THE WORLD BANK W O R L D B A N K O P E R A T I O N S E V A L U A T I O N D E P A R T M E N T 31627 Evaluation of World BankAssistance to Pacific Member Countries,1992­2002 OPERATIONS EVALUATION DEPARTMENT ENHANCING DEVELOPMENT EFFECTIVENESS THROUGH EXCELLENCE AND INDEPENDENCE IN EVALUATION The Operations Evaluation Department (OED) is an independent unit within theWorld Bank;it reports directly to the Bank's Board of Executive Directors.OED assesses what works,and what does not;how a borrower plans to run and maintain a project;and the lasting contribution of the Bank to a country's overall development.The goals of evaluation are to learn from experience, to provide an objective basis for assessing the results of the Bank's work,and to provide accountability in the achievement of its objectives.It also improves Bank work by identifying and disseminating the lessons learned from experience and by framing recommendations drawn from evaluation findings. W O R L D B A N K O P E R A T I O N S E V A L U A T I O N D E P A R T M E N T Evaluation of World Bank Assistance to Pacific Member Countries, 1992­2002 2005 The World Bank http://www.worldbank.org/oed Washington, D.C. © 2005 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: feedback@worldbank.org All rights reserved Manufactured in the United States of America First edition August 2005 The findings, interpretations, and conclusions expressed here are those of the author(s) and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments they represent. 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All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, World Bank, 1818 H Street, NW,Washington, DC 20433, USA, fax 202-522-2422, e-mail pubrights@worldbank.org. Cover photo © Caroline Penn/Panos Pictures.Wawela,Trobriand Islands, Papua New Guinea. Fishing for clams and sea urchins. ISBN-10: 0-8213-6284-4 ISBN-13: 978-0-8213-6284-6 e-ISBN: 0-8213-6285-2 DOI: 10.1596/978-0-8213-6284-6 Library of Congress Cataloging-in-Publication Data Evaluation of World Bank assistance to Pacific member countries 1992­2000 / Operations Evaluation Department. p. cm. Includes bibliographical references. ISBN 0-8213-6284-4 1.World Bank--Oceania--Evaluation. 2. Economic assistance­Oceania--Evaluation. 3. Economic development projects­Oceania--Evaluation. 4. Oceania--Economic conditions. I.World Bank. Operations Evaluation Dept. HG3881.5.W57E927 2005 338.91'0095--dc22 2005051153 Operations Evaluation Department Knowledge Programs and Evaluation Capacity World Bank InfoShop Development (OEDKE) E-mail: pic@worldbank.org E-mail: eline@worldbank.org Telephone: 202-458-4497 Facsimile: 202-522-3125 Printed on Recycled Paper Contents v Acknowledgments vii Foreword ix Executive Summary xiii Acronyms and Abbreviations 1 1 The Pacific Context 3 2 Economic and Social Development Progress since 1992 9 3 World Bank Assistance to the PMCs, 1992­2002 9 Objectives and Strategies 11 Lending Services 16 Nonlending Services 20 Partnerships 23 4 Development Outcome Assessment 23 Outcome: Moderately Unsatisfactory 24 Institutional Development Impact: Negligible 25 Sustainability: Unlikely 27 5 Contribution to Outcomes 27 Bank Performance 29 Client Performance 31 6 Findings and Recommendations 35 Annexes 36 Map of East Asia and Pacific Region 37 Annex A: Pacific Member Countries 39 Fiji 45 Kiribati 51 The Marshall Islands 55 Micronesia 61 Palau 65 Samoa i i i E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 71 The Solomon Islands 77 Tonga 83 Vanuatu 89 Annex B: Statistical Tables 105 Annex C: List of World Bank Activities in the Pacific Region, 1992­2003 109 Annex D: Selected World Bank Policy Recommendations to the Pacific Member Countries, 1992­2002 113 Annex E: List of People Interviewed 117 Annex F: Guide to OED's Country Evaluation Rating Methodology 121 Annex G: Comments from the Government of Fiji 123 Annex H: Management Action Record 125 Annex I: Chairman's Summary: Committee on Development Effectiveness 129 Endnotes 131 References Boxes 8 2.1 The U.S.Experience in the Compact Countries Underscores the Lesson that FinancialAid in Itself is Insufficient to Ensure Sustainable Economic Development 10 3.1 The"Small States Agenda"--An Overall Framework for Bank Assistance to the Pacific? 11 3.2 Several Distinct Types of Regional Assistance Strategies Exist 16 3.3 Themes of the World Bank's Regional Economic and Sector Reports, 1992­2002 33 6.1 Applying CDF Principles Going Forward Figures 12 3.1 World Bank Lending to the PMCs Was Significantly Lower than to Other Low-Population Countries Tables 2 1.1 The Nine Pacific Member Countries Are a Diverse Group 4 2.1 Per Capita Income Growth since 1992 Has Been Disappointing 5 2.2 Limited Access to Infrastructure Continues to Be a Constraint 5 2.3 Social Indicators Have Continued to Improve, Although Poor Conditions Persist in Parts of the Region 7 2.4 Other than Fiji, the PMCs Remain Highly Aid Dependent 13 3.1 Sector Distribution of Aid to the PMCs Has Tended toward the Social Sectors 15 3.2 Twenty Bank Lending Operations Were Active during 1992­2002 21 3.3 World Bank Lending Was a Small Proportion of Official Development Aid to the Pacific Region, 1992­2002 i v Acknowledgments T his Country Assistance Evaluation was Center for International Development) provided prepared byAsita De Silva (task manager) detailed comments. The report reflects com- under the direction of R.Kyle Peters,sen- ments received from the Country Department ior manager, OED Country Evaluation and Re- for the Pacific member countries. Danuta gional Relations. Gene Tidrick was the peer Danilova provided research assistance and Jan- reviewer for the report.Nicholas Hope (Stanford ice Joshi provided administrative support. Director-General, Operations Evaluation: Gregory K. Ingram Senior Manager, Country Evaluation and Regional Relations: R. Kyle Peters Task Manager: Asita De Silva v Foreword T his report is an evaluation of theWorld Bank's assistance to the Pacific Member Countries (PMCs) over the period 1992­2002.It follows a 1992 OED report that evaluated Bank assistance to the PMCs during the 1980s. The report primarily focuses on the five borrowing countries in the Region: Fiji, Samoa, the Solomon Islands,Tonga, and Vanuatu. The evaluation provides an independent as- management,client governments,and the major sessment of the role ofWorld Bank assistance dur- development partners in the Region.The report ing the period 1992­2002.Some references are will be made available to the general public. made to Bank activities both prior to 1992 and The basis for the CAE consists of project as- after 2002, where relevant.The Country Assis- sessments,sectoral reviews,and external literature. tance Evaluation (CAE) examines whether:(a) the Preparation of the report benefited from the in- objectives of Bank and International Develop- puts of numerous Bank staff who worked on the ment Association (IDA) assistance were rele- PMCs during the past decade.An OED mission vis- vant; (b) the Bank's assistance program was ited the Pacific Islands in May/June 2003, and effectively designed and consistent with its ob- views and information from current and former jectives;and (c) the Bank's program achieved its PMC government officials and representatives of objectives and had a substantial impact on the the private sector, nongovernmental organiza- country's development during this period. Ex- tions (NGOs),and other donors are also reflected amining these questions allows the CAE to draw in the report.A list of those interviewed is shown lessons and offer recommendations for future in Annex E. A draft report was sent to the Gov- Bank assistance.Annex F describes the method- ernments of the Pacific Islands for comments. ological approach. Only the Governments of Tonga and Fiji re- The principal intended audiences of the re- sponded.The Government ofTonga had no com- port are the Committee of Development Effec- ments;comments from the Government of Fiji are tiveness (CODE) of the Board of Directors,Bank attached as Annex G. v i i Executive Summary T he nine Pacific Member Countries (PMCs) of theWorld Bank Group are Fiji Islands,Kiribati,the Marshall Islands,the Federated States of Micronesia, Palau, Samoa, the Solomon Islands,Tonga, and Vanuatu. The PMCs are a diverse group of countries, The relatively high standards of living were attrib- scattered over a large expanse of the Pacific uted to substantial external aid targeted at the Ocean, with the two most distant points social sectors,"affluent"subsistence systems, and some 6,000 miles apart.There are wide differ- large inflows of worker remittances in some ences in their income levels, natural resource PMCs. A consensus emerged during the 1990s endowments, colonial heritages, cultures and that the challenge facing the PMCs was to move customs,and degrees of social cohesion.No two away from the public sector-driven growth strate- countries have common land borders, and to gies of the past and stimulate and diversify their date, only limited economic integration and productive sectors in order to reduce depend- political cohesion exists among them.In varying ence on external aid, increase resilience to degrees, the PMCs face a range of development shocks, and meet the rising expectations of their constraints common to small island states, people. including small domestic markets; vulnerability Between 1992 and 2002, good progress to external economic and natural shocks, and was made in sustaining improvements in the high costs of social and economic infrastructure social sectors. However, economic growth was provision. At the same time, the PMCs offer disappointing and well below East Asia and the promise of sustainable economic growth and Pacific (EAP) Region and lower-middle income improvements in living standards. Potential (LMI) averages. Significant income poverty and sources of growth include greater returns and poor social conditions persist in parts of the value-added to vast fisheries and other oceanic region. Aid dependence and vulnerability to resources; tourism; small-scale cash crops, and external economic shocks remain high.Within light processing activities. the PMCs, there were significant differences This evaluation covers Bank assistance to in progress, with Samoa and Fiji making the the PMCs since 1992, when the last OED review most progress toward establishing environ- was completed. By the beginning of the 1990s, ments conducive to private sector-led economic many of the PMCs had achieved social indi- growth. Even in these countries, however, cators comparable to those of middle-income economic growth remains fragile and significant countries. However, none had seen significant parts of the population do not participate in per capita income growth over the prior decade. it or see the benefits. The need to generate i x E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 sustainable and participatory economic growth knowledge provider was undermined by a lack in the PMCs is becoming increasingly urgent, of country-specific analysis and operationally with growing ranks of urban unemployed, useful recommendations,infrequent interaction, exhaustion of some natural resources, and and a lack of follow-up with the PMCs to help weakening of some traditional support systems. implement recommendations,and weak relations Progress has been limited by the challenging with other donors through which the Bank context in the Pacific. Along with the challenges might have helped further implementation of its facing any small-island nation,some PMCs,partic- policy recommendations. ularly those in Melanesia, are still wrestling with During the second period (1998­2002), the nation-building issues; some social and cultural Bank improved its relations with both the PMCs practices are not fully conducive to market- and other donors (particularly after the CD oriented activity, and political instability in moved to Sydney); continued providing sound countries such as Fiji and the Solomon Islands analytical work; and undertook some effective continue to impede progress.In addition,signifi- lending in economic infrastructure. During this cant governance and economic management period, the Bank also enhanced its lending in shortcomings in some PMCs have resulted in the the social sectors.While the Bank's analytical persistence of poor policy and institutional and project work in health and education environments,poor management of external aid, proved useful, both directly to the PMCs and to and ineffective programs from other donors. other donors, OED questions the rationale of The World Bank has had a small resource continued Bank lending in the social sectors transfer role in the region, accounting for just given the high availability of grant funding, the 2 percent of official aid disbursements since significant presence of other donors in these 1992. With the exception of a 1993 country sectors, and the need for the Bank to be highly assistance strategy for the Solomon Islands, the selective in its activities in the PMCs. Bank did not produce formal assistance strate- Throughout the decade,the Bank's assistance gies for the PMCs until 2000. Between 1992 and was weakened by a lack of specific country or 1997, the Bank adopted a minimalist approach, sector-level objectives, which led to a focus on which included analytical and advisory services inputs rather than outcomes, and a diffusion of under a biannual Regional Economic Report, both its lending and non-lending work across too complemented by some "demand-driven" tech- wide a range of sectors and themes when it nical assistance. Just two Bank loans were might have been more effective to concentrate approved during this period. After 1998, in on a few key objectives.In addition,the Bank was response to consistent requests from PMCs and not engaged in helping design or implement bilateral donors for a greater Bank presence, the policy reforms in any of the PMCs other than in Bank increased its lending activities,and in 2000, the Solomon Islands, despite the need for such a Pacific Regional Strategy was presented to the reforms to strengthen public sector management Board. A further seven loans were approved and improve the environment for private sector during this period in transport, telecommunica- growth in at least seven of the nine countries. tion,health and education,as well as an adjustment Finally, the Bank's activities in the Pacific loan to the Solomon Islands.Total new lending received less funding than activities in other commitments since 1992 have amounted to low-population countries. This undermined US$77 million.In 2000,the country director (CD) implementation and effectiveness by inhibiting for the PMCs was relocated to Sydney, Australia. development of relationships with countries and During the first period under review other donors, limiting the number of staff (1992­1997), the Bank produced some high- allocated to the region,and preventing adequate quality analytical work that helped generate a follow-through on interventions. broad consensus around what needs to be done For these reasons, the Bank did not have a in the region to improve economic management substantial impact on the central objective and growth. However, the Bank's role as a facing the PMCs during the decade--that of x E X E C U T I V E S U M M A R Y stimulating higher and more participatory ment impact of aid flows, and (b) remov- economic growth. The outcome of Bank ing policy and institutional impediments to assistance to the PMCs over the past decade is private activity to enable growth and more rated as moderately unsatisfactory, institu- participation in the key productive sec- tional development impact as negligible, and tors of the PMCs. sustainability as unlikely. · Define a specific set of objectives, a cor- The present challenge for the Bank is to responding level of engagement,and a set identify its objectives, an appropriate level of of lending and non-lending options par- engagement in each PMC, and cost-effective ticular to each country within this regional instruments for its assistance.The experience framework. of the PMCs indicates that their key develop- · Prioritize support to complement country- ment constraint is not the availability of level objectives with a highly select set of financial aid but rather the policies and institu- regional-level interventions, such as sup- tions that govern private investment and the port in the fisheries sector, in air and sea capacity to utilize public funds effectively.OED transport industries,and in preparing to re- recommends that the Bank: spond to natural disaster. · Broaden and deepen its collaboration with · Developaregionalengagementframework other large bilateral and multilateral donors focused around a few select thematic/ in the region. sectoral objectives.OED's view is that these · Ensure that its strategy in the Pacific is objectives should include:(a) rationalizing adequately funded and staffed in order to public expenditure policies and programs, meet its results objectives beyond the de- which would allow the PMCs themselves livery of outputs. to be more proactive in ensuring optimal allocations and enhancing the develop- Gregory K. Ingram Director-General, Operations Evaluation x i Acronyms and Abbreviations AAA Analytical and advisory activities ADB Asian Development Bank AusAID Australian Agency for International Development CAE Country Assistance Evaluation CAS Country Assistance Strategy CDF Comprehensive Development Framework CEM Country Economic Memorandum CODE Committee on Development Effectiveness CPIA Country Policy and Institutional Assessment DAC Development Assistance Committee of OECD EAP East Asia and the Pacific Region (World Bank) EEC European Economic Community ESW Economic and sector work FIAS Foreign Investment Advisory Service GDP Gross domestic product GNI Gross national income GNP Gross national product ICR Implementation Completion Report ID Institutional development IDA International Development Association IFC International Finance Corporation IMF International Monetary Fund LAC Latin America and the Caribbean Region (World Bank) LICUS Low-Income Countries under Stress LMI Lower-middle income LPC Low-population countries MIGA Multilateral Investment Guarantee Agency NGO Nongovernmental organization ODA Official Development Assistance OECD Organization for Economic Cooperation and Development OED Operations Evaluation Department PAR Performance Audit Report PBD Planning and Budgeting Department x i i i E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 PMC Pacific Member Country PWD Public Works Department PRS Pacific Regional Strategy RER Regional Economic Report SAC Structural Adjustment Credit SPPF South Pacific Project Facility TA Technical assistance UNDP United Nations Development Program x i v T H E P R S P I N I T I AT I V E : O B J E C T I V E S A N D R E L E VA N C E Telephone: 202-458-5454 Facsimile: 202-522-1500 x v 1 The Pacific Context T he Pacific Member Countries are a diverse group,with limited economic linkages and political cohesion.The nine Pacific Mem- ber Countries (PMCs) of theWorld Bank Group are Fiji,Kiribati, the Marshall Islands, Federated States of Micronesia, Palau, Samoa, the Solomon Islands,Tonga,andVanuatu. The PMCs are not a homogenous group. ties as well.With varying degrees, a range of T he Pacific They differ widely in their population sizes, common development constraints, typical Member income levels,customs and cultures,natural to small island nations,face the PMCs.2These Countries are a resource endowments, physical attributes, include vast distances within the PMCs, diverse group, colonial heritages, languages, degrees of between them, and to world markets; small with limited social cohesion, and economic and social and dispersed local markets;vulnerability to policies (see table 1.1).The total population external economic and natural shocks and economic of 2.1 million people is scattered across a to environmental change; high costs for linkages and vast area of the Pacific Ocean.1 No two social and economic infrastructure; and political countries have common land borders, and cultural attributes that,at times,may discour-cohesion. to date only limited economic integration age market-oriented activity. Good potential and political cohesion exists among them. nevertheless exists for sustainable economic The PMCs are relatively young nations,with and social development. Among the PMCs' the average time since independence being natural endowments are extensive oceanic just 27 years.Many PMCs have faced consid- resources, including fisheries and untapped erable nation-building tasks following seabed minerals; fertile land and favorable independence, and political instability climates for agricultural production; attrac- continues to be a debilitating factor in some tive sites for tourism development; and countries. Most of the PMCs have retained some natural resources (such as gold in Fiji Although they strong traditional cultural systems, and in and forests in the Solomon Islands).While face formidable some cases, integrating traditional ways the PMCs are often referred to as "small development with modern ways of life has proved a island developing states," according to one constraints, difficult and traumatic challenge. observer they may also be seen as "large the PMCs have ocean developing states."3 Widespread opportunities Although they face formidable develop- subsistence production along with strong ment constraints, the PMCs have opportuni- social support systems have helped prevent as well. 1 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 T h e N i n e P a c i f i c M e m b e r C o u n t r i e s T a b l e 1 . 