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Tonga: Strengthening Macroeconomic Resilience Program

Sovereign (Public) Project | 52030-001 Status: Closed

This program aims to strengthen Tonga's macroeconomic resilience, including to mitigate the impact of coronavirus disease (COVID-19) through supporting government's COVID-19 response. The program seeks to achieve this through: (i) addressing sources of immediate and structural fiscal and PFM risks, and (ii) improving public sector and national human resource management to both limit the immediate labor market impact of COVID-19 and to encourage long-term growth. The program has completed 11 prior actions under two reform areas. A post-program monitoring framework promoting continued reform efforts towards the JPRM's medium term objectives, was agreed with government. It will guide continued policy dialogue, and coordinate TA to further program objectives beyond its completion date. Framework implementation will be supported by coordinated TA from all partners, while progress within the framework will be closely monitored and guide the development of future policy-based operations.

Project Details

Project Officer
Webb, James M. Pacific Department Request for information
Country
  • Tonga
Sector
  • Public sector management
 
Project Name Strengthening Macroeconomic Resilience Program
Project Number 52030-001
Country Tonga
Project Status Closed
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0709-TON: Strengthening Macroeconomic Resilience Program
concessional ordinary capital resources lending / Asian Development Fund US$ 12.20 million
concessional ordinary capital resources lending / Asian Development Fund US$ 12.20 million
concessional ordinary capital resources lending / Asian Development Fund US$ 12.20 million
concessional ordinary capital resources lending / Asian Development Fund US$ 12.20 million
Grant: Strengthening Macroeconomic Resilience Program
Government of Australia US$ 7.20 million
New Zealand Grant US$ 4.00 million
World Bank US$ 5.50 million
Government of Australia US$ 7.20 million
New Zealand Grant US$ 4.00 million
World Bank US$ 5.50 million
Government of Australia US$ 7.20 million
World Bank US$ 5.50 million
New Zealand Grant US$ 4.00 million
Government of Australia US$ 7.20 million
World Bank US$ 5.50 million
New Zealand Grant US$ 4.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Partnerships
Sector / Subsector

Health / Disease control of communicable disease

Public sector management / Economic affairs management - Public administration - Public expenditure and fiscal management

Gender Equity and Mainstreaming Effective gender mainstreaming
Description This program aims to strengthen Tonga's macroeconomic resilience, including to mitigate the impact of coronavirus disease (COVID-19) through supporting government's COVID-19 response. The program seeks to achieve this through: (i) addressing sources of immediate and structural fiscal and PFM risks, and (ii) improving public sector and national human resource management to both limit the immediate labor market impact of COVID-19 and to encourage long-term growth. The program has completed 11 prior actions under two reform areas. A post-program monitoring framework promoting continued reform efforts towards the JPRM's medium term objectives, was agreed with government. It will guide continued policy dialogue, and coordinate TA to further program objectives beyond its completion date. Framework implementation will be supported by coordinated TA from all partners, while progress within the framework will be closely monitored and guide the development of future policy-based operations.
Project Rationale and Linkage to Country/Regional Strategy This program supports the reduction of adverse social and economic impacts stemming from the COVID-19 pandemic and builds on previous policy-based operations to strengthen Tonga's macroeconomic resilience. Reform area 1 (para. 20) will help the government manage and control COVID 19 and its immediate impact on the Tongan economy without jeopardizing debt sustainability, with other policy actions supporting macroeconomic resilience in the future by addressing sources of fiscal risk. Reform area 2 guards against the immediate impacts of employment losses in the private sector, which have been previously shown to be difficult to recover, as well as supporting vulnerable households. This reform area also supports the recovery from the COVID-19 crisis by strengthening public service management and expanding the labor supply into semi-skilled opportunities, as measured by the expansion of registered semi-skilled worker pools. This will mitigate the impacts of future economic shocks by diversifying sources of remitted income and increasing the financial capacity of households.
Impact

A more inclusive, sustainable, and dynamic knowledge-based economy promoted (Tonga Strategic Development Framework, 2015 2025)

More responsive good governance achieved (Tonga Strategic Development Framework, 2015 2025)

Adverse social and economic impact by the COVID-19 pandemic reduced. (ADB's Comprehensive Response to the COVID-19 Pandemic)

Project Outcome
Description of Outcome Maroeconomic resilience of Tonga endhanced
Progress Toward Outcome
Implementation Progress
Description of Project Outputs Sources of fiscal and PFM risk reduced.
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
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 Webb, James M.
Responsible ADB Department Pacific Department
Responsible ADB Division PASP
Executing Agencies
Ministry of Finance
Vuna Road
Nuku'alofa
Kingdom of Tonga
Timetable
Concept Clearance 15 Apr 2020
Fact Finding -
MRM 25 May 2020
Approval 25 Jun 2020
Last Review Mission -
Last PDS Update 25 Jun 2020

Grant 0709-TON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
25 Jun 2020 26 Jun 2020 26 Jun 2020 31 Jul 2020 - 28 Jul 2020
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 115.60 Cumulative Contract Awards
ADB 48.80 25 Jun 2020 12.20 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 66.80 25 Jun 2020 12.20 0.00 100%

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Related Publications

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Tenders

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Contracts Awarded

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Procurement Plan

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