Tuvalu: Supporting Reforms to Strengthen Fiscal Resilience and Improve Public Service Delivery

Sovereign Project | 51245-001

The proposed knowledge and support technical assistance (KSTA) will help implement and sustain the government's medium term public sector management reform agenda by supporting efforts to build on sound public financial management practices and improve public service delivery. The proposed KSTA is included in the country operations business plan 2018 2020 for Tuvalu approved in September 2017 and is aligned with the Asian Development Bank's (ADB) Pacific Approach, 2016 2020. Also linked to strategic areas in Tuvalu's National Strategy for Sustainable Development, 2016 2020 (Te Kakeega III), notably good governance; the economy, growth and stability; infrastructure and support services.

Project Details

  • Project Officer
    Olsson, Sivou Beatrice
    Pacific Department
    Request for information
  • Country/Economy
    Tuvalu
  • Sector
    • Public sector management
Project Name Supporting Reforms to Strengthen Fiscal Resilience and Improve Public Service Delivery
Project Number 51245-001
Country / Economy Tuvalu
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 9419-TUV: Supporting Reforms to Strengthen Fiscal Resilience and Improve Public Service Delivery
Technical Assistance Special Fund US$ 700,000.00
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

Gender Equity and Mainstreaming No gender elements
Description

The proposed knowledge and support technical assistance (KSTA) will help implement and sustain the government's medium term public sector management reform agenda by supporting efforts to build on sound public financial management practices and improve public service delivery. The proposed KSTA is included in the country operations business plan 2018 2020 for Tuvalu approved in September 2017 and is aligned with the Asian Development Bank's (ADB) Pacific Approach, 2016 2020. Also linked to strategic areas in Tuvalu's National Strategy for Sustainable Development, 2016 2020 (Te Kakeega III), notably good governance; the economy, growth and stability; infrastructure and support services.

The reform measures directly supported by the proposed KSTA are articulated in the government's fourth Policy Reform Matrix (PRM IV) covering the period 2016 2020. Since 2012, the PRMs have been an implementation and monitoring tool for the government's reform priorities that also provide the basis for the provision of general budget support. The implementation of the PRM has led to substantial improvements in macroeconomic and fiscal management, including greater fiscal discipline asserted on the budget process and consideration given to fiscal sustainability. ADB's ongoing capacity development TA has played a critical role in supporting the implementation of selected reforms under the first three phases of the PRM and tagged to ADB policy-based operations in 2012 and 2015 delivering $4.35 million in policy-based grants. The proposed KSTA will build on previous ADB interventions to support public financial management, which will be anchored to ADB's policy-based operations planned for 2018 and 2019, both valued at $2 million each.

Project Rationale and Linkage to Country/Regional Strategy

Tuvalu is a fragile microstate and one of the smallest Pacific economies. The country is made up of a series of small, low-lying coral atoll and reef islands and has an estimated population of 11,000 (2013). It is geographically isolated, vulnerable to adverse climatic events and economic shocks, and has a small and narrow production and export base. The country relies heavily on external sources of income and the capacity constrained public sector as the main employer and driver of economic activity, with public expenditure equivalent to about 126% of gross domestic product (GDP) in 2016.

Almost all goods, and even many services, are imported. With few exports, the government is almost entirely dependent on donor aid and external income streams such as revenue from fishing license fees, remittances, earnings from the country's sovereign wealth fund, and rent of its _dot.tv_ internet domain name, which are highly volatile and prone to external shocks. Consequently, fiscal management is difficult, making it imperative for government to continue with fiscal and structural reforms to build up fiscal buffers, improve the quality of public spending and service delivery, and so improve economic performance in future years.

After being hard hit by the global economic crisis, Tuvalu has returned to a path of steady growth averaging 2.5% over 2014-2016 and is projected to rise to 3.2% in 2017 driven by large government funded capital projects including investment in a waterfront reclamation project and building of public schools as well as ongoing public spending on expanding accommodation capacity ahead of the Pacific Island Forum Leaders Meeting in 2019. Government revenues have been supported by strong fishing license earnings, which at 53.2% of GDP in 2016 is at record levels, and development partner assistance, resulting in a fiscal surplus in 2016 equivalent to 34% of GDP. As of 31 March 2017, the investments of the Tuvalu Trust Fund (TTF) has exceeded its maintained value of A$161 million by A$5.5 million or 3.4% while savings in the Consolidated Investment Fund, projected at A$26.2 million by end 2017, is above the 16% threshold of the TTF maintained value. As the main fiscal stabilization tools, these fiscal buffers will help Tuvalu meet long term financing needs and offer some protection against unexpected financing gaps.

Despite the favorable macroeconomic performance, the August 2017 International Monetary Fund Staff Mission concluded that Tuvalu's macroeconomic outlook remains susceptible to risks stemming from the effects of climate change, volatile fishing revenues, high degree of dependence on development partner funding, limited financial supervision, and fiscal liability of public enterprises with weak balance sheets. Given this reality and recognition that it cannot rest on its previous accomplishments, the government's reform priorities expressed in PRM IV focuses on preserving fiscal buffers, pursuing expenditure and revenue efficiencies, and improving the level of public service delivery.

Impact To achieve a greater level of security and prosperity for all Tuvaluans.
Project Outcome
Description of Outcome Public sector management improved
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Procurement compliance strengthened

Public enterprise performance and management strengthened

Strengthened resilience through updated building codes

Status of Implementation Progress (Outputs, Activities, and Issues) 2018 Update: All consultants recruited and implementation is starting for the 3 main outputs.
Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Olsson, Sivou Beatrice
Responsible ADB Department Pacific Department
Responsible ADB Division Pacific Subregional Office in Suva, Fiji
Executing Agencies
Asian Development Bank
6 ADB Avenue,
Mandaluyong City 1550, Philippines
Ministry of Finance
Vaiaku, Funafuti, Tuvalu
Timetable
Concept Clearance 31 Oct 2017
Fact Finding 02 Oct 2017 to 06 Oct 2017
MRM -
Approval 07 Nov 2017
Last Review Mission -
Last PDS Update 29 Mar 2018

TA 9419-TUV

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
07 Nov 2017 29 Nov 2017 29 Nov 2017 31 Dec 2019 31 Dec 2020 01 Mar 2021
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
700,000.00 0.00 0.00 0.00 0.00 0.00 700,000.00 17 Jun 2022 597,582.06

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.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.


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
Tuvalu: Supporting Reforms to Strengthen Fiscal Resilience and Improve Public Service Delivery Validation of Technical Assistance Completion Reports Dec 2021

Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

Tender Title Type Status Posting Date Deadline
Civil Engineer/Team Leader Individual - Consulting Closed 31 Jan 2018 06 Feb 2018
Hotel Management Advisor Individual - Consulting Closed 30 Nov 2017 06 Dec 2017
Architect Individual - Consulting Closed 30 Nov 2017 06 Dec 2017
Legal Expert Individual - Consulting Closed 21 Nov 2017 27 Nov 2017
Public Enterprise Specialist Individual - Consulting Closed 21 Nov 2017 27 Nov 2017
Public Procurement Specialist Individual - Consulting Closed 21 Nov 2017 27 Nov 2017
Accountant (MYOB) Individual - Consulting Closed 21 Nov 2017 27 Nov 2017

Contracts Awarded

No contracts awarded for this project were found


Procurement Plan

None currently available.