1 A r e a D i v e r s e G r o u p GNI per Sea Population Year capita, Land area No. of Main density Year of joined 2003 Population, area ('000 No. of lan- population (per independence Bank Country (US$) 2003 (`000) (km2) km2) islands guages group sq. km.) (from) Group Fiji 2,360 835 18,270 1,290 332 10 Melanesian/ 45 1970 (UK) 1971 Polynesian/ Indo-Fijian Kiribati 880 96 730 3,550 34 2 Micronesian 127 1979 (UK) 1986 The Marshall 2,710 53 181 2,131 1,225 2 Micronesian 315 1979 (USA) 1992 Islands Micronesia 2,090 125 701 2,780 607 17 Micronesian 155 1979 (USA) 1993 Palau 7,500 20 460 629 200 4 Micronesian 42 1994 (USA) 1997 Samoa 1,600 178 2,830 120 8 2 Polynesian 61 1962 (NZ) 1974 The Solomon 600 457 27,990 1,340 992 74 Melanesian 15 1978 (UK) 1978 Islands Tonga 1,490 102 720 700 170 4 Polynesian 140 1974 (UK) 1985 Vanuatu 1,180 210 12,190 680 80 110 Melanesian 17 1980 (UK/France) 1981 Totals 2,076 64,072 13,220 3,648 225 Source: World Bank, ADB, UNDP. the occurrence of absolute poverty in the each other are relatively weak. Geograph- PMCs. ical proximity and similar development Treatment of constraints do not provide a good basis Treatment of the PMCs as a common for a single common strategy for all PMCs, the PMCs as group has its limitations. The political, nor for a regional integration assistance a common social, and economic circumstances vary strategy. This fundamental limitation group has its considerably across the PMCs.Their histor- should be kept in mind in evaluating the limitations. ical ties and natural economic links with Bank's program. 2 2 Economic and Social Development Progress since 1992 T he challenge over the past decade has been to stimulate economic growth. By the early 1990s,many of the PMCs had achieved so- cial indicators comparable to those of middle-income countries. However,despite high public investment rates,good human capital,rel- atively favorable natural resource endowments,and macroeconomic sta- bility in the 1980s,they had seen virtually no per capita income growth. The relatively high social indicators were ing and integrating traditional cultures and The challenge attributed to "affluent" subsistence systems; systems rather than replacing them. over the past large inflows of worker remittances; and The goal of stimulating economic decade has high levels of external aid that supported growth was not realized in the 1990s. been to large public investments in the social sectors. Economic growth in each of the PMCs from stimulate A broad consensus emerged in the region 1992 to 2003 remained modest and was that the public-sector-led growth strategies below the East Asia and the Pacific (EAP) economic of the past had to yield to policies to Region and lower-middle-income (LMI) growth. stimulate and diversify the PMCs'productive country averages (table 2.1). Per capita sectors in order to:(i) reduce dependence on income growth stagnated or declined in five continuous aid flows; (ii) increase resilience of the nine PMCs. The region's major to external shocks; (iii) reduce pressure on productive activities and their returns land arising from rapid population growth, continued to be well below their potential. The goal of and (iv) meet the rising expectations of the In fisheries, for example, of the US$2 billionstimulating people. Key growth sectors were expected in tuna extracted from the Pacific each year, economic to be commercial fisheries, agricultural just 3 percent accrues to Pacific countries in growth was crops, tourism, small-scale manufacturing, royalties and license fees.4 Local ownership and some natural resource extraction. An of vessels is limited, with foreign ships not realized in underlying emphasis was placed on preserv- accounting for more than 90 percent of the the 1990s. 3 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 market-oriented and private-sector-driven P e r C a p i t a I n c o m e growth (although the environment in Fiji G r o w t h S i n c e T a b l e 2 . 1 has been undermined by political instabil- 1 9 9 2 H a s B e e n ity,public sector inefficiencies,and periodic D i s a p p o i n t i n g lapses in fiscal discipline).As discussed in GDP growth rate, GDP per capita the Country Annexes, reforms in these 1992­2003 growth rate, 1992­2003 countries contributed to higher growth (annual average) (annual average) rates. Even in these economies, however, Fiji 3.2 2.0 growth remains fragile and many people Kiribati 4.1 1.8 still do not participate in or see the benefits The Marshall Islands ­0.5 ­1.7 of economic growth. A range of policy Micronesia 0.9 ­1.1 and institutional constraints continue to Palau 1.4 0.5 inhibit both small and larger-scale private Samoa 4.1 3.4 sector activity in the region.These include: The Solomon Islands 0.3 ­2.4 (i) limited access to economic infrastruc- ture and services, especially outside urban Tonga 2.3 2.0 areas and in outer islands (see table 2.2); Vanuatu 2.4 ­0.4 (ii) complex land-ownership regimes; EAP average 7.5 6.3 (iii) regulatory controls, tax and tariff LMI average 3.4 2.3 regimes, and other policy distortions that Source: World Bank, WDI 2004. inhibit market signals;(iv) poor competitive environments caused by public monopolies Good policy catch. With little local processing taking in commercial areas; and (v) inefficient and place, the PMCs do not share in the public utility, shipping, and air transport additional US$2­4 billion in value added to industries. institutional the tuna during processing and distribution. performance In tourism, all nine PMCs together received Progress in improving social indicators remain the less than 600,000 tourists in 2000,compared was sustained, although income-earning exception rather with 465,000 received in the Maldives alone opportunities remain low. Several key than the rule. (a country with a population of 280,000),or social indicators continued to improve in less than 10 percent of tourist arrivals in the 1990s (table 2.3). Life expectancy Hawaii. Agricultural exports continue to increased in most PMCs, and ranges from comprise a narrow range of raw commodi- 63 years in Kiribati to 71 years in Tonga, ties,with only limited agro-processing taking compared with an EAP regional average of place in most PMCs. 69 years. Other than in Kiribati and the Marshall Islands, infant mortality is at or Good policy and institutional perform- below the average for LMIs.Adult literacy ance remain the exception rather than the rose in most PMCs, although it stagnated in rule. Of the five PMCs whose performance the Solomon Islands and Vanuatu, where ratings are available (Kiribati, Samoa, the less than 35 percent of adults are literate.5 Progress in Solomon Islands, Tonga, and Vanuatu), In some PMCs, such as Tonga and Samoa, improving Samoa ranks in the top quintile among all access to basic social services is nearly social indicators International Development Association universal. In others, however, less than half was sustained, (IDA) borrowers in the Country Perfor- the population has access to improved mance Ratings (CPIA), while the other four water sources,and at least 20 percent of the although are in the bottom two quintiles. During the people lack access to any health care income-earning decade, Fiji and Samoa made the most services in several PMCs. Poverty remains opportunities progress toward establishing policy frame- an issue throughout the region.According remain low. works and infrastructure conducive to to Asian Development Bank (ADB) 4 E C O N O M I C A N D S O C I A L D E V E L O P M E N T P R O G R E S S S I N C E 1 9 9 2 L i m i t e d A c c e s s t o I n f r a s t r u c t u r e T a b l e 2 . 2 C o n t i n u e s t o B e a C o n s t r a i n t Fixed and mobile phone Personal Internet Paved subscribers computers per users roads (%) per 1,000 1,000 people (thousands) (1995­2000) people (2001) (2001) (2001) Fiji 49.2 211 60.9 15 Kiribati -- 48 23.2 2 The Marshall Islands -- 67 50 1 Micronesia 17.5 -- -- 5 Palau -- -- -- -- Samoa 42 82 6.7 3 The Solomon Islands 2.5 21 50.9 2 Tonga 27 112 -- 3 Vanuatu 23.9 35 -- 6 Maldives -- 168 21.9 10 Mauritius 97 509 109.1 158 Belize 17 305 135.2 18 LMI average 53 246 25.5 Source: World Bank, 2003. S o c i a l I n d i c a t o r s H a v e C o n t i n u e d t o T a b l e 2 . 3 I m p r o v e , A l t h o u g h P o o r C o n d i t i o n s P e r s i s t i n P a r t s o f t h e R e g i o n Access to improved Life expectancy Adult literacy Infant mortality water source at birth (years) (% of population) (per 1,000 live births) (% of population) Early Early Early Early Early Early Early Early 1990s 2000s 1990s 2000s 1990s 2000s 1990s 2000s Fiji 66 69 89 94 23 18 47 Kiribati 58 63 90 93 62 51 48 The Marshall Islands 69 65 91 97 61 37 14 Micronesia 65 67 72 24 20 41 Palau 67 68 92 27 17 79 Samoa 68 69 98 99 25 20 69 91 The Solomon Islands 65 69 30 30 27 20 61 71 Tonga 70 71 99 99 24 17 96 100 Vanuatu 65 68 34 48 34 44 EAP 68 69 81 87 42 34 71 76 LMI 68 69 82 87 41 33 75 81 Source: World Bank; ADB; UNDP; government reports. 5 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 estimates, 50 percent of the population in from 1.7 to 3.6 months, compared with Kiribati lives in poverty, 40 percent in 6.7 months in EAP and 6.9 months in LMI Micronesia and Vanuatu, 30 percent in Fiji, countries. and 20 percent in the Marshall Islands.6 Significant rural (outer-island)/urban Other than in Fiji, dependence on imbalances exist in many of the PMCs, with external aid remains high. Official aid to infrastructure quality, access to publicly the PMCs during the decade remained provided services, and economic opportu- high, with annual gross disbursements nities dropping significantly outside urban averaging US$243 per capita, compared centers.Up to 80 percent of the population with US$165 to low-population countries in the the Solomon Islands and Vanuatu (LPCs) in Africa and US$210 per capita to remains entirely outside the formal econ- LPCs in Latin America and the Caribbean omy, relying on subsistence production for (LAC).8 Aid levels within the PMCs varied its livelihood. Limited formal employment considerably, however. The U.S. Compact opportunities have led to high levels of countries9 were the most heavily depen- emigration among the Polynesian countries. dent on aid, with gross flows between For example, as many Tongans live outside 1992 and 2002 accounting for more than the country as within it. 40 percent of annual gross national income (GNI). Fiji, the least dependent, received The region's The region's economies continued to aid accounting for just 2 percent of GNI, economies be significantly affected by external natural the lowest proportion of all 25 LPCs and economic shocks. The cost of cyclones worldwide. In the rest of the PMCs, aid continued to be and other natural disasters in the region ranged between 18 and 21 percent of GNI, significantly exceeded some US$1 billion in the 1990s and above the overall average for all LPCs.With affected placed significant strains on individual the bulk of aid coming in as grants and by external economies.7The 1992 CycloneVal in Samoa, concessional finance, debt service levels natural and for example, caused damages estimated at have remained manageable (ranging economic 82 percent of Samoa's GDP that year.The between 1 and 6 percent of exports). Fiji, shocks. low-lying atoll PMCs are increasingly vulner- which has received limited grant assis- able to climate change and rising sea levels. tance, deliberately pre-paid its external According to Bank staff estimates, severe debt during the decade, reducing it to inundations could cause annual damage of 11 percent of GDP in 2002,compared with Other than in up to 35 percent of Kiribati's 1998 GDP by an LMI average of 41 percent. Samoa's Fiji, dependence 2050.Vulnerabilities associated with depen- external debt, on the other hand, has risen on external aid dence on a few commodity exports also to nearly 60 percent of GNI in present remains high. remained high. In the the Solomon Islands, value terms, with debt service exceeding a large drop in GDP followed the collapse 10 percent of exports in recent years. of timber prices in 1997. In Samoa, the taro leaf blight epidemic in 1994 virtually Despite its high levels,there is dissatisfac- Despite its high eliminated production of taro, which tion about the impact of donor aid on levels, there is previously had accounted for 50 percent sustainable development in the Pacific.At dissatisfaction of Samoa's exports.Efforts to mitigate vulner- present, there is broad dissatisfaction with about the ability to external shocks by building levels the role of aid in developing self-sustaining of reserves above prudential norms have economies in the region.While systematic impact of yet to be successful. Aside from Samoa, impact assessments remain to be done, a donor aid on which managed to maintain average interna- number of reviews point to the existence sustainable tional reserves equivalent to 5.5 months of of large public sectors, overvalued development imports,average reserves among the borrow- exchange rates, high prices, high wages, in the Pacific. ing PMCs during the past decade ranged corruption, poor infrastructure, and weak 6 E C O N O M I C A N D S O C I A L D E V E L O P M E N T P R O G R E S S S I N C E 1 9 9 2 O t h e r T h a n F i j i , t h e P M C s R e m a i n H i g h l y T a b l e 2 . 4 A i d D e p e n d e n t ( g r o s s a i d d i s b u r s e m e n t s , a n n u a l a v e r a g e , 1 9 9 2 ­ 2 0 0 2 ) Aid as a Aid per capita, World Bank aid as a % of GNI (US$) percentage of total Fiji 3 68 6 Kiribati 21 194 0 The Marshall Islands 51 1,124 0 Micronesia 43 883 0 Palau 74 1,727 0 Samoa 19 238 6 The Solomon Islands 18 138 5 Tonga 19 297 0 Vanuatu 18 211 1 Average EAP LPCs (excluding Fiji) 28 368 1.4 Average 5 PMC borrowers (unweighted) 15 190 3.6 Average AFR LPCs 20 165 8 Average LAC LPCs 12 211 8 Average SAR LPCs 14 105 5 Average all LPCs 14 190 6 Sources: WDI August 2003; OECD database as of 6 Feb 2004 (www1.oecd.org). Official Development Finance (ODF): Used in measuring the inflow of resources to recipient countries includes: (a) bilateral ODA, (b) grants and concessional and non-concessional development lending by multilateral financial institutions, and (c) other official flows for development purposes (including refinancing loans), which have too low a grant element (q.v.) to qualify as ODA. LPC: Low-population countries are member states of the World Bank with pop- ulations of less than 1 million people. capacity in governments as consequences alternative proposed was for aid to be of high levels of ineffectively utilized aid. spent only on "mutually agreed develop- The ADB has been involved in policy-based ment projects and programs designed and operations in nearly all the PMCs, includ- monitored by teams nominated by the ing the U.S.Compact Micronesian countries, sovereign recipients and donors." since the mid-1990s.A 1999 evaluation of these programs found that progress had Other views, however, emphasize the Other views, been difficult and slow and that the results positive impact aid has had on the transi- however, attained were much less than desired.10 A tion to independent nationhood and in emphasize the 2000 U.S. government report found that improving social indicators. At the same positive impact "U.S. funds to two Micronesian countries time, positive impacts of external aid can aid has had on had little impact on economic develop- be discerned.AusAID, for example, argues ment" (see box 2.1).Another review of aid that the situation in the Pacific "would be the transition in the Pacific in 2003 argued that aid has far worse" without its ongoing assistance.12 to independent been spent on consumption rather than It suggests that AusAID assistance has nationhood investment; undercut private sector supported improving social indicators, and in development, employment and growth; the legitimacy of national governments, improving and led to corruption.11 It suggested that a and the viability of Pacific countries as social "harsh" but effective step might be for democratic nations.Similarly,the U.S.Depart- Australia to suspend all its aid and thus ment of the Interior (which administers U.S. indicators. provide a catalyst for change. A "softer" Compact aid) argues that U.S. aid helped 7 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 T h e U . S . E x p e r i e n c e i n t h e C o m p a c t C o u n t r i e s U n d e r s c o r e s t h e L e s s o n t h a t B o x 2 . 1 F i n a n c i a l A i d i n I t s e l f i s I n s u f f i c i e n t t o E n s u r e S u s t a i n a b l e E c o n o m i c D e v e l o p m e n t In 2000, the U.S. General Accounting Office produced an as- sufficiency at current living standards remains a distant goal for sessment of the impact U.S. assistance was having in the fed- the FSM and the RMI." erated states of Micronesia and the Republic of the Marshall Among the lessons drawn by the report were that (i) Compact Islands. It found that although $1.6 billion in Compact funds had funds were spent without planning or were misused as either been spent between 1987 and 1998, there had been "little im- bad public commercial investments or for maintenance of large provement in economic development" in the two countries. Key public sectors; (ii) many projects failed because the countries findings were that significant investments in infrastructure had did not conduct cost-benefit or feasibility analyses or plan for not led to economic growth; per capita incomes had stagnated local environmental conditions or maintenance needs; (iii) coun- in Micronesia and declined in the Marshall Islands, and Com- tries were insufficiently accountable for effective use of the pact funds had helped maintain high government wages and high funds; and (iv) persistent project implementation problems levels of public employment that discouraged private sector demonstrated a lack of adequate local skills and experience in growth. The report concluded that both countries remain highly managing projects and large budgets. dependent on U.S. assistance and that "economic self- Source: U.S. General Accounting Office, Report to Congressional Requesters, "U.S. Funds to Two Micronesian Nations Had Little Impact on Economic Development," GAO/NSIAD-00-216, September 2000. secure self-government in the Compact reducing dependence on aid, and improv- countries after four decades of trusteeship ing the quality of life, the need to advance and that they otherwise "could not have the PMC's development objectives is succeeded as political entities." It further becoming increasingly urgent. High levels emphasizes the short histories of the of rural-urban migration are straining urban countries since independence, the nation- infrastructure and services, causing deterio- building tasks they face, and the difficult rating living conditions, and threatening economic development position they the environment.Uncontrolled exploitation started from as factors that should condition of some natural resources, such as forests any assessment of economic development in the Solomon Islands and some fish progress. It is also clear that some countries species,risks exhausting them.With reports in the Pacific have been more effective than of tuna stocks in the Indian and Atlantic others in utilizing financial aid. Samoa, for Oceans depleting, increasing pressure on example, has translated high levels of aid Pacific tuna resources is expected as the into infrastructure development, human world's fishing fleets move that way. The need to capital development, and policy and institu- There are signs of weakening in traditional advance tional reforms.This is consistent with the support systems that in the past have sustainable Bank's worldwide experience that financial prevented absolute poverty and hardship.13 economic aid is only effective in the presence of good Education systems are producing young growth in the policies. people with high expectations who then find limited formal sector opportunities, PMCs is The need to advance sustainable eco- forcing them to return to subsistence living becoming nomic growth in the PMCs is becoming (for which they are less prepared),emigrate increasingly increasingly urgent.With only limited prog- if so able, or join the growing ranks of the urgent. ress in generating self-sustaining growth, urban unemployed. 