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 Name||Strengthening Fiscal Stability Program|
|Project Type / Modality of Assistance||Grant
|Source of Funding / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Governance and capacity development
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|
|Description of Outcome||Improved capacity for fiscal stabilization|
|Progress Toward Outcome|
|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)|
|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|
Ministry of Finance and Economic Development
P.O. Box 67
|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|
|Approval||Signing Date||Effectivity Date||Closing|
|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%|
|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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|Title||Document Type||Document Date|
|Strengthening Fiscal Stability Program: Program Completion Report||Project/Program Completion Reports||Aug 2016|
|Grant Agreement (Special Operations) for Strengthening Fiscal Stability Program||Grant Agreement||Dec 2014|
|Strengthening Fiscal Stability Program: Report and Recommendation of the President||Reports and Recommendations of the President||Nov 2014|
|Strengthening Fiscal Stability Program: Concept Paper||Concept Papers||Aug 2014|
Safeguard Documents See also: Safeguards
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None currently available.
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ADB to Help Kiribati Improve Fiscal Management to Build Long-Term ResilienceTARAWA, KIRIBATI – The Asian Development Bank (ADB) has approved a $3 million grant which is expected to improve fiscal sustainability in Kiribati in line with the government’s fiscal framework and the Kiribati Economic Reform Plan (KERP).
No tenders for this project were found.
No contracts awarded for this project were found
None currently available.