The HEALS program is part of an integrated package of assistance by the Asian Development Bank (ADB) to FSM to support short-term efforts in mitigating the potential health consequences and socioeconomic impacts of the coronavirus disease (COVID-19) pandemic. It is aligned with the Pacific Approach's priority of managing risks and building economic resilience to protect the population from hardships; and the priority of directing ADB grant resources to the most vulnerable developing member countries. The FSM meets all of the access criteria of ADB's CPRO, which include sound macroeconomic management, undertaking key structural reforms, a pro-poor countercyclical expenditure program, and debt sustainability.
|Project Name||Health Expenditure and Livelihoods Support Program|
|Country||Micronesia, Federated States of
|Project Type / Modality of Assistance||Grant
|Source of Funding / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Gender Equity and Mainstreaming
Governance and capacity development
Private sector development
|Sector / Subsector||
Health / Disease control of communicable disease - Health system development
Public sector management / Economic affairs management - Public expenditure and fiscal management - Social protection initiatives
|Gender Equity and Mainstreaming||Effective gender mainstreaming|
|Description||The HEALS program is part of an integrated package of assistance by the Asian Development Bank (ADB) to FSM to support short-term efforts in mitigating the potential health consequences and socioeconomic impacts of the coronavirus disease (COVID-19) pandemic. It is aligned with the Pacific Approach's priority of managing risks and building economic resilience to protect the population from hardships; and the priority of directing ADB grant resources to the most vulnerable developing member countries. The FSM meets all of the access criteria of ADB's CPRO, which include sound macroeconomic management, undertaking key structural reforms, a pro-poor countercyclical expenditure program, and debt sustainability.|
|Project Rationale and Linkage to Country/Regional Strategy||
The FSM is a remote Pacific small island developing state encompassing 607 islands that are spread over the world's 14th largest geographic exclusive economic zone. It is a lower middle income island nation with a small population of 104,468 in 2018, of which approximately 45% live in Chuuk, 37% in Pohnpei, 11% in Yap, and 7% in Kosrae. The country is vulnerable to climate change, facing frequent natural hazards and rising sea levels. The public sector dominates the economy, with private economic activities focused mainly on subsistence farming and fishing, wholesale and retail trade, transportation, and tourism services. Less than 15% of the population was under formal employment in 2010, with significantly more people under the age of 15 (36%), outside of the labor force (27%) or in the subsistence sector (16%). In FY2018, the government and public enterprises account for 32% of gross domestic product (GDP), followed by households (26%), and private enterprises (19%), and financial institutions (16%). The FSM has one of the highest estimated rates of poverty in the Pacific with 41% of the population living below the poverty line and 10% below the food poverty line. The FSM was ranked 135th out of 189 countries by the United Nations Development Programme's human development index for 2019.
Despite the geographic isolation of the Pacific, the risk of COVID-19 transmission on vulnerable population remains high, with confirmed cases in Fiji and Papua New Guinea. As a small-island developing state, the FSM faces a set of distinct challenges to counter the pandemic and mitigate impacts such as having weak health infrastructure, a narrow economic base, geographically dispersed population, and a fragile environment that is already vulnerable to climate change. While the spread of COVID-19 has not reached the FSM with no confirmed cases to date, the projected health, economic, and social impacts of the COVID-19 pandemic are already significant.
Effective health preparedness and mitigation to COVID-19 ensured
Economic activities in FSM restored, with adverse impacts of COVID-19 to vulnerable segments mitigated
|Description of Outcome||Adverse effects of COVID-19 on citizens and businesses reduced|
|Progress Toward Outcome|
|Description of Project Outputs||
Measures to combat the entry and spread of COVID-19 in the FSM delivered
Measures to provide economic stimulus relief to businesses implemented
Measures to provide social protection to poor and vulnerable groups enhanced
|Status of Implementation Progress (Outputs, Activities, and Issues)|
|Summary of Environmental and Social Aspects|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design|
|During Project Implementation|
|Responsible ADB Officer||Romero-Torres, Jennifer|
|Responsible ADB Department||Pacific Department|
|Responsible ADB Division||PASP|
Asian Development Bank
6 ADB Avenue,
Mandaluyong City 1550, Philippines Department of Finance and Administration
Federated States of Micronesia
|Fact Finding||03 Aug 2020 to 07 Aug 2020|
|MRM||22 Sep 2020|
|Approval||12 Nov 2020|
|Last Review Mission||-|
|Last PDS Update||16 Nov 2020|
|Approval||Signing Date||Effectivity Date||Closing|
|12 Nov 2020||-||-||30 Sep 2021||-||-|
|Financing Plan||Grant Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||14.00||Cumulative Contract Awards|
|ADB||14.00||12 Nov 2020||0.00||0.00||0%|
|Cofinancing||0.00||12 Nov 2020||0.00||0.00||0%|
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|Title||Document Type||Document Date|
|Health Expenditure and Livelihoods Support Program: Report and Recommendation of the President||Reports and Recommendations of the President||Nov 2020|
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