8 3 World Bank Assistance to the PMCs, 1992­2002 Objectives and Strategies T he 1992 OED evaluation found that the Bank was generally unable to make an effective contribution to the development of the PMCs during most of the 1980s. Between 1980 and 1992, the Bank had a in the PMCs. In response, the Region stated formal collaborative agreement with ADB, that it was re-assessing its strategy,with three under which the Bank cofinanced projects factors likely to play an important role: that were appraised and supervised by direct, but limited, lending; an enhanced ADB. The Bank also undertook country- program of economic and sector work to specific economic and sector work (ESW). underpin policy dialogue with member The 1992 OED evaluation found that while countries, and the creation of an effective the cofinancing arrangement generated aid coordination mechanism. administrative savings to the Bank, lending operations were not underpinned by Between 1992 and 2000, the Bank Between 1992 appropriate country strategies and ESW, operated without a formal strategy for the and 2000, the and were generally ineffective.The Bank's PMCs. Despite the indication by manage- Bank operated secondary role, moreover, led to weak ment that a strategy was being developed, without a relationships with countries in the region. no regional strategy for the PMCs was formal strategy The evaluation recommended a limited, presented to the Board until fiscal 2000. focused lending program for the Bank A Country Assistance Strategy for the for the PMCs. in the region. It also suggested that the Solomon Islands was presented in 1993, Bank's major role should be to help the identifying the Bank's objectives in the countries prepare and implement appropri- country as:(i) policy dialogue for macroeco- ate development strategies. Two options nomic stabilization and structural reforms; were proposed: (a) continue with the (ii) a limited lending program in education current financing arrangement with ADB and health; and (iii) assistance to develop a and expand it to cover ESW or (b) maintain sustainable forestry regime.The Bank did the Bank's ESW and lend directly for projects not formally identify any other objectives or 9 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 strategies for the PMCs. Based on internal 1997, in response to consistent requests correspondence, the Bank's implicit from PMCs and bilateral donors, the Bank objectives in the Pacific during this period increased its lending and ESW activities. As were to (i) provide policy advice and assist part of a Bank-wide reorganization, a countries in formulating and implementing country department for the PMCs and Papua development strategies; (ii) focus invest- New Guinea was created in 1997.14 In 2000, ment lending on the education sector, this unit was relocated to Sydney,Australia where ADB was inactive; and (iii) act as to help develop closer relationships with "lender of last resort" in the region. An clients and donors in the region. Also in underlying principle was to contain costs 2000, a Pacific Regional Strategy (PRS) and minimize duplication with other was presented to the Board.This strategy donors, while still providing"some service" defined the Bank's overall goal in the Pacific to the PMCs. The Bank's comparative as "helping develop the human capital, advantage was determined to lie in helping policies, institutions, and infrastructure develop and implement development needed to bring about equitable,sustainable strategies.The biannual Regional Economic growth and higher living standards." Bank Report (RER) would remain the main objectives under the strategy were identi- vehicle for policy advice and dialogue, fied as: (i) helping promote the small states complemented by regional sector reports agenda (see box 3.1); (ii) developing a The Bank and"demand-driven"technical assistance.In focused and innovative lending program; increased its an informal agreement,ADB would provide (iii) producing more responsive regional and lending country-specific analytical work.In lending, country-based economic and sector work; activities after the Bank ended its agreement with ADB in and (iv) fostering country-driven aid coordi- 1997 and a favor of a more direct role in project nation. Areas identified for Bank lending lending. were health and education; transport and Pacific Regional telecommunication infrastructure; environ- Strategy was The Bank increased its lending activities ment and natural resource management; presented to the after 1997 and a Pacific Regional Strategy and support for economic policy reform. Board in 2000. was presented to the Board in 2000. After No further country-specific or sector- T h e " S m a l l S t a t e s A g e n d a " -- A n O v e r a l l B o x 3 . 1 F r a m e w o r k f o r B a n k A s s i s t a n c e t o t h e P a c i f i c ? Following the 1994 Declaration of Barbados, the international the benefit of small states; (vi) lowering the cost of natural dis- community defined an agenda for the sustainable development asters and improving risk management; (vii) protecting the phys- of small island nations. This agenda was endorsed at the 22nd ical environment; and (viii) accumulating and sharing knowledge Special Session of the U.N. General Assembly in 1999 and its im- on small states. The small states framework placed increased plementation is included in the Millennium Development Goals attention on the Bank's activities in the small states. As the task (Target 14). In 2000, a joint task force of the Commonwealth Sec- force report recognized, not all of these objectives are relevant retariat/World Bank defined a framework for World Bank as- to the same degree for all small states. The focus on regional ap- sistance to small states as: (i) focusing on poverty reduction; proaches and regional institutions is less applicable to the PMCs (ii) reducing transaction costs and partnering with other donors; than in the Caribbean and the Africa regions, because of the (iii) supporting private sector development; (iv) supporting re- lack of effective regional cohesion in the Pacific area. gional initiatives; (v) helping exploit information technology to Source: "Small States: Meeting Challenges in the Global Economy," Report of the Commonwealth Secretariat/World Bank Joint Task Force on Small States, April 2000. 1 0 W O R L D B A N K A S S I S TA N C E T O T H E P M C s , 1 9 9 2 ­ 2 0 0 2 specific objectives were identified in the donors; or how the Bank program was Bank activities PRS. Throughout the decade, the Bank adjusted as a result. Finally, the small states in the PMCs maintained a flexible IDA graduation policy agenda is diffuse and provides little lacked a for five of the nine PMCs, enabling them concrete guidance to the Bank's activities strategic to borrow on IDA terms despite relatively in the PMCs, and its regional aspects are higher incomes.15 framework of less relevance to the Pacific Islands. The PRS fell short of being a viable, coherent and country Bank activities in the PMCs lacked a assistance strategy in that it was not a or sector-wide strategic framework and country or sector- regional integration strategy, nor a compila- objectives wide objectives for more than a decade. In tion of individual country strategies, nor a for more than retrospect,the Bank never clearly adopted a presentation of a common set of objectives a decade. set of objectives on either a country-wide and strategies for all the PMCs (see box 3.2). or sector-wide basis during the decade. As a result, the Bank's program lacked focus and Lending Services measurable goals and, in turn, its relevance The Bank had a minimal resource transfer and effectiveness are difficult to assess. role during the decade.Total new commit- Internal communications and the 2000 ments to all PMCs from 1992 to 2002 regional strategy focused almost exclusively amounted to US$77 million, representing on instruments, such as "innovative lend- 4 percent of total official commitments to the ing," "responsive ESW," or "lender of last PMCs during the decade. This included two resort,"but never defined a set of objectives projects totaling US$32 million approved The Bank had toward which the instruments would be between 1992 and 1997, and seven projects a minimal deployed. While the strategy documents worth US$45 million approved between resource acknowledged the large flows of assistance 1998 and 2002. The level of lending was transfer role from other donors, they did not identify considerably lower than Bank lending to what countries, sectors, or activities they other low-population countries (LPCs).16 during the were flowing into; the objectives of other Bank disbursements to the PMCs between decade. S e v e r a l D i s t i n c t T y p e s o f R e g i o n a l B o x 3 . 2 A s s i s t a n c e S t r a t e g i e s E x i s t A synthesis of individual country assistance strategies. The have focused exclusively on Bank assistance to support Asian Development Bank in 1996 and again in 2000 issued a "Pa- Regional integration. As stated in the RIAS for West Africa, cific Strategy" in which it identified its broad goals in the Pa- "[the RIAS] is not about the Bank's assistance to West Africa. cific. Within this framework, Country Strategy Papers and It is neither a sum nor a synthesis of Country Assistance Country Assistance Plans were prepared for each member coun- Strategies. As such, it looks less at problems that are common try, specifying ADB's support for policy reforms, sectoral in- to all countries than at problems whose solution lies in a vestment programs, and technical assistance in each country. Regional approach . . ." Recently, the Bank's Regional Vice Presidential Units (VPUs) have prepared "Regional Strategies," which synthesize the Bank's A single common strategy for more than one country with overall goals and approach in each Region. Within the broad Re- highly similar circumstances and objectives, such as the CASs gional framework, "different approaches for different clients" for the Eastern Caribbean Sub-Region prepared in 1995 and (as stated in the South Asia strategy) are established through 2001, were defined on the basis of development objectives elu- country-specific assistance strategies. cidated by a Regional body, the Organization of Eastern Caribbean States Secretariat, and defined a set of Bank objectives and in- Regional Integration Assistance Strategies (RIAS), such as struments that applied across the countries in the group. those the Bank has prepared for West and Central Africa, 1 1 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 W o r l d B a n k L e n d i n g t o t h e P M C s F i g u r e 3 . 1 W a s S i g n i f i c a n t l y L o w e r t h a n t o O t h e r L o w - P o p u l a t i o n C o u n t r i e s (Gross lending per capita, US$m, annual average, 1992-2002) All low-population countries Low-population countries in South Asia Low-population countries in the Caribbean Low-population countries in Africa Pacific member countries 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 Note: Low-population countries refers to Bank-member countries with fewer than 1 million people. 1992 and 2002 averaged US$4.5 million per during the decade were to Samoa (3) and capita annually, compared with US$13.1 mil- the Solomon Islands (3). By amount, lion per capita in LPCs in the Africa Region lending to the Solomon Islands,Samoa,and and US$16.3 million in LPCs in the LAC Fiji accounted for 88 percent of new Region (see figure 3.1). The low level of commitments between 1992 and 2002. lending was a result of several factors: (i) the This distribution reflected a large infra- high amount of grant aid in the region and structure loan to Fiji and an improving high lending from ADB, which led the Bank environment for public investment in Samoa to deliberately limit its efforts to lend; (ii) a since the late 1990s.While the environment weak relationship with the PMCs and for lending to the Solomon Islands has been other donors, which reduced the Bank's poor, Bank operations included a 1999 ability to pursue lending in several areas adjustment loan that endeavored to help where it intended to do so; (iii) a weak improve this environment as well as invest- policy environment in many PMCs and ments in health and education. Micronesia, difficult political conditions in Fiji and the the Marshall Islands, and Palau were all Solomon Islands; and (iv) limited allocation beneficiaries of significant grant aid under of resources and staff to develop a more the Compact of Free Association with the active lending program.These constraints United States and were uninterested in were reflected in some 27 projects being borrowing from the Bank. Kiribati main- commenced and then dropped--nearly three tained significant external reserves and also times the number of projects approved.This did not pursue borrowing from the Bank. compares with a one-to-one ratio of approved Vanuatu, on the other hand, was an to dropped projects in the rest of the Bank. interested IDA-eligible borrower that did not Some operations were brought to advanced receive a single loan during the period stages of preparation, but were subsequently under review. Although the Bank expressed Bank funded by other donors. the intention to explore regional-level lending was lending along the lines of models in Africa concentrated Bank lending was concentrated in three and the Caribbean in its 2000 strategy, in in three PMCs. PMCs. Six of the nine projects approved retrospect, this proposal did not reflect an 1 2 W O R L D B A N K A S S I S TA N C E T O T H E P M C s , 1 9 9 2 ­ 2 0 0 2 S e c t o r D i s t r i b u t i o n o f A i d t o t h e P M C s H a s T e n d e d t o w a r d t h e S o c i a l S e c t o r s T a b l e 3 . 1 ( p e r c e n t o f t o t a l a i d c o m m i t m e n t s , 1 9 9 2 ­ 2 0 0 2 ) All EU members, New Sector IDA ADB multilaterals Australia total Zealand Japan USA All donors Social Infrastructure & Services 53 65 43 75 57 72 23 5 37 Education, total 31 9 12 32 23 59 8 0 14 Health, total 14 4 3 11 13 6 7 2 6 Population programs 0 2 1 0 0 0 0 1 0 Water supply & sanitation 0 13 8 7 3 2 6 0 5 Government & civil society 0 33 14 18 3 4 0 0 8 Other social infrastructure & services 9 4 4 8 14 1 3 3 5 Economic Infrastructure 29 21 22 4 25 5 49 3 19 Transport & storage 22 3 13 2 10 2 35 0 12 Communications 7 0 1 0 10 0 1 1 1 Energy 0 5 3 1 3 0 13 2 5 Banking & financial services 0 6 3 0 2 1 0 0 1 Business & other services 0 6 2 0 0 1 0 0 1 Production sectors 0 5 13 8 7 15 24 2 11 Multisector 0 8 9 8 4 9 4 13 9 Commodity aid / general program assistance 0 0 8 3 0 0 0 61 18 Unallocated/unspecified 18 0 4 1 3 0 0 15 5 Total 100 100 100 100 100 100 100 100 100 Source: OECD database: CRS/Aid Activities, ODA/OA Commitments, Aggregated by sectors, 1990­2003. Data as of February 19, 2004. accurate assessment of the economic and more than half of its lending to water supply political cohesion in the Pacific,and regional and sanitation,government and civil society, lending was not pursued.17 and finance (see table 3.1). In retrospect, continued Bank lending in infrastructure Bank lending in infrastructure and the was relevant, given a priority need for the Bank lending in adjustment loan to the Solomon Islands PMCs to establish effective basic infrastruc- infrastructure were relevant interventions. By sector, four ture networks and supportive institutional and the projects were in infrastructure (transport, environments;positive prior Bank contribu- adjustment telecommunication);four were in the social tions in these areas;and a view among PMC loan to the sectors (health and education),and one was officials interviewed by OED that direct an adjustment operation in the Solomon Bank engagement in infrastructure offered Solomon Islands. The Bank appropriately avoided benefits beyond the financing component, Islands were lending in such other areas as financial such as the Bank's worldwide experience relevant intermediation, housing, and agriculture, and technical expertise. A continued interventions. where it had enjoyed little past success.18 demand for Bank support in infrastructure The composition of Bank commitments is also reflected in the statement by the differed from those of ADB,which allocated Governor of Palau, representing seven 1 3 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 PMCs at the 2003 Annual Meetings, that Bank's nonlending work had positive "above all the [Bank's] strategy must outcomes in helping develop sector strate- recognize that past lending support has gies and facilitated the funding activities of been too limited and that such funding other donors. access is primary to the development of a modern infrastructure." The fiscal 1999 Lending outcomes were below Bank adjustment loan in the Solomon Islands was and regional norms, but varied consider- also a relevant intervention that followed ably by country and sector.Fifteen projects several years of dialogue on economic were completed and evaluated during the reforms. It supported a reform-minded decade (see table 3.2). Of these, 66 percent government and aimed to phase in the basic were rated satisfactory at completion, policy framework for a market-oriented and compared with a Bank-wide average of private-sector-led economy, which remains 71 percent satisfactory. Project outcomes an essential need in the Solomon Islands. varied considerably by country. In Samoa and Fiji, all projects (8 out of 8) were rated Given the need Given the need for selectivity, the satisfactory at completion, while just for selectivity, prudence of Bank lending in the social 29 percent (2 out of 7) were rated satisfac- the prudence of sectors is open to question.Bank lending in tory in Vanuatu, the Solomon Islands, and the social sectors accounted for 40 percent Tonga. By sector, 80 percent of projects in Bank lending of new Bank commitments during the infrastructure had satisfactory outcomes, in the social decade.While some of these interventions compared with a Bank-wide average of sectors is open made positive contributions in themselves, 69 percent; 66 percent of projects in the to question. their appropriateness in the context of a social sectors were satisfactory, compared limited overall Bank role is questionable with 76 percent Bank-wide, and both the because of: (i) the high degree of bilateral financial sector operation in Tonga and the donor involvement in these sectors; (ii) the adjustment loan to the Solomon Islands had reluctance of some PMCs to borrow for"soft unsatisfactory outcomes.The evidence that Lending sectors"as grant financing was available;and is available on projects approved during the outcomes were (iii) a perception among PMCs and other evaluation period points to no overall below Bank donors that there was an unmet demand for improvement in the quality of the Bank's and regional Bank assistance in other areas. In practice, portfolio:of the four projects approved after moreover, the Bank had unsuccessful 1992 and closed during the evaluation norms, but experiences in the social sectors in Vanuatu period,only one had a satisfactory outcome, varied and the Solomon Islands. An education two were unsatisfactory, and one was considerably by project in Vanuatu cost the Bank more than cancelled.The Country Annexes review the country and US$750,000 to prepare but was subse- development contribution of Bank lending sector. quently cancelled without disbursing when in each of the PMCs. a new government withdrew support for the project. In the Solomon Islands, the A positive broadening of Bank project Education III project,which closed in 2001, objectives in the late 1990s indicates the had an unsatisfactory outcome. In addition, way forward. Several interventions de- A positive the Bank incurred more than US$500,000 signed and financed by the Bank in the broadening of in preparation costs for a fourth educa- 1980s aimed at physical construction Bank project tion project. However, when the Solomon targets within their respective sectors,along Islands fell into nonaccrual status, the with technical assistance to strengthen objectives in project had to be dropped and it was implementing agencies.This was the case, the late 1990s subsequently financed by grants from other for example, with the first Fiji transport indicates the donors.While the situation for lending in project and the first education project in way forward. the social sectors was not attractive, the the Solomon Islands. More recent interven- 1 4 W O R L D B A N K A S S I S TA N C E T O T H E P M C s , 1 9 9 2 ­ 2 0 0 2 T w e n t y B a n k L e n d i n g O p e r a t i o n s W e r e T a b l e 3 . 