reports Aug 2017

Related Publications

None currently available.


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Tenders

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Contracts Awarded

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Procurement Plan

None currently available.