2 A c t i v e d u r i n g 1 9 9 2 ­ 2 0 0 2 Net loan Latest Approval Present amount Outcome DO year Country status Project Sector (US$m) rating rating Approved prior to 1992 1986 Samoa Closed Multiproject Rural infrastructure 3.1 S 1986 The Solomon Islands Closed Education II Education 6.1 S 1986 Vanuatu Closed Multiproject Rural 2.5 U infrastructure 1987 Samoa Closed Afulilo Hydropower Power 3.7 S Project 1988 Fiji Closed Road Upgrading Transport 23.4 S 1988 Vanuatu Closed Education Education 8.6 S 1989 Fiji Closed Third Telecom Telecom 7.6 S 1989 Samoa Closed Telecom Telecom 5.0 S 1990 Fiji Closed Housing Urban development 12.9 S 1990 Samoa Closed Emergency Road Transport 20.4 S Rehabilitation 1990 Tonga Closed Development Bank II Financial sector 2.3 U 1991 Vanuatu Closed Housing Urban development 1.6 U Approved 1992­97 1992 Fiji Closed Road Upgrading II Transport 14.9 S 1993 The Solomon Islands Closed Education III Education 17.1 U Approved 1998­2002 1998 Samoa Closed Infrastructure Asset Infrastructure 14.8 HS Management 1999 The Solomon Islands Closed SAC Economic policy 7.0 U 2000 Samoa Active Health Project Health 5.0 S 2000 The Solomon Islands Active Health Sector Health 4.0 U Development 2001 Vanuatu Cancelled Second Education Education 3.5 U 2002 Tonga Active Cyclone Emergency Infrastructure 5.9 S Recovery Project 2002 Samoa Active Telecom & Postal Telecom 4.5 S Sector Reform Note: DO = development outcome; S = satisfactory; U = unsatisfactory; HS = highly satisfactory. tions, however, have been oriented toward Health interventions in Samoa and the addressing underlying policy and institu- Solomon Islands aimed to help implement tional weakness in the respective sectors broad sector-wide reform agendas. Policy and have been used more effectively as dialogue and the Structural Adjustment instruments of policy dialogue.The fiscal Credit (SAC) approach in the Solomon 1998 Infrastructure Asset Management Islands sought to redress underlying Project in Samoa,for example,evolved into weaknesses in economic management. the first of a series of programmatic The recent Telecom Project in Samoa lending operations aimed at infrastructure tackles lack of competition and inadequate asset management and risk mitigation. regulation in the sector. 1 5 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 Bank-financed Bank-financed projects that served as Nonlending Services projects that conveyors of best practice and as models Nonlending services formed the core of for other countries also indicate an served as Bank assistance during the decade. The approach for the future.A few of the Bank's Bank's ESW and technical assistance (TA) conveyors of projects had a useful role in helping dissem- formed the core of its assistance to the best practice and inate best practice among the PMCs. In the Pacific, accounting for 47 percent of ad- as models for Bank's experience in Samoa, for example, ministrative expenses during the decade other countries the infrastructure projects helped establish (compared with 29 percent in the Carib- also indicate a model for a participatory framework to bean).The centerpiece of Bank assistance an approach help mitigate weather-related risks. The was the biannual Regional Economic model is being adapted in Tonga, and other for the future. Report (RER). Five RERs were prepared, PMCs have expressed interest in emulating along with four regional sector reports (see this experience. Under the second project, Nonlending box 3.3) and two formal country-specific moreover, the Samoan government success- reports (a CEM on Fiji and a health sector services formed fully implemented a significant downsizing review in Samoa). A range of other techni- the core of in its public works department, which has cal assistance, advisory services, and Bank assistance yielded important lessons for other PMCs. informal analytical services were provided during the The second telecom project in Samoa has in banking supervision, utility regulation, decade. also been designed to help guide and public expenditure management, fisheries, demonstrate a shift toward a more compet- population policy, climate change adapta- After 1993, the itive telecom environment, which remains tion, and transport planning (see Annex C). a difficult issue throughout the region. Bank's economic Bank procurement guidelines, introduced After 1993, the Bank's economic work work moved through its lending operations in Samoa, moved away from country-specific away from were credited with helping stimulate analysis.The 1993 RER included country- country-specific greater transparency in the country's specific economic reports for all eight analysis. broader procurement framework. PMCs that were members at the time.After this, following an informal arrangement with ADB, the Bank agreed to continue to T h e m e s o f t h e W o r l d produce a biannual RER, while the ADB B a n k ' s R e g i o n a l B o x 3 . 3 would produce country-specific economic E c o n o m i c a n d S e c t o r studies. The subsequent RERs contained R e p o r t s , 1 9 9 2 ­ 2 0 0 2 annexes, which summarized economic trends during the prior two years until Regional Economic Reports the 2002 RER, which dropped the practice 1993: An overview of macroeconomic, structural, human development, of country-specific annexes entirely. As a and environment issues (including eight country-specific consequence of the agreement with ADB, economic reports) the Bank produced considerably fewer 1995: The productive sectors country-specific economic reports on the 1998: The role of the government and public sector reform PMCs than it did in low-population countries 2000: Urban development, oceanic resource management, and climate elsewhere. For example, in Belize (popula- change tion 240,000, GNI per capita $2,980), formal 2002: Trade issues Bank ESW during the last decade included Regional Sector Reports coverage in three regional reports,a country- 1992: Higher education specific CEM, a public expenditure review, 1992: Energy assessment and a study on the environment. Similarly, 1993: Transport sector for the Maldives (population 276,000, GNI 1994: Health sector 1 6 W O R L D B A N K A S S I S TA N C E T O T H E P M C s , 1 9 9 2 ­ 2 0 0 2 per capita $1,907), the Bank prepared two lack of country specificity reduced their country-specific CEMs and a public expendi- relevance to each PMC. As such, while ture review. many of the RER analyses and broad recommendations--including those from The RERs have been well-received and the early 1990s--remain highly relevant, The RERs have helped generate a consensus on what they have yet to be translated into policy been well- needs to be done to improve economic actions and development outcomes. received and management in the region. The RERs Among other reasons identified for the helped generate endeavored to provide a cost-effective limited influence of the RERs on imple- a consensus on analysis of issues common to the PMCs. mentation are: (i) inadequate allocation of According to interviews conducted by Bank staff and financial resources for follow- what needs to OED,the reports elicited significant interest up and dissemination activities; (ii) weak be done to and were well-received in the Pacific among linkages between the RERs and Bank improve their audience of governments, donors, lending activities; (iii) insufficient in-depth economic nongovernmental organizations (NGOs), discussions with individual PMCs (as would management and the academic community. The RERs be the case with country-specific CEMs); in the region. made a substantial contribution toward (iv) a bias in the RERs toward similarities generating a consensus in the region on and common issues rather than the distinct "what" needs to be done to improve conditions in each PMC; (v) after the 1993 economic and sector management in the report, poorly designed annexes that were PMCs.In some instances,the reports helped restricted to an outline of trends during inform policy directions in the PMCs and the previous two years rather than an However, the were also used by other donors in the adaptation of the broad themes of the RERs RERs did not formulation of their programs and strategies to particular country circumstances; and prove an in the region.In several instances,moreover, (vi) uneven collaboration with other effective vehicle the Bank followed the RER with a series of donors to reinforce the messages of the for country- seminars for officials in the PMCs as well as RERs.As the decade progressed, moreover, the donor community. These were well- the RERs became less economic reports specific policy received by participants as relevant and that assessed macroeconomic conditions advice. informative sessions, and more frequent and structural policies, and more thematic such seminars were requested. Annex D studies on particular issues. The lack of highlights some of the key policy country-specific analysis and recommen- recommendations of the RERs. dations coupled with the paucity of country- specific ESW constrained the Bank's ability Other analytical However, the RERs did not prove an to develop country-specific strategies and and advisory effective vehicle for country-specific enhance the effectiveness of its lending services made policy advice. According to government operations. officials, Bank staff, and other observers useful interviewed by OED, the primary weak- Other analytical and advisory services individual nesses of the RERs were (a) the absence of made useful individual contributions, but contributions, recommendations adapted to country- were diffused rather than concentrated but were specific circumstances and (b) insufficient toward a few key objectives. The 1995 diffused follow-up assistance to help implement Fiji Economic Memorandum was seen by rather than the recommendations of the Bank. Only some observers as a benchmark study on concentrated in some cases were the RERs seen as structural weaknesses in the economy. providing an analysis of "how" to progress However, limited interaction and dialogue toward a few toward key objectives, and even then, the after its publication precluded assistance in key objectives. 1 7 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 implementing its recommendations. The Solomon Islands.The Bank was not involved 1998 Samoa health sector review helped in the structural reform efforts of Samoa, develop a health sector reform strategy, Vanuatu, or Tonga in the 1990s; allowed which the Bank is now supporting through dialogue with Fiji after the 1995 CEM to a lending operation. In the "Stakeholder lapse; and had only limited sustained Participation in Development Series," the dialogue with the Micronesian countries. Bank produced working papers for six of According to Bank staff members, the the PMCs that provided a basis for limited availability of Bank resources and understanding and integrating social and staff prevented that. The Bank's limited cultural conditions into the Bank's work. In engagement in policy reform occurred 1993, several useful studies were produced despite the perception among policy- on private sector development in Fiji, makers in the region that the Bank's Vanuatu, and Samoa. Assistance to the Fiji comparative advantage is in economic Central Bank was welcomed as practical policy advice and indications in the PRS that and relevant, and most recommendations the Bank would engage more actively. were implemented. Findings from a public Although both the Marshall Islands and expenditure review inTonga were reflected Micronesia specifically identified access in the subsequent national budget. A review to Bank policy advice as a major factor of public service reform in the Marshall behind their decision to seek membership Islands fed into further United Nations in the Bank,only a limited degree of dialogue Other than in Development Program (UNDP) work in has taken place.Only in the Solomon Islands the Solomon the area.In Kiribati,the Bank provided some did the Bank maintain a consistent policy recommendations and training to help dialogue on economic reforms. Regular Islands, the improve the management of the external economic missions preceded the 1999 SAC Bank did not reserves. A 1998 Vanuatu utility reform and continued after its derailment in 2001. maintain a study led to further studies and a recommen- Those efforts had positive initial effects consistent dation that a multisector regulatory authority in developing a reform agenda, building policy dialogue be established. However, while this elicited awareness and ownership of reforms, on economic strong interest from the government, to contributing to the work of other donors, date--six years after the initial study--no and positioning the Bank to make a reforms with steps have been implemented. To a large meaningful contribution at the right time. the PMCs. extent, due to their "demand-driven" nature, The potential contribution of the Bank was the Bank's country-level analytical and evident during the initial implementation advisory activities fell short of a cohesive stages of the 1999 SAC.Following the recent nonlending program aimed at advancing a reestablishment of law and order,the Bank is few strategic objectives and at informing the participating in a multidonor effort to assist Bank's lending activities. Instead, they were the government in its reconstruction and scattered across sectors, and many were reform efforts. one-off efforts with limited follow-up and long-term impact. The Bank made relevant regional-level The Bank recommendations, but had limited success made relevant Other than in the Solomon Islands, the in helping to implement them. Although regional-level Bank did not maintain a consistent policy the 2000 PRS did not fully develop the issue, recommendations, dialogue on economic reforms with the throughout the decade through its RERs the PMCs. While a range of economic policy Bank advocated an appropriately cautious but had limited reforms remain to be implemented in approach to regional cooperation initia- success in helping at least seven of the nine PMCs, the Bank tives, suggesting that only in a few areas to implement did not maintain a consistent dialogue on would the benefits outweigh the costs to them. these issues with any of them, except the each PMC. Several areas in which the Bank 1 8 W O R L D B A N K A S S I S TA N C E T O T H E P M C s , 1 9 9 2 ­ 2 0 0 2 did advocate greater cooperation remain development,and nearly all allocating funds The Bank relevant today: building larger and more toward this effort.The countries have also played a dynamic trading blocs, developing coopera- agreed to establish a Regional Adaptation positive role in tive arrangements in aviation and maritime Facility to serve as a focal point for mobiliz- encouraging a transport, developing a common approach ing funds to help implement adaptation consensus on to natural resource management and strategies.The Bank is currently preparing a disaster response, and developing regional grant-funded Adaptation Project in Kiribati strategies to training institutions in specific technical to help pilot implementation of adaptation mitigate areas. In such areas as trade reform and strategies in the region. natural disaster response, the Bank made useful disasters and contributions in fostering debate and Given the difficulty of the task,the Bank adapt to consensus, but its impact was limited in allocated inadequate resources to advanc- climate change. other areas. In fisheries, although the Bank ing key regional-level initiatives.Although consistently advocated a more unified the PMCs have established a range of approach to negotiating fishing royalties regional institutions and have regular high- and rights, the desired result has yet to level forums, the lack of concrete progress be seen,and there are only a few indications in advancing key regional initiatives partly Given the of improved cooperation among the PMCs. reflects inadequate political and economic difficulty of the In the airline industry, most PMCs cohesion suitable for supranational so- task, the Bank maintained and expanded their national lutions. At times, difficulties in translating allocated carriers, which sought to service major high-level agreements into working national- inadequate international markets.At present, most are level policies and actions have obstructed resources to in financial difficulty and rely on budget progress, highlighting the importance of transfers to operate. parallel national-level interventions to advancing key accompany any regional initiatives. The regional-level The Bank played a positive role in interests of industrial nations have also initiatives. encouraging a consensus on strategies to served to prevent some initiatives in mitigate natural disasters and adapt to fisheries from advancing.On the Bank's part, climate change. The Bank's role in develop- its potential contribution to building ing climate change and risk management knowledge, advocating solutions, fostering The South adaptation strategies since 2000 illustrates a consensus, and influencing a more co- Pacific Project the Bank's potential impact if it persists, hesive PMC response was undermined by its adequately staffs and budgets its efforts, distant relationship, its lack of focus of key Facility (SPPF) builds a consensus for reform among objectives, and the scant resources it and Foreign donors and PMCs, and relates regional allocated to dialogue and activities to follow- Investment recommendations to country-specific up on analytical work. Clearly, if the Bank is Advisory circumstances. Following the 2000 RER on to help advance regional-level initiatives, a Service (FIAS) Cities,Seas,and Storms and the Bank's asset high degree of selectivity and concentration made positive management projects in Samoa, the Bank of resources are essential. contributions, initiated a program to actively disseminate knowledge on the potential impacts of The South Pacific Project Facility although their climate change and adaptation strategies. It (SPPF) and Foreign Investment Advisory experiences organized two High-Level Adaptation Service (FIAS) made positive contribu- underline the Consultations and helped mobilize financ- tions,although their experiences underline need for ing from other donors to implement these the need for implementation of policy implementation strategies. Results to date have been reforms in the PMCs. FIAS worked on the of policy positive,with several of the PMCs establish- investment climate in each of the PMCs, ing high-level committees to manage including five diagnostic reviews.A consis- reforms in adaptation strategies and sustainable tent gap has existed, however, between its the PMCs. 1 9 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 A range of aid recommendations and what has actually and Palau, with which it has Compacts partners were been implemented in the PMCs. In 1989, a of Free Association. Japan's assistance was South Pacific Project Facility (SPPF) was distributed more evenly across the nine active in the established with financial support from PMCs, with nearly half of it in the transport Pacific region, various donors, including the International and energy sectors.Australian aid focused mostly in the Finance Corporation (IFC).The SPPF aimed on health and education (45 percent), social sectors. to provide technical assistance to small governance,and security.New Zealand's aid and medium-size private enterprises in the was in the education sector (60 percent) PMCs (and Papua New Guinea) to help and other social services. EC assistance also them develop proposals and secure financ- concentrated on education and health, but ing to establish or expand businesses. In included support for infrastructure as well. the first 12 years of operation, the SPPF The ADB was the largest multilateral donor, helped secure funding for 85 projects in with active programs in each of the PMCs. the PMCs, representing total investments Its sectoral focus since 1992 has been on of US$86 million. The projects were government and civil society (33 percent); concentrated in Fiji and Samoa (together water supply and sanitation (13 percent); accounting for 81 percent of projects), education (9 percent); and multisector largely reflecting the superior environ- operations (8 percent). Since 1996, a rising ment for private operation in these share of its lending has been policy-based. countries.The SPPF commissioned several The Bank's evaluations of its activities, which found The Bank's partnerships with other partnerships that it was having a positive impact on donors were weak during the mid-1990s, with other employment generation;was a key resource although they have improved with some enabling small private firms to obtain donors recently. Throughout the decade, donors were funding for expansion; and was conducting the Bank emphasized the importance of weak during its operations in a cost-efficient manner. closely aligning its efforts with those of the mid-1990s, Over the years, the SPPF developed a good other donors.However,the overall cohesion although they reputation in the region and has enjoyed a among aid providers fell short of expecta- have improved consistent demand for its services. The tions. Following the end of the Bank's with some facility has received strong support and formal agreement with ADB in 1992, its encouragement from PMC governments, relations with other donors weakened donors recently. and three--Samoa, Fiji, and Kiribati--make considerably. CAE mission interviews annual contributions to it. indicated poor collaboration and differing interests among donors, encouraging Partnerships governments to "play" one donor against A range of aid partners were active in the the other.As noted earlier, there was some Pacific region, mostly in the social sectors. concern about projects prepared by the The Bank accounted for just 2 percent of Bank being financed by other agencies gross aid disbursements and 12 percent of under conditions perceived as more multilateral disbursements to the Pacific favorable to the governments. Even though during the decade (see table 3.3). The U.S., the U.S. and Japan accounted for nearly Japan,Australia, EC,ADB, and New Zealand 60 percent of aid flows into the region, were the largest official financiers, account- Bank collaboration with them has been ing for almost 90 percent of gross disburse- limited. Moreover, almost every project the ments during 1992­2002. Other than the Bank co-financed with other donors U.S.and Japan,all the major donors focused produced complaints from the PMCs on their assistance on the social sectors. U.S. their excessive cumbersomeness due to assistance largely comprised general budget differing donor procedures and require- support to Micronesia, the Marshall Islands, ments.Following the Bank's move to Sydney 2 0 W o r l d B a n k L e n d i n g W a s a S m a l l P r o p o r t i o n o f O f f i c i a l T a b l e 3 . 3 D e v e l o p m e n t A i d t o t h e P a c i f i c R e g i o n , 1 9 9 2 ­ 2 0 0 2 ( G r o s s D i s b u r s e m e n t s , U S $ m ) Total Total, World multi- all Total aid World Bank, Bank, World lateral New United donor per % of multi- % of WORLD Country Bank IFC ADB EC UNDP aid Australia Japan Zealand States aid capita ($) lateral aid total aid Fiji 32.8 5.9 51.1 60.4 2.3 178.4 147.8 191 51 8.3 619.6 752.6 18 5.3 Kiribati 0 0 6.7 14.2 2.8 29.1 54.3 77.9 19.7 3.5 191.9 2,026.4 0 0 BANK The Marshall Islands 0 0 64.1 0 2.3 69.4 4.6 69.6 1 429.7 574.7 10,802.0 60 0 ASSIST Micronesia 0 0 37.9 0 3.4 46.7 9.6 127.5 1.6 822.7 1010.1 8,253.8 0 0 Palau 0 0 0 0 0.1 1 2 125.8 0.7 547.4 682.2 34,281.4 0 0 Samoa 31.7 0.9 32.5 44.7 5.4 135.3 95.1 142 62.1 8.5 452.5 2,568.1 23 7.0 ANCE The Solomon Islands 25.5 0 22.5 122.3 7.3 190.6 134.5 144.7 45.4 7.5 585.5 1,320.8 13 4.4 TO Tonga 1.5 0 37.9 25.4 1.5 79.4 78.6 94.5 47.2 7 317.6 3,139.6 2 0.5 Vanuatu 6.1 5.5 37.1 33.1 2.1 94.4 110.5 56.7 38.5 4 421.9 2,052.3 6 1.5 THE Grand total 97.6 12.3 289.8 300.1 27.2 824.3 637 1,029.6 267.2 1,838.6 4,855.8 2,380.6 12 2.0 PMCs, Source: OECD database as of 6 Feb 2004 (www1.oecd.org). Official Development Finance (ODF): Used in measuring the inflow of resources to recipient countries includes: (a) bilateral ODA, (b) grants and concessional and nonconcessional devel- opment lending by multilateral financial institutions, and (c) other official flows for development purposes (including refinancing loans) that have too low a grant element (q.v.) to qualify as ODA. 1992­2002 21 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 in 2000, relations with some donors seat" of the aid coordination process.The improved.The Bank andAustralia,in particu- 2000 PRS stated that the Bank intended to lar, forged a closer relationship.Australia has move "beyond discussion into fully aligned consistently supported Bank engagement in donor programs within country-driven the Pacific, including through significant reform programs." Some positive efforts trust fund support and financing of a were introduced by the PMCs in this country officer position. Annual tripartite respect. Samoa, for example, integrated a meetings with ADB and AusAID have three-year public sector investment been established, a close partnership has program into the budgetary process and emerged among key donors in the Solomon established coordinating agencies for both Islands, and initiatives have commenced to multilateral and bilateral aid. By and large, harmonize donor administrative processes. however,the objective of fostering country- driven aid coordination has yet to be Country- Country-driven aid coordination achieved. Continuing symptoms of donor- driven aid remains lacking. Although improved aid driven aid in the PMCs include fiscal coordination coordination was a key stated Bank ob- pressures arising from inadequate budget- jective, the Bank was unable to help PMC ing for maintenance and recurrent costs of remains governments significantly strengthen their donor projects, heavy burdens on limited lacking. aid coordination activities. Throughout the staff in key departments, and long delays in decade, the Bank's strategy documents recruiting managerial and technical staff to advocated the need for donors and the administer projects. PMCs to place the PMCs in "the driver's 2 2 4 Development Outcome Assessment Outcome: Moderately Unsatisfactory B ank efforts prior to 2000 were undermined by a lack of clearly defined objectives. For much of the past decade, the Bank a lender of last resort is also not clear, given operated without clearly defined outcome the abundance of aid received by the PMCs. objectives. As stated in one Bank document, In the event,no evidence exists of such"last between 1992 and 1997, the Bank's main resort"loans being made. goal was to provide some service to the PMCs, while containing costs and not The 2000 Poverty Reduction Strategy The 2000 adding to the already high levels of aid in established clearer parameters for Bank Poverty the region.This modest goal translated to assistance, but failed to focus Bank activi- Reduction knowledge services to help countries ties toward specific country or sector Strategy prepare and implement development strate- goals. The fiscal 2000 PRS fell short of established gies; assistance in the education sector establishing intermediate objectives, on in Melanesia (Vanuatu and the Solomon either a country-specific or sectoral basis, clearer Islands),as the ADB was not involved in this toward the goal of "helping bring about parameters sector; and providing other lending as a last equitable, sustainable growth and higher for Bank resort. In retrospect, the first of these living standards." The small states agenda assistance, but services remains highly relevant, reflecting that Bank knowledge services intended to failed to focus both a consensus on what the Bank's help advance remains a vast area, covering Bank activities comparative advantage in the region is, as all the needs of small states worldwide.As toward specific well as a high development priority in the a consequence, while any specific Bank PMCs.The appropriateness of the second service may be relevant to the agenda, in country or two areas is more questionable, however. aggregate, they did not help significantly sector goals. Even though improving education in advance any particular goal. The Bank's Melanesia is a priority,the PMCs are hesitant focus on transport and telecommunication to borrow from the Bank given the availabil- infrastructure was appropriate, given the ity of grant financing.The rationale of being Bank's prior experience and continued 2 3 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 While the Bank demand in these areas from the PMCs. envisioned,nor did it foster country-driven made positive Although several loans have been made in aid coordination. Although the Bank has the health sector since 2000, the decision put in 15 years of effort, the public individual to focus lending in the social sectors can education systems in Melanesia continue interventions, be questioned in the context of the need to have serious deficiencies, reflecting a its lack of to be highly selective, the availability of lack of consensus on the approach to strategic focus grant funding in these sectors, and the reforms, as well as a low capacity to im- constrained its continued need for the Bank's services in plement proposed solutions. The adjust- contribution to such areas as economic policy reform. ment program in the Solomon Islands had development in Although at least seven of the PMCs a promising start, but was derailed by civil required significant policy and institu- conflict and did not achieve its objectives. the PMCs. tional reforms to generate a better environ- With a limited focus on the policy and ment for both public and private institutional environment for both public investment, other than in the Solomon and private investment in the other PMCs, Islands, the Bank did little to help develop the Bank was unable to make a significant or implement reform agendas. This contribution toward the PMCs' main occurred despite the Bank's own assess- objective of generating higher and more The outcome of ment, as well as views in the PMCs and participatory growth. other major donors, that the Bank's Bank comparative advantage was its interna- The outcome of Bank assistance is assistance is tional experience and technical expertise assessed as moderately unsatisfactory. The assessed as in economic policy reform. absence of strategic objectives, the limited moderately effectiveness of its lending programs, unsatisfactory. While the Bank made positive individ- especially in the Melanesian countries, and ual interventions, its lack of strategic focus the lack of progress in helping the PMCs constrained its contribution to develop- develop and implement development ment in the PMCs. The lack of strategic strategies all support this conclusion. focus and the diffuse nature of much of the Bank's assistance during the past decade Institutional Development Impact: inhibited a more definite and measurable Negligible The contribution to development in the PMCs. The institutional development impact of the institutional Positive contributions on the part of the Bank's assistance is assessed as negligible. development Bank included high-quality analytical work As discussed above, the Bank's analytical impact of the that helped generate awareness and debate work was able to make positive contri- on international best practices in a range butions to building understanding and Bank's of relevant areas, effective infrastructure agreement around required policy reforms assistance is interventions in some PMCs, contributions in the PMCs.Among the lending projects assessed as toward improving social service delivery however, the impact of only 13 percent negligible. systems, a promising effort to foster a (2 out of 15) were assessed as having had consensus toward climate change adapta- a substantial institutional development tion strategies,and a range of other individ- impact.This compares to an EAP average of ually useful analytical and technical 44 percent and a Bank-wide average of assistance activities. However, the Bank's 38 percent "substantial" during the same nonlending services were undermined by period. Evaluations of completed projects their diffuse nature, lack of country- indicate that high staff and managerial specificity for ESW, and limited follow-up. turnover and difficulties in recruiting staff Hence, the Bank was unable to help undermined capacity building efforts in "prepare and implement development the beneficiary institutions. In some cases, strategies" in the PMCs as it had expatriate consultants were found to be 2 4 D E V E L O P M E N T O U T C O M E A S S E S S M E N T "doing the work" rather than transferring period.Bank contributions to road develop- skills and in several cases,the performance ment in Fiji and Samoa were sustained,with of external consultants was assessed as both countries maintaining their infrastruc- poor. The ADB collaborative agreement ture assets.The physical contributions of proved ineffective in having institutional telecom projects in both Fiji and Samoa development impact,with five of the seven have also been maintained to date.However, completed joint ADB/Bank projects rated both companies still enjoy monopolistic as having had a negligible institutional positions and their performance in a more development impact.The increasing focus competitive environment remains to be of Bank projects on underlying policy and seen. The contributions of the housing institutional issues rather than narrow projects in both Fiji and Vanuatu were not physical construction targets seems to sustained. Both institutions are in serious be improving the Bank's institutional financial difficulties and not in a position development impact, but it is too early to to effectively address low-income urban determine. housing needs. The sustainability of edu- cation projects in both the Solomon Sustainability: Unlikely Islands and Vanuatu is less certain.While, to The sustainability of the Bank's limited date, the physical assets conferred by the The contributions is assessed as unlikely. projects have largely been maintained, sustainability Among the Bank's lending interventions, sector management, institutional capacities, of the Bank's the contribution of only 6 out of 15, or and the availability of maintenance funding limited 40 percent, were rated as likely to be remain concerns in both countries. Sustain- contributions sustained, compared with a Bank-wide ability of the Bank's nonlending services average of 56 percent and an EAP Regional is undermined by the one-off nature and is assessed as average of 69 percent during the same limited follow-up of many of the activities. unlikely. 2 5 5 Contribution to Outcomes Bank Performance A s noted earlier, the Bank engaged in a low level of activity in the PMCs after terminating its official agreement with theADB in 1992. But the bank proceeded with these including lending through ADB, foregoing The Bank changes without seeking the guidance of lending in favor of analytical services, and contained its the Board, and no formal statement of the reducing country-level coverage in favor of administrative Bank's approach in the Pacific was made regional-level work.These measures indeed costs but at until 2000. In response to OED's 1992 helped contain the Bank's costs. During the expense evaluation, the Bank had indicated that, for the past 12 years, the Bank spent it to be effective, it had to maintain direct US$23.2 million on administrative costs in of the quantity relationships with the PMCs in order to the Pacific (of which US$8.8 million was and quality provide sound policy advice and prepare funded by trust funds).This compares to of its services. relevant projects.This did not occur, and a US$32.4 million (including $2.2 million in perception developed in the PMCs that the trust funds) spent by the Bank on six Bank had "ceded" the region to the ADB, countries with a similar combined popula- despite the formal termination of the Bank/ tion in the Caribbean region. Lower Bank ADB agreement. Given the significant resources significantly affected its services departure from the indication that it gave to the region, leading to low lending levels, CODE,the Bank should have communicated limited country-level work, inadequate its decision on how it was servicing the follow-up to ESW, and weak relations with PMCs between 1992 and 2000 to the Board. clients. Within sectors, Bank costs per project in the social sectors were signifi- The Bank contained its administrative cantly higher than those in infrastructure, costs but at the expense of the quantity reflecting greater learning costs as the Bank and quality of its services. Over the years, entered the health sector in the PMCs for the the Bank emphasized the need to contain first time. This factor underscores the the costs of its assistance to the Pacific importance of focusing on just a few sectors region.It developed various means to do so, to reduce transaction costs. 2 7 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 The Bank's The Bank's effectiveness as a"knowledge envisioned increased support for key effectiveness as bank"was undermined by a lack of strategic regional-level initiatives, difficulties associ- objectives, weak relations, and inadequate ated with these efforts warranted consider- a"knowledge resources. The Bank's efforts to be a ably more resources and attention than bank"was "knowledge Bank" between 1992 and 1997 was made available. Finally, the absence of a undermined would have been enhanced by clearer matrix of objectives, interventions, and by a lack of strategic objectives and a greater allocation monitorable outcomes for each country, strategic of resources. Limited resources for dissemi- as well as for regional-level objectives, signif- objectives, nation,follow-up dialogue,and assistance to icantly undermined the accountability frame- weak relations, implement the recommendations of the work of the PRS. In addition, it prevented RERs led to poor development impact. meaningful monitoring and evaluation activi- and inadequate Without clearly defined strategic objectives, ties that would have enabled the Bank to resources. the Bank's interventions were pursued on a better assess the relevance and effectiveness project-by-project basis rather than as part of its approach and enabled it to undertake of a cohesive effort to achieve certain goals. appropriate adjustments. For the Bank's approach to have been more effective, it should have developed a much The Bank's relationship with clients in closer relationship with both the govern- the region was weak.The Bank's communi- ments and the major donors in the region cation with clients in the region during much to enhance the likelihood that the issues of the decade was sporadic,undermining the While the fiscal raised in the RERs would be addressed. contribution of both its lending and nonlend- 2000 PRS Instead, during this period, the Bank's ing services.A broad perception developed represented a relationship with the PMCs and other among government officials that the World positive effort donors weakened and its image as a distant Bank had "ceded" development assistance to"re-engage" institution intensified. in the region to ADB. In the mid-1990s, in the Pacific, it in particular, limited interaction took place did not provide While the fiscal 2000 PRS represented a between Bank management and counter- positive effort to"re-engage" in the Pacific, parts in the region, and the Bank developed an adequate it did not provide an adequate framework a reputation of being remote and hard framework to to channel resources toward advancing to access. This is particularly relevant channel key objectives in the PMCs.After 2000, the since several interviewees emphasized the resources Bank took a more structured approach that importance of the oral, rather than written, toward concentrated lending in a few areas. culture in the Pacific and said that face- advancing key However,the PRS did not identify country or to-face communications are perceived to sector-specific objectives and strategies, be significantly more effective than written objectives in which were essential given the significant communications. The Bank's experience the PMCs. differences in the country context and policy also points to the importance of maintain- and institutional frameworks in each ing strong individual relationships. In country. Instead, many sectors and themes the Samoa infrastructure projects, for were identified for Bank "support." The lack example, the government highlighted the of country-specific objectives, moreover, led close personal interaction and teamwork to uneven attention from the Bank, with developed between the Bank and govern- some PMCs receiving considerably more ment officials as major factors accounting The Bank's attention than others.To some extent, the for the project's success. The Bank's task independence of Timor-Leste also diverted manager for the project had worked in the relationship management attention and staff time away region for 10 years, which had facilitated with clients from the PMCs: since 1999, more than development of close working relations in the region 40 trust fund projects in Timor-Leste have (as well as enabling better cross-regional was weak. been managed by Bank staff. While the PRS learning and application of best practices). 2 8 C O N T R I B U T I O N T O O U T C O M E S The Solomon Islands government stated importance of effective governance and An initiative to that it was a "morale booster" to see the economic management for meaningful accumulate continuation of the same Bank staff in public investment. Samoa has a well- and share supervision missions.The IFC/SPPF staff who managed economy, and despite political knowledge on have worked in the region for more than a instability, Fiji too has created an environ- small states decade also report that their tenure has ment conducive to effective public and enabled them to establish a degree of trust private investment. All 8 Bank-financed was made, and knowledge that significantly enhances projects completed in Samoa and Fiji during although much their effectiveness in the PMCs. the past 10 years had satisfactory outcomes remains to be at completion. By contrast, of the six done to make An initiative to accumulate and share projects completed in Tonga,Vanuatu, and it effective in knowledge on small states was made, the Solomon Islands, only two had satisfac- the Pacific. although much remains to be done to make tory outcomes.Although the Bank's design it effective in the Pacific. Following collabo- and supervision of these projects exhibited ration with the Commonwealth Secretariat some shortcomings, each of the countries to produce the 2000 Joint Task Force Report also displayed significant weaknesses in on Small States,the Bank has since organized governance, with policy frameworks that an annual Small States Forum during the limited the effectiveness of the Bank's Poor Bank/Fund Annual Meetings.This effort has activities. Best practice advice and even been broadly welcomed among the PMCs as country-specific analytical work will have governance the only forum of its kind and a useful means limited impact unless the PMCs themselves and economic of exchanging experiences among small embark and sustain meaningful economic management states worldwide. The forum has also reform programs. Political instability also and political provided an opportunity for the major undermined the potential contribution of instability in international donors to rationalize their the Bank in some PMCs. As discussed some PMCs respective approaches to assisting small above, civil conflict in the Solomon Islands were major states. Nevertheless, significant room exists derailed the adjustment operation and for the Bank to enhance its role in accumu- adversely affected the health and education factors that lating and disseminating information and projects. In Vanuatu, frequent political undermined helping adapt experiences across small change,accompanied by significant shifts in the Bank's states. While 40 of the Bank's member priorities from one government to another, potential countries are "small" (with populations of complicated both the design and imple- contribution to under 1.5 million), there is only limited mentation of investment projects and development. interaction among staff working on small sector strategies. In Fiji, the Bank's plans to states across the Bank,and there is no formal "re-engage"in the country were derailed by or informal "small states network." Few the 2000 coup. mechanisms or funding sources in the Bank are available to compile regular thematic Deficiencies in the civil service and reviews of the Bank's experiences in small limited availability of local staff adversely Deficiencies in states. Moreover, the small states agenda affected investment lending. In several encompasses everything and it is unlikely to Bank-financed projects, skilled project the civil service effectively guide staff working on the Pacific. management was lacking and political and limited influence in project activities undermined availability Client Performance the projects' contribution to development. of local staff Poor governance and economic manage- This was the case, for example, in the Tonga adversely ment and political instability in some PMCs Development Bank Project and the Housing affected were major factors that undermined the and Multiprojects in Vanuatu. Some projects investment Bank's potential contribution to develop- encountered considerable delays due to the ment.The Bank's experience underlines the inability to recruit or retain qualified project lending. 2 9 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 managers, local staff, and consultants. In strong cadre of mid-level civil servants is Samoa,for example,some components of the a concern across the Pacific.The effective- Health Sector Project were substantially ness of public investment and aid utilization delayed because of the inability to recruit is unlikely to improve until civil services a suitable local consultant; the Emergency that are technically and administratively Road Project suffered from long delays in competent,properly motivated and remuner- appointing a project manager; and the ated, and free from political interference institution-building component of the Tele- emerge in the PMCs.Some promising propos- com Project was undermined by the als to generate cross-fertilization across government's inability to hire local counter- countries in the region through civil servant parts to external advisors. This lack of a exchange programs remain unrealized. 3 0 6 Findings and Recommendations T he Bank's experience in the Pacific during the past decade indicates that: · A challenge remains for the Bank to de- the limits of effectiveness. Geographical velop an optimal approach in the Pa- "proximity"and similar development con- cific. Despite the small population and straints are an insufficient basis for a sin- economies of the PMCs, their develop- gle common strategy for all PMCs or for a ment challenges remain complex.No easy regional integration assistance strategy. solutions to manage change and rapidly ad- The PMCs are a heterogeneous group with vance sustainable and equitable develop- differing economic, political and social ment have emerged. The diversity and circumstances,and few trade and transport remoteness of the PMCs and the need to links.The Bank's approach of formulating blend traditional cultures with modern a regional framework without specific ways compound the already formidable de- country and/or sector-wide objectives has velopment challenges associated with been ineffective for these same reasons.Its small-island states. The multiplicity of past tendency toward "lending where donors and high availability of grant aid in other donors are not active"and ad hoc an- the region have not yielded solutions.The alytical and technical assistance served to availability of financial aid is not the de- diffuse and limit its impact.Although some velopment constraint;rather,the policies "regional activities" were successful and and institutions governing private activity, others hold promise, each such initiative as well as the capacity to utilize public needs to be carefully scrutinized to en- funds effectively, are deficient. The task sure that it is feasible given the eclectic na- for the Bank is to effectively channel its an- ture of the PMCs. alytical,advisory,technical assistance and · Close coordination among donors at lending services to the PMCs in this diffi- the policy and strategy level and con- cult context. certed efforts to place the countries at the · The Bank's "regional approach" to the center of aid coordination are essential Pacific Islands has been pushed beyond in situations of high aid levels and a 3 1 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 multiplicity of donors.The Bank's expe- country-specific objectives can be em- rience in cofinancing projects with ADB bedded in a regional "strategy" or frame- was unsuccessful. The process tended work that defines a few highly select to add a considerable reporting and ad- sectoral/thematic parameters within which ministrative burden on the PMCs'limited the Bank will be engaged in the PMCs. As project management capacity, without part of the strategy,the Bank should iden- providing significant added value.Where tify a level of engagement in terms of lend- coordination between donors has been ing and nonlending in each country.Such achieved,the outcomes of Bank assistance an approach will necessitate selectivity have been better;for example,grant fund- both in terms of countries where the Bank ing has contributed to the technical as- is engaged, and the subsectoral/thematic sistance components of Bank projects. issues that it tackles. Such selectivity re- The lack of close coordination among quires careful analysis and close coordi- donors and the failure to harmonize pro- nation with the borrowing countries and cedures have also burdened the limited ad- major donors. From the findings of this ministrative capacities of the PMCs. evaluation,OED's view is that the core ob- · The Bank's efforts in the Pacific have jectives of the Bank's program in the PMCs been under-resourced and underfi- should be to:(a) improve public expendi- nanced, contributing to their lack of de- ture programs and policies, which would velopment effectiveness. On a comparative allow the PMCs themselves to be more basis,PMCs have received lower adminis- proactive in ensuring optimal allocations trative budgets,fewer dedicated staff,and and enhancing the development impact of fewerAAA services than comparable small- aid flows,and (b) remove policy and insti- population countries in the Caribbean tutional impediments to private activity. and elsewhere.This has constrained the · Prioritize and adequately fund a select Bank's ability to follow-up and dissemi- set of regional-level initiatives.Alongside nate its knowledge activities, and con- the country-level objectives, the Bank tributed to its weak relations with clients. should focus part of its assistance on a se- The level of resources,combined with the lect set of regional-level objectives.Possi- lack of clear country objectives, has had ble areas for support are:(i) developing a an adverse effect on the Bank's program common approach in fisheries to increase in the PMCs. returns and facilitate conservation;(ii) re- orienting the air and sea transport indus- The present challenge for the Bank is to tries to increase efficiency and interregional identify its objectives, an appropriate level access;and (iii) preparing to respond to en- of engagement, and cost-effective instru- vironment changes and natural disasters. ments for its assistance in the Pacific.Based · Do more to improve the depth and on the findings of this review, OED breadth of donor partnerships in the Pa- recommends that the Bank: cific. One of the main challenges in the PMCs is to better utilize the high levels of · Define focused and measurable country- available aid.Although the issue has been specific objectives within a highly selec- acknowledged during the decade,the de- tive regional engagement framework. sired degree of harmonization has yet to The Bank should define the country- be achieved.The Bank should:(i) continue specific objectives and outcomes it seeks to work toward developing clear and con- to influence in each PMC, as opposed to sistent messages with active donors in the past practice of defining a regional each country;(ii) develop closer ties with strategy largely in terms of inputs.These those donors with whom contact has been 3 2 F I N D I N G S A N D R E C O M M E N D AT I O N S less frequent,including the U.S.and Japan, quate administrative and staff resources the two largest financial donors in the re- have undermined the quality,impact,and gion;and (iii) encourage the PMCs to take sustainability of the Bank's interventions. a more active role in donor coordination At whatever level of engagement, the to ensure that donor activities are com- Bank should ensure that adequate re- plementary. Efforts to adapt worldwide sources are allocated to enable the out- experiences in applying Comprehensive come to be achieved (rather than just the Development Framework principles may outputs delivered). Adequate financing be of some benefit in the Pacific (see of the Bank's program in the Pacific would box 6.1). be facilitated by developing a coherent, · Ensure that the Bank's strategy is fully realistic set of objectives,as recommended funded and staffed. In the past, inade- above. B o x 6 . 1 A p p l y i n g C D F P r i n c i p l e s G o i n g F o r w a r d Several recommendations from the recent multipartner review holders hold themselves accountable; strengthen and use coun- of the Bank's experience in applying the Comprehensive De- try-led monitoring and evaluation systems; and avoid setting up velopment Framework (CDF) principles are of relevance to the separate structures to service projects and special needs of in- Bank's future role in the Pacific. They include: dividual donors. (i) To further a long-term holistic development framework, re- (iii) To foster country ownership, recipient countries should cipient countries should strengthen the link between medium- consult with a wider range of interest groups, the private sec- term frameworks (such as the PRSP) and budgets. Donors should tor, and those who lack an organized voice, including women support such linkages and make sure assistance is aligned and the poorest and most marginalized citizens. Donors should with national development strategies; provide long-term assis- work with the governments to devise approaches for consult- tance for capacity strengthening, including sustained support ing with elected officials, local governments, and nongovern- for public sector reforms and institutional development; and ment representatives. provide reliable, predictable financing with transparent, multi- (iv) To encourage country-led partnerships, recipient coun- year indicators, based on clear country performance criteria. tries should place responsibility for aid coordination at a high (ii) To strengthen result orientation, recipient countries level of government; give this function sufficient resources, au- should increase citizens' right to demand results and govern- thority, and political support to manage the process; and im- ment's ability to respond; train public servants to open up in- plement and enforce procurement and other accountability rules formation channels and educate the public; strengthen systems that will engender donor confidence. Donors should avoid mi- for internal and external accountability; and present develop- cromanaging the country aid process, and provide the capac- ment strategies through the media and in languages and forms ity building and resources countries need to assume aid that the general public will understand. Donors should no longer management--for example, by supporting the creation of inde- look to funds disbursed or inputs delivered as the only measure pendent country-level aid review panels. of success. Development programs should have measurable objectives linked to concrete outcomes to which all stake- Source: Toward Country-Led Development: A Multi-Partner Evaluation of the CDF, Operations Evaluation Department, 2003. 3 3 ANNEXES 3 5 Mongolia East Asia and Pacific Region China Rep. of Korea Myanmar Pacific Ocean Lao P.D.R. Thailand Vietnam Philippines Cambodia Marshall Islands Malaysia Fed. States Palau of Micronesia Papua Indonesia Kiribati New Guinea Solomon Timor-Leste Islands Vanuatu Indian Ocean Fiji Tonga 3 6 ANNEX A: PACIFIC MEMBER COUNTRIES Fiji . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Kiribati . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 The Marshall Islands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Micronesia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Palau . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Samoa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 The Solomon Islands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Tonga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Vanuatu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 3 7 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S FIJI Fiji has seen sound development progress, access to financial services, and an ineffective although this has been undermined by politi- commercial litigation system. cal instability. Fiji is the largest of the PMCs Lack of follow-up activities undermined and has a relatively well-managed and diversi- the Bank's contribution to infrastructure fied economy. Prudent macroeconomic development in Fiji. All four Bank-financed management, along with tax and trade reforms infrastructure projects in Fiji were rated beginning in the late 1980s, helped Fiji satisfactory at completion.Two road projects diversify its economy and achieve an annual (fiscal 1988­92 and fiscal 1992­99) helped Fiji average growth rate of 3 percent in the 1990s. establish an effective arterial road network, Key growth sectors included garments (which increased the participation of private firms in had a nearly tenfold increase), tourism, gold road works, and improved road safety. The mining,fisheries,agricultural crops,and timber. projects were less effective, however, in However, the sugar industry, which has been helping strengthen the Department of Public Fiji's largest merchandise exporter, has been in Works, which continues to have serious sharp decline since the mid-1990s,undermined capacity and managerial difficulties.A telecom by inefficient processing and expiring land project (fiscal 1989­97) helped commercialize leases for farmers. Investment levels also Fiji's telecom utility, modernize the telecom remained very low, with private investment network,and broaden access to services.While averaging only 4 percent of GDP during the this was a relevant contribution at the time,the decade. The coup in 2000 shook public project did not go to the next stage of helping confidence, caused a period of isolation from to establish a competitive framework in the the rest of the world, and resulted in a sector.The current monopolistic framework in 3 percent drop in GDP.The political situation telecom remains the key constraint to greater also led to reduced investment, high levels of efficiency,quality,and reach of telecommunica- emigration among the Indo-Fijian community, tion services. A housing project (fiscal and fiscal pressures. Sustaining Fiji's past 1990­99) helped introduce a new sector record of macroeconomic stability and raising policy framework; develop affordable housing public sector efficiency are high priorities. plots, and finance loans for housing construc- Engaging more of the population in the tion. While the project met its physical development process also remains a central objectives, the managerial and financial concern, as weakening support systems and performance of the Housing Authority deterio- limited economic infrastructure and opportu- rated significantly and project benefits were nities in rural areas are affecting more than half not sustained. Lack of low-income housing and the population and causing increasing strains increasing squatter settlements continue to be on Fiji's urban areas.Among the constraints to of increasing concern in Fiji's main urban greater private sector investment and growth areas.At several points during the decade, the are high cost and erratic utility provision;price government of Fiji expressed strong concerns controls on a range of consumer goods and about the lack of Bank activity in the country. services; high interest rate spreads and limited 3 9 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 F I J I a t a G l a n c e Fiji at a glance 9/15/04 9/15/04 East Lower- POVERTY and SOCIAL Asia & middle- Fiji Pacific income Development diamond* Development diamond* 2003 Population, mid-year (millions) 0.84 1,855 2,655 Life expectancy GNI per capita (Atlas method, US$) 2,360 1,080 1,480 Life expectancy GNI (Atlas method, US$ billions) 2.0 2,011 3,934 Average annual growth, 1997-03 Population (%) 1.1 1.0 0.9 GNI GNI Gross Gross Labor force (%) 2.6 1.1 1.2 per per primary primary Most recent estimate (latest year available, 1997-03) capita capita enrollment enrollment Poverty (% of population below national poverty line) .. .. .. Urban population (% of total population) 52 40 50 Life expectancy at birth (years) 70 69 69 Infant mortality(per 1,000 live births) 17 32 32 Access to improved water source Child malnutrition (% of children under 5) .. 15 11 Access to improved water source Access to an improved water source (% of population) 47 76 81 Illiteracy (% of population age 15+) .. 10 10 Fiji Gross primary enrollment (% of school-age population) 109 111 112 Fiji Lower-middle-income group Male 109 112 113 Lower-middle-income group Female 109 111 111 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1983 1993 2002 2003 Economic ratios* GDP (US$ billions) 1.1 1.6 1.8 2.3 Economic ratios* Gross domestic investment/GDP 21.1 16.0 .. .. Trade Exports of goods and services/GDP 43.6 52.4 .. .. Trade Gross domestic savings/GDP 15.7 8.9 .. .. Gross national savings/GDP 14.8 9.8 .. .. Current account balance/GDP -5.8 -5.0 -3.7 .. Domestic Domestic Investment Investment Interest payments/GDP 2.0 1.2 0.4 0.3 savings savings Total debt/GDP 38.9 19.8 11.5 11.8 Total debt service/exports 8.0 8.5 5.8 .. Present value of debt/GDP .. .. 11.1 .. Indebtedness Present value of debt/exports .. .. 41.2 .. Indebtedness 1983-93 1993-03 2002 2003 2003-07 Fiji (average annual growth) Lower-middle-income group GDP 2.0 2.1 4.1 5.0 .. Fiji GDP per capita 0.9 1.1 3.3 3.5 .. Lower-middle-income group Exports of goods and services .. 1.3 .. .. .. STRUCTURE of the ECONOMY 1983 1993 2002 2003 Growth of investment and GDP (%) Growth of investment and GDP (%) (% of GDP) 15 15 Agriculture 18.4 19.8 16.2 .. 10 10 Industry 19.7 25.9 27.0 .. 5 5 Manufacturing 9.2 14.6 15.7 .. 0 Services 61.9 54.3 56.8 .. 0 -5 98 99 00 01 02 03 -5 98 99 00 01 02 03 Private consumption 64.0 72.6 .. .. -10-10 General government consumption 20.3 18.5 .. .. GDI GDP GDI GDP Imports of goods and services 49.0 59.4 .. .. 1983-93 1993-03 2002 2003 Growth of exports and imports (%) (average annual growth) Growth of exports and imports (%) Agriculture 2.4 -1.0 2.2 .. 15 15 Industry 2.4 2.8 0.0 .. 10 Manufacturing 5.1 2.8 -4.0 .. 10 5 Services 1.1 3.4 6.5 .. 5 0 0 98 99 00 01 02 03 Private consumption .. .. .. .. -5 General government consumption .. 1.9 .. .. -10 -5 98 99 00 01 02 03 Gross domestic investment .. -1.7 .. .. -10 ExportsExports ImportsImports Imports of goods and services .. 0.8 .. .. Note: 2003 data are preliminary estimates. This table was produced from the Development Economics central database. * The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. 4 0 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S F I J I Fiji PRICES and GOVERNMENT FINANCE 1983 1993 2002 2003 Inflation (%) Domestic prices Inflation (%) 10 (% change) 10 Consumer prices 5.2 5.2 1.6 .. 5 Implicit GDP deflator 7.2 5.2 1.3 2.4 5 Government finance 0 (% of GDP, includes current grants) 0 98 99 00 01 02 03 Current revenue .. 25.8 23.1 .. 98 99 00 01 02 03 -5 Current budget balance .. 0.3 3.7 .. -5 GDP deflator CPI GDP deflator CPI Overall surplus/deficit .. -3.3 -7.2 .. TRADE 1983 1993 2002 2003 Export and import levels (US$ mill.) Export and import levels (US$ mill.) (US$ millions) 1,250 Total exports (fob) .. 452 546 .. 1,250 Sugar .. 150 107 .. 1,000 1,000 Gold .. 43 36 .. 750 Manufactures .. .. 188 .. 750 500 Total imports (cif) .. 756 893 .. 500 Food .. 108 154 .. 250 Fuel and energy .. 86 151 .. 250 0 Capital goods .. 235 206 .. 0 97 98 99 00 01 02 03 97 98 99 00 01 02 03 Export price index (1995=100) .. .. .. .. Exports Imports Import price index (1995=100) .. .. .. .. Exports Imports Terms of trade (1995=100) .. .. .. .. BALANCE of PAYMENTS 1983 1993 2002 2003 Current account balance to GDP (%) Current account balance to GDP (%) (US$ millions) Exports of goods and services 491 878 487 .. 2 2 Imports of goods and services 552 974 759 .. Resource balance -61 -96 -111 .. 0 0 97 98 99 00 01 02 03 Net income -28 -54 -78 .. 97 98 99 00 01 02 03 Net current transfers 25 69 122 .. -2 -2 Current account balance -65 -81 -67 .. -4 -4 Financing items (net) 58 35 21 .. Changes in net reserves 6 46 46 .. -6 -6 Memo: Reserves including gold (US$ millions) .. 270 .. .. Conversion rate (DEC, local/US$) 1.0 1.5 2.2 1.9 EXTERNAL DEBT and RESOURCE FLOWS 1983 1993 2002 2003 (US$ millions) Composition of 2003 debt (US$ mill.) Total debt outstanding and disbursed 437 324 208 265 Composition of 2003 debt (US$ mill.) IBRD 70 44 12 11 A: 11 IDA 0 0 0 0 A: 11 Total debt service 41 77 28 29 G: 86 IBRD 8 16 5 3 G: 86 IDA 0 0 0 0 Composition of net resource flows Official grants 15 24 6 .. Official creditors 33 -24 -2 0 D: 135D: 135 Private creditors 8 0 -6 -6 F: 8 F: 8 Foreign direct investment 32 91 77 .. E: 25 Portfolio equity 0 0 0 .. E: 25 World Bank program A - IBRD E - Bilateral B - IDA F - Private Commitments 0 15 0 0 D - Other multilateral A -CIBRD - IMF E - Bilateral G - Short-term Disbursements 20 2 0 0 B - IDA D - Other multilateral F - Private Principal repayments 3 12 4 2 C - IMF G - Short-term Net flows 17 -11 -4 -2 Interest payments 4 4 1 1 Net transfers 13 -15 -5 -3 Note: This table was produced from the Development Economics central database. 9/15/04 4 1 F I J I M i l l e n n i u m D e v e l o p m e n t G o a l s 1990 1995 2001 2002 1. Eradicate extreme poverty and hunger 2015 target = halve 1990 $1 a day poverty and malnutrition rates Population below $1 a day (%) .. .. .. .. Poverty gap at $1 a day (%) .. .. .. .. Percentage share of income or consumption held by poorest 20% .. .. .. .. Prevalence of child malnutrition (% of children under 5) .. 7.9 .. .. Population below minimum level of dietary energy consumption (%) .. .. .. .. 2. Achieve universal primary education 2015 target = net enrollment to 100 Net primary enrollment ratio (% of relevant age group) 99.4 .. 99.8 .. Percentage of cohort reaching grade 5 (%) .. .. 88.5 .. Youth literacy rate (% ages 15-24) 97.8 98.6 .. .. 3. Promote gender equality 2005 target = education ratio to 100 Ratio of girls to boys in primary and secondary education (%) 98.9 .. 103 .. Ratio of young literate females to males (% ages 15­24) 99.6 99.8 .. .. Share of women employed in the nonagricultural sector (%) 29.9 30.2 37.8 .. Proportion of seats held by women in national parliament (%) .. 4 .. .. 4. Reduce child mortality 2015 target = reduce 1990 under-five mortality by two-thirds Under 5 mortality rate (per 1,000) 31 25 22 21 Infant mortality rate (per 1,000 live births) 25 21 18 17 Immunization, measles (% of children under 12 months) 84 94 90 88 5. Improve maternal health 2015 target = reduce 1990 maternal mortality by three-fourths Maternal mortality ratio (modeled estimate, per 100,000 live births) .. .. 75 .. Births attended by skilled health staff (% of total) .. .. .. .. 6. Combat HIV/AIDS, malaria, and other diseases 2015 target = halt, and begin to reverse, AIDS, etc. Prevalence of HIV, female (% ages 15­24) .. .. .. .. Contraceptive prevalence rate (% of women ages 15­49) .. .. .. .. Number of children orphaned by HIV/AIDS .. .. .. .. Incidence of tuberculosis (per 100,000 people) .. .. 34 30.4 Tuberculosis cases detected under DOTS (%) .. 51 59 66 7. Ensure environmental sustainability 2015 target = various (see notes) Forest area (% of total land area) 45.5 .. 44.6 .. Nationally protected areas (% of total land area) .. 1.1 1.1 1.1 GDP per unit of energy use (PPP $ per kg oil equivalent) .. .. .. .. CO2 emissions (metric tons per capita) 1.1 1 0.9 .. Access to an improved water source (% of population) .. .. 47 .. Access to improved sanitation (% of population) .. .. 43 .. Access to secure tenure (% of population) .. .. .. .. 8. Develop a global partnership for development 2015 target = various (see notes) Youth unemployment rate (% of total labor force ages 15­24) .. .. .. .. Fixed line and mobile telephones (per 1,000 people) 57.6 87.2 212.9 228.7 Personal computers (per 1,000 people) .. .. 46.7 48.8 General indicators Population 736.0 thousand 770.0 thousand 817.0 thousand 823.0 thousand Gross national income (US$) 1.3 billion 1.9 billion 1.7 billion 1.7 billion GNI per capita (US$) 1,760.00 2,440.00 2,100.00 2,130.00 Adult literacy rate (% of people ages 15 and over) 88.6 91 .. .. Total fertility rate (births per woman) 3.1 3.3 2.8 2.6 Life expectancy at birth (years) 66.7 67.7 69.1 69.5 Aid (% of GNI) 3.9 2.3 1.6 1.9 External debt (% of GNI) 32 13.1 11.4 11.4 Investment (% of GDP) 14.3 13.6 13.5 .. Trade (% of GDP) 129.5 113 136.1 .. Source: World Development Indicators database, April 2004. Note: In some cases the data are for earlier or later years than those stated. Goal 1 targets: Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day. Halve, between 1990 and 2015, the proportion of people who suffer from hunger. Goal 2 target: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling. Goal 3 target: Eliminate gender disparity in primary and secondary education preferably by 2005 and to all levels of education no later than 2015. Goal 4 target: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate. Goal 5 target: Reduce by three-fourths, between 1990 and 2015, the maternal mortality ratio. Goal 6 targets: Have halted by 2015, and begun to reverse, the spread of HIV/AIDS. Have halted by 2015, and begun to reverse, the incidence of malaria and other major diseases. Goal 7 targets: Integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources. Halve, by 2015, the proportion of people without sustainable access to safe drinking water. By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers. Goal 8 targets: Develop further an open, rule-based, predictable, nondiscriminatory trading and financial system. Address the special needs of the least-developed countries. Address the spe- cial needs of landlocked countries and small-island developing states. Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term. In cooperation with developing countries, develop and implement strategies for decent and productive work for youth. In cooperation with pharma- ceutical companies, provide access to affordable, essential drugs in developing countries. In cooperation with the private sector, make available the benefits of new technologies, especially in- formation and communications. 4 2 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S FIJI Projects Financed by the World Bank (active between 1992 and 2003) 1988­92 - Road Upgrading Project (ADB) L2871 1989­97 - Third Telecommunications Project L3074 1990­99 - Housing Project L3188 1992­99 - Road Upgrading II Project L3491 Published Country-Specific Analytical and Advisory Activities Fiji: Informal Settlements ­ 27036 Japan Funded (fiscal 1998­00) Fiji: Management of External Reserves (TA) Fiji: Pacific Islands Stakeholder Participation in Development,Working Paper (1998) Fiji: Restoring Growth in a Changing Global Environment, Economic Report (1995) Fiji: Restructuring of National Bank of Fiji (TA) Fiji:Transport Planning ­ 27552 WBTF (fiscal 1999­02) 4 3 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S KIRIBATI Kiribati has managed its public revenues subsistence fishing and agriculture, copra well, but has been unable to encourage production, and small-scale service activities growth in private productive activities.With a around the capital city. Since 1995, the govern- 2003 GNI per capita of US$880, Kiribati is the ment has endeavored to encourage growth in second-poorest of the nine PMCs after the private activity, particularly in tourism, Solomon Islands. It is one of the most remote commercial fisheries, and small-scale activities of the PMCs, and its population of 96,000 is such as seaweed production and black pearl spread across an area roughly the size of mining in the outer islands. Growth has Europe.Prudent management of revenues from been constrained, however, by the large and phosphate exports (prior to 1980) and fishing ineffective public sector, barriers to foreign licenses has enabled Kiribati to build substan- ownership of land,distortionary price controls, tial external reserves (estimated at equivalent and other barriers to trade and investment. to 7 years of imports). This, in turn, enabled While Kiribati's social indicators have been maintenance of a stable economic environ- improving, they remain relatively low for the ment in the face of volatile financial flows.The region. The infant mortality in Kiribati, for government has established a significant example,is the highest among all PMCs and life public sector role in investment, employment, expectancy is the lowest. Limited economic and service delivery and the public sector is opportunities in the outer islands, moreover, estimated to account for more than 75 percent has led to squatter settlements and pressure on of formal sector employment. Private produc- urban services in the capital city. tive activities have been largely confined to 4 5 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 K I R I B A T I a t a G l a n c e Kiribati at a glance 8/20/03 8/20/03 East Lower- POVERTY and SOCIAL Asia & middle- Kiribati Pacific income Development diamond* 2002 Development diamond* Population, mid-year (millions) 0.09 1,838 2,411 Life expectancy GNI per capita (Atlas method, US$) 810 950 1,390 Life expectancy GNI (Atlas method, US$ billions) 0.08 1,740 3,352 Average annual growth, 1996-02 Population (%) 2.5 1.0 1.0 GNIGNI Gross Gross Labor force (%) .. 1.2 1.2 per per primary primary Most recent estimate (latest year available, 1996-02) capita capita enrollment enrollment Poverty (% of population below national poverty line) .. .. .. Urban population (% of total population) 39 38 49 Life expectancy at birth (years) 63 69 69 Infant mortality (per 1,000 live births) 50 33 30 Access to improved water source Child malnutrition (% of children under 5) .. 15 11 Access to improved water source Access to an improved water source (% of population) 48 76 81 Illiteracy(% of population age 15+) .. 13 13 Kiribati Kiribati Gross primary enrollment (% of school-age population) 128 106 111 Lower-middle-income group Male 127 105 111 Lower-middle-income group Female 129 106 110 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1982 1992 2001 2002 Economic ratios* GDP (US$ billions) 0.03 0.03 0.04 0.04 Gross domestic investment/GDP 63.3 56.2 .. .. Economic ratios* Trade Exports of goods and services/GDP 9.1 12.5 .. .. Gross domestic savings/GDP -44.1 -45.0 .. .. Trade Gross national savings/GDP 60.3 117.3 .. .. Current account balance/GDP .. 21.4 .. .. Domestic Interest payments/GDP .. .. .. .. Investment savings Domestic Investment Total debt/GDP .. .. .. .. savings Total debt service/exports .. .. .. .. Present value of debt/GDP .. .. .. .. Present value of debt/exports .. .. .. .. Indebtedness Indebtedness 1982-92 1992-02 2001 2002 2002-06 (average annual growth) Kiribati GDP 0.2 2.8 1.6 2.8 .. Kiribati Lower-middle-income group GDP per capita -2.0 0.5 -0.7 0.7 .. Lower-middle-income group Exports of goods and services .. .. .. .. .. STRUCTURE of the ECONOMY 1982 1992 2001 2002 Growth of investment and GDP (%) Growth of investment and GDP (%) (% of GDP) 8 Agriculture 26.2 25.1 .. .. 6 8 Industry 8.3 9.2 .. .. 4 Manufacturing 2.0 2.1 .. .. 2 4 Services 65.5 65.7 .. .. 0 -2 0 97 98 99 00 01 02 Private consumption 90.1 90.9 .. .. -4 General government consumption 54.0 54.1 .. .. -4 97 GDI 98 99 00 GDP 01 02 Imports of goods and services 116.5 113.8 .. .. GDI GDP 1982-92 1992-02 2001 2002 (average annual growth) Agriculture 1.7 .. .. .. Industry 1.2 .. .. .. Manufacturing -0.9 .. .. .. Services -0.7 .. .. .. Private consumption .. .. .. .. General government consumption .. .. .. .. Gross domestic investment .. .. .. .. Imports of goods and services .. .. .. .. Note: 2002 data are preliminary estimates. This table was produced from the Development Economics central database. * The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. 4 6 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S K I R I B A T I Kiribati PRICES and GOVERNMENT FINANCE 1982 1992 2001 2002 Inflation (%) Inflation (%) Domestic prices 5 (% change) 5 Consumer prices 5.5 4.0 .. .. Implicit GDP deflator 7.4 3.1 2.4 2.7 0 0 Government finance 97 98 99 00 01 02 (% of GDP, includes current grants) 97 98 99 00 01 02 Current revenue .. .. .. .. -5 -5 Current budget balance .. .. .. .. GDP deflator CPI Overall surplus/deficit .. .. .. .. GDP deflator CPI TRADE 1982 1992 2001 2002 Export and import levels (US$ mill.) (US$ millions) Export and import levels (US$ mill.) Total exports (fob) .. .. .. .. 40 Copra .. .. .. .. 40 Fish .. .. .. .. 30 30 Manufactures .. .. .. .. Total imports (cif) .. .. .. .. 20 20 Food .. .. .. .. 10 10 Fuel and energy .. .. .. .. Capital goods .. .. .. .. 0 0 96 99 00 01 02 Export price index (1995=100) .. .. .. .. 9697 9798 98 99 00 01 02 Import price index (1995=100) .. .. .. .. Exports Imports Exports Imports Terms of trade (1995=100) .. .. .. .. BALANCE of PAYMENTS 1982 1992 2001 2002 Current account balance to GDP (%) (US$ millions) Current account balance to GDP (%) Exports of goods and services 5 22 .. .. 30 Imports of goods and services 31 55 .. .. 30 Resource balance -26 -33 .. .. 20 20 Net income 6 13 .. .. Net current transfers 16 27 .. .. 10 10 Current account balance .. 7 .. .. 0 0 96 Financing items (net) .. 3 .. .. 97 98 99 00 01 02 Changes in net reserves 3 -11 .. .. -10 96 97 98 99 00 01 02 -10 Memo: Reserves including gold (US$ millions) .. .. .. .. Conversion rate (DEC, local/US$) 1.0 1.4 1.9 1.8 EXTERNAL DEBT and RESOURCE FLOWS 1982 1992 2001 2002 (US$ millions) Total debt outstanding and disbursed .. .. .. .. IBRD .. .. .. .. IDA .. .. .. .. Total debt service .. .. .. .. IBRD .. .. .. .. IDA .. .. .. .. Composition of net resource flows Official grants .. .. .. .. Official creditors .. .. .. .. Private creditors .. .. .. .. Foreign direct investment .. .. .. .. Portfolio equity .. .. .. .. World Bank program Commitments .. .. .. .. Disbursements .. .. .. .. Principal repayments .. .. .. .. Net flows .. .. .. .. Interest payments .. .. .. .. Net transfers .. .. .. .. Note: This table was produced from the Development Economics central database. 8/20/03 4 7 K I R I B A T I M i l l e n n i u m D e v e l o p m e n t G o a l s 1990 1995 2001 2002 1. Eradicate extreme poverty and hunger 2015 target = halve 1990 $1 a day poverty and malnutrition rates Population below $1 a day (%) .. .. .. .. Poverty gap at $1 a day (%) .. .. .. .. Percentage share of income or consumption held by poorest 20% .. .. .. .. Prevalence of child malnutrition (% of children under 5) .. .. .. .. Population below minimum level of dietary energy consumption (%) .. .. .. .. 2. Achieve universal primary education 2015 target = net enrollment to 100 Net primary enrollment ratio (% of relevant age group) .. .. .. .. Percentage of cohort reaching grade 5 (%) 97.8 88.9 .. .. Youth literacy rate (% ages 15­24) .. .. .. .. 3. Promote gender equality 2005 target = education ratio to 100 Ratio of girls to boys in primary and secondary education (%) .. .. .. .. Ratio of young literate females to males (% ages 15­24) .. .. .. .. Share of women employed in the nonagricultural sector (%) .. .. .. .. Proportion of seats held by women in national parliament (%) .. 0 .. .. 4. Reduce child mortality 2015 target = reduce 1990 under-five mortality by two-thirds Under 5 mortality rate (per 1,000) 88 77 70 69 Infant mortality rate (per 1,000 live births) 65 57 52 51 Immunization, measles (% of children under 12 months) 75 47 76 88 5. Improve maternal health 2015 target = reduce 1990 maternal mortality by three-fourths Maternal mortality ratio (modeled estimate, per 100,000 live births) .. .. .. .. Births attended by skilled health staff (% of total) .. 72 .. .. 6. Combat HIV/AIDS, malaria, and other diseases 2015 target = halt, and begin to reverse, AIDS, etc. Prevalence of HIV, female (% ages 15­24) .. .. .. .. Contraceptive prevalence rate (% of women ages 15­49) .. .. .. .. Number of children orphaned by HIV/AIDS .. .. .. .. Incidence of tuberculosis (per 100,000 people) .. .. 84 90.6 Tuberculosis cases detected under DOTS (%) .. 35 200 232.6 7. Ensure environmental sustainability 2015 target = various (see notes) Forest area (% of total land area) 38.4 .. 38.4 .. Nationally protected areas (% of total land area) .. .. 36.6 36.6 GDP per unit of energy use (PPP $ per kg oil equivalent) .. .. .. .. CO2 emissions (metric tons per capita) 0.3 0.3 0.3 .. Access to an improved water source (% of population) .. .. 48 .. Access to improved sanitation (% of population) .. .. 48 .. Access to secure tenure (% of population) .. .. .. .. 8. Develop a global partnership for development 2015 target = various (see notes) Youth unemployment rate (% of total labor force ages 15­24) .. .. .. .. Fixed line and mobile telephones (per 1,000 people) 16.6 26.1 47.9 57.3 Personal computers (per 1,000 people) .. .. 10.5 11.4 General indicators Population 72,000.00 80,000.00 93,000.00 95,000.00 Gross national income ($) 52.3 million 75.4 million 99.1 million 90.9 million GNI per capita ($) 730 940 1,070.00 960 Adult literacy rate (% of people ages 15 and over) .. .. .. .. Total fertility rate (births per woman) 4 4.5 3.8 3.6 Life expectancy at birth (years) 56.8 59.4 61.9 62.8 Aid (% of GNI) 41.9 19.3 13.3 21.6 External debt (% of GNI) .. .. .. .. Investment (% of GDP) 93.1 .. .. .. Trade (% of GDP) 158.9 104.6 94.1 .. Source: World Development Indicators database, April 2004. Note: In some cases the data are for earlier or later years than those stated. Goal 1 targets: Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day. Halve, between 1990 and 2015, the proportion of people who suffer from hunger. Goal 2 target: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling. Goal 3 target: Eliminate gender disparity in primary and secondary education preferably by 2005 and to all levels of education no later than 2015. Goal 4 target: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate. Goal 5 target: Reduce by three-fourths, between 1990 and 2015, the maternal mortality ratio. Goal 6 targets: Have halted by 2015, and begun to reverse, the spread of HIV/AIDS. Have halted by 2015, and begun to reverse, the incidence of malaria and other major diseases. Goal 7 targets: Integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources. Halve, by 2015, the proportion of people without sustainable access to safe drinking water. By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers. Goal 8 targets: Develop further an open, rule-based, predictable, nondiscriminatory trading and financial system. Address the special needs of the least developed countries. Address the spe- cial needs of landlocked countries and small-island developing states. Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term. In cooperation with developing countries, develop and implement strategies for decent and productive work for youth. In cooperation with pharma- ceutical companies, provide access to affordable, essential drugs in developing countries. In cooperation with the private sector, make available the benefits of new technologies, especially in- formation and communications. 4 8 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S KIRIBATI Published Country-Specific Analytical and Advisory Activities Kiribati:Adaptation Project Preparation Kiribati: Public Expenditure Review TA (fiscal 1998) Kiribati:Pacific Islands Stakeholder Participation in Development (Working Paper series),1998 Kiribati: Management of Revenue Reserve Fund TA 4 9 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S MARSHALL ISLANDS While the Republic of the Marshall Islands financed by commercial borrowing in the early has been reducing its dependence on U.S. 1990s, failed to stimulate a supply response grants, it has not yet been able to develop a and led to a financial crisis in 1995. In 1996, viable economy. The Republic of the Marshall the government began implementing an ADB- Islands (RMI) has been a beneficiary of grants supported reform program aimed at fiscal from the United States under the Compact of stabilization, public sector reform, and private Free Association since 1986. During the initial sector development.While some progress was 15-year agreement, it was expected that RMI made in fiscal stabilization and public sector would generate economic self-sufficiency. downsizing, the program had lost momentum While the overall level of aid dependence has by 1999 and was not fully implemented [see been reduced, this goal has not yet been ADB report]. Estimates indicate that the reached and the economy continues to be unemployment rate is around 30 percent, and dependent on Compact funding (which according to ADB, 20 percent of the people accounts for approximately half of GDP each remain in poverty. Although a new 20-year year).With a decline in the level of grants over compact agreement with the U.S.has eased the the decade, GDP dropped by ­1 percent a year immediate fiscal pressure, the major develop- during a 10-year period. Economic activities ment challenge for RMI remains to stimulate largely amount to services that are driven by private activity in its main productive sectors: public expenditure and a U.S.army installation. fishing,tourism and agriculture.Along with the Public administration accounts for 30 percent disincentive effects of high levels of transfers, of GDP. Manufacturing accounts for just key obstacles to private investment and growth 1.5 percent of GDP and is limited to a subsidy- include one of the highest minimum-wage dependent copra processing plant and a tuna levels in the Pacific; extensive public involve- loin processing plant established in 2000. ment in commercial activities; insecure land During the 1990s,the government made several tenure; cumbersome investment approval attempts to reduce its dependence on grants processes, and an extensive reserve list for and to generate a more sustainable economy. small-scale activities that discourages foreign Heavy public expenditures on infrastructure, investment. 5 1 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 Marshall Islands at a glance M A R S H A L L I S L A N D S a t a G l a n c e 9/15/04 9/15/04 East Lower- POVERTY and SOCIAL Marshall Asia & middle- Islands Pacific income Development diamond* 2003 Development diamond* Population, mid-year (millions) 0.05 1,855 2,655 Life expectancy GNI per capita (Atlas method, US$) 2,710 1,080 1,480 Life expectancy GNI (Atlas method, US$ billions) 0.14 2,011 3,934 Average annual growth, 1997-03 Population (%) 1.0 1.0 0.9 GNI GNI Gross Gross Labor force (%) .. 1.1 1.2 perper primary primary Most recent estimate (latest year available, 1997-03) capita capita enrollment enrollment Poverty (% of population below national poverty line) .. .. .. Urban population (% of total population) 66 40 50 Life expectancy at birth (years) 65 69 69 Infant mortality(per 1,000 live births) 54 32 32 Access to improved water source Child malnutrition (% of children under 5) .. 15 11 Access to improved water source Access to an improved water source (% of population) .. 76 81 Illiteracy(% of population age 15+) .. 10 10 Marshall Islands Gross primary enrollment (% of school-age population) .. 111 112 Marshall Islands Lower-middle-income group Male .. 112 113 Lower-middle-income group Female .. 111 111 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1983 1993 2002 2003 Economic ratios* ratios* GDP (US$ billions) 0.04 0.09 0.11 0.11 Gross domestic investment/GDP .. .. .. .. Trade Trade Exports of goods and services/GDP .. .. .. .. Gross domestic savings/GDP .. .. .. .. Gross national savings/GDP .. .. .. .. Current account balance/GDP .. 0.3 30.1 .. Domestic Domestic Interest payments/GDP .. .. .. .. Investment Investment savings savings Total debt/GDP .. .. .. .. Total debt service/exports .. .. .. .. Present value of debt/GDP .. .. .. .. Present value of debt/exports .. .. .. .. Indebtedness Indebtedness 1983-93 1993-03 2002 2003 2003-07 (average annual growth) Marshall Islands Marshall Islands GDP 6.4 -2.1 4.0 2.0 .. GDP per capita 2.6 -3.2 4.0 2.0 .. Lower-middle-income group Lower-middle-income group Exports of goods and services .. .. .. .. .. STRUCTURE of the ECONOMY 1983 1993 2002 2003 Growth of investment and GDP (%) (% of GDP) Growth of investment and GDP (%) 5 Agriculture .. 13.2 .. .. Industry .. 11.7 .. .. 0 5 Manufacturing .. 0.7 .. .. 98 99 00 01 02 03 -5 Services .. 75.2 .. .. 0 -10 -5 Private consumption .. .. .. .. -15 98 99 00 01 02 03 General government consumption .. .. .. .. -10 GDI GDP Imports of goods and services .. .. .. .. -15 1983-93 1993-03 2002 2003 GDI GDP (average annual growth) Agriculture .. .. .. .. Industry .. .. .. .. Manufacturing .. .. .. .. Services .. .. .. .. Private consumption .. .. .. .. General government consumption .. .. .. .. Gross domestic investment .. .. .. .. Imports of goods and services .. .. .. .. Note: 2003 data are preliminary estimates. This table was produced from the Development Economics central database. * The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. 5 2 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S M A R S H A L L I S L A N D S Marshall Islands PRICES and GOVERNMENT FINANCE 1983 1993 2002 2003 Inflation (%) Inflation (%) Domestic prices 6 (% change) 6 Consumer prices .. 5.0 0.8 .. 4 4 Implicit GDP deflator 2.8 5.0 0.2 -1.9 2 2 Government finance 0 0 98 99 00 01 02 03 (% of GDP, includes current grants) -2 -2 98 99 00 01 02 03 Current revenue .. 82.5 78.9 .. -4 -4 Current budget balance .. 5.7 23.5 .. GDP deflator GDP deflator CPI CPI Overall surplus/deficit .. -15.0 9.1 .. TRADE 1983 1993 2002 2003 Export and import levels (US$ mill.) Export and import levels (US$ mill.) (US$ millions) Total exports (fob) .. 8 .. .. 75 75 n.a. .. .. .. .. n.a. .. .. .. .. 50 50 Manufactures .. .. .. .. Total imports (cif) .. 61 .. .. 25 Food .. .. .. .. 25 Fuel and energy .. .. .. .. Capital goods .. .. .. .. 00 97 98 99 00 01 02 03 Export price index (1995=100) .. .. .. .. 97 98 99 00 01 02 03 Import price index (1995=100) .. .. .. .. Exports Imports Terms of trade (1995=100) .. .. .. .. Exports Imports BALANCE of PAYMENTS 1983 1993 2002 2003 Current account balance to GDP (%) (US$ millions) Current account balance to GDP (%) Exports of goods and services .. .. .. .. 40 40 Imports of goods and services .. .. .. .. Resource balance .. .. .. .. 30 30 Net income .. 2 16 .. 20 20 Net current transfers .. .. .. .. 10 10 Current account balance .. 0 32 .. 0 Financing items (net) .. -10 -46 .. 0 97 98 99 00 01 02 03 Changes in net reserves .. 10 14 .. 97 98 99 00 01 02 03 -10 -10 Memo: Reserves including gold (US$ millions) .. .. .. .. Conversion rate (DEC, local/US$) 1.0 1.0 1.0 1.0 EXTERNAL DEBT and RESOURCE FLOWS 1983 1993 2002 2003 (US$ millions) Total debt outstanding and disbursed .. .. .. .. IBRD .. .. .. .. IDA .. .. .. .. Total debt service .. .. .. .. IBRD .. .. .. .. IDA .. .. .. .. Composition of net resource flows Official grants .. .. .. .. Official creditors .. .. .. .. Private creditors .. .. .. .. Foreign direct investment .. .. .. .. Portfolio equity .. .. .. .. World Bank program Commitments .. .. .. .. Disbursements .. .. .. .. Principal repayments .. .. .. .. Net flows .. .. .. .. Interest payments .. .. .. .. Net transfers .. .. .. .. Note: This table was produced from the Development Economics central database. 9/15/04 5 3 M A R S H A L L I S L A N D S M i l l e n n i u m D e v e l o p m e n t G o a l s 1990 1995 2001 2002 1. Eradicate extreme poverty and hunger 2015 target = halve 1990 $1 a day poverty and malnutrition rates Population below $1 a day (%) .. .. .. .. Poverty gap at $1 a day (%) .. .. .. .. Percentage share of income or consumption held by poorest 20% .. .. .. .. Prevalence of child malnutrition (% of children under 5) .. .. .. .. Population below minimum level of dietary energy consumption (%) .. .. .. .. 2. Achieve universal primary education 2015 target = net enrollment to 100 Net primary enrollment ratio (% of relevant age group) .. .. .. .. Percentage of cohort reaching grade 5 (%) .. .. .. .. Youth literacy rate (% ages 15­24) .. .. .. .. 3. Promote gender equality 2005 target = education ratio to 100 Ratio of girls to boys in primary and secondary education (%) .. .. .. .. Ratio of young literate females to males (% ages 15­24) .. .. .. .. Share of women employed in the nonagricultural sector (%) .. .. .. .. Proportion of seats held by women in national parliament (%) .. 3 .. .. 4. Reduce child mortality 2015 target = reduce 1990 under-five mortality by two-thirds Under 5 mortality rate (per 1,000) 92 81 68 66 Infant mortality rate (per 1,000 live births) 63 59 55 54 Immunization, measles (% of children under 12 months) 52 57 89 80 5. Improve maternal health 2015 target = reduce 1990 maternal mortality by three-fourths Maternal mortality ratio (modeled estimate, per 100,000 live births) .. .. .. .. Births attended by skilled health staff (% of total) .. .. .. .. 6. Combat HIV/AIDS, malaria, and other diseases 2015 target = halt, and begin to reverse, AIDS, etc. Prevalence of HIV, female (% ages 15­24) .. .. .. .. Contraceptive prevalence rate (% of women ages 15­49) .. .. .. .. Number of children orphaned by HIV/AIDS .. .. .. .. Incidence of tuberculosis (per 100,000 people) .. .. 84 90.6 Tuberculosis cases detected under DOTS (%) .. .. 75 84.4 7. Ensure environmental sustainability 2015 target = various (see notes) Forest area (% of total land area) .. .. .. .. Nationally protected areas (% of total land area) .. .. .. .. GDP per unit of energy use (PPP $ per kg oil equivalent) .. .. .. .. CO2 emissions (metric tons per capita) .. .. .. .. Access to an improved water source (% of population) .. .. .. .. Access to improved sanitation (% of population) .. .. .. .. Access to secure tenure (% of population) .. .. .. .. 8. Develop a global partnership for development 2015 target = various (see notes) Youth unemployment rate (% of total labor force ages 15­24) .. .. .. .. Fixed line and mobile telephones (per 1,000 people) 11.2 71.9 85.6 87.2 Personal computers (per 1,000 people) 0.1 0.3 45.8 53 General indicators Population 46,000.00 49,000.00 53,000.00 53,000.00 Gross national income ($) 81.2 million 113.5 million 117.5 million 126.3 million GNI per capita ($) 1,760.00 2,320.00 2,220.00 2,380.00 Adult literacy rate (% of people ages 15 and over) .. .. .. .. Total fertility rate (births per woman) .. .. .. .. Life expectancy at birth (years) 70.5 67.9 65.2 .. Aid (% of GNI) 0.3 33.2 60.9 48.4 External debt (% of GNI) .. .. .. .. Investment (% of GDP) .. .. .. .. Trade (% of GDP) .. .. .. .. Source: World Development Indicators database, April 2004. Note: In some cases the data are for earlier or later years than those stated. Goal 1 targets: Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day. Halve, between 1990 and 2015, the proportion of people who suffer from hunger. Goal 2 target: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling. Goal 3 target: Eliminate gender disparity in primary and secondary education preferably by 2005 and to all levels of education no later than 2015. Goal 4 target: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate. Goal 5 target: Reduce by three-fourths, between 1990 and 2015, the maternal mortality ratio. Goal 6 targets: Have halted by 2015, and begun to reverse, the spread of HIV/AIDS. Have halted by 2015, and begun to reverse, the incidence of malaria and other major diseases. Goal 7 targets: Integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources. Halve, by 2015, the proportion of people without sustainable access to safe drinking water. By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers. Goal 8 targets: Develop further an open, rule-based, predictable, nondiscriminatory trading and financial system. Address the special needs of the least developed countries. Address the spe- cial needs of landlocked countries and small-island developing states. Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term. In cooperation with developing countries, develop and implement strategies for decent and productive work for youth. In cooperation with pharma- ceutical companies, provide access to affordable, essential drugs in developing countries. In cooperation with the private sector, make available the benefits of new technologies, especially in- formation and communications. 5 4 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S FEDERATED STATES OF MICRONESIA Micronesia has made some progress in has garment manufacturing and tourism encouraging private sector activity, but still industries, a larger share of private sector remains highly dependent on U.S. funding. employment, and a lower differential between The Federated States of Micronesia (FSM) public and private sector wages. In 1996, FSM comprises four states, each with substantial initiated a Public Sector Reform Program, autonomy in the provision of economic and supported by ADB, in an effort to reduce the social services to their respective populations. dominant role of the public sector in the As with the the Marshall Islands, FSM has economy.While the program achieved initial received significant U.S. Compact funding success in reducing the wage bill, some of since independence. A public sector-driven these gains were subsequently eroded [ADB]. economy has emerged, and in recent years, Lack of alternative employment opportunities government expenditure accounted for about in the private sector proved a key obstacle to 70 percent of GDP and public sector wages are the downsizing effort. FSM's key challenges more than double private sector wages. Some remain to gradually reduce dependence on U.S. states show considerably more diversity than grants and encourage growth in private others, however.The state of Yap, in particular, commercial activity in fisheries and tourism. 5 5 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 Micronesia, Fed. Sts. at a glance M I C R O N E S I A , F E D . S T S . a t a G l a n c e 9/15/04 9/15/04 East Lower- POVERTY and SOCIAL Micronesia, Asia & middle- Fed. Sts. Pacific income Development diamond* 2003 Development diamond* Population, mid-year (millions) 0.13 1,855 2,655 Life expectancy GNI per capita (Atlas method, US$) 2,090 1,080 1,480 Life expectancy GNI (Atlas method, US$ billions) 0.26 2,011 3,934 Average annual growth, 1997-03 Population (%) 2.0 1.0 0.9 GNI GNI Gross Gross Labor force (%) .. 1.1 1.2 per per primary primary Most recent estimate (latest year available, 1997-03) capita capita enrollment enrollment Poverty (% of population below national poverty line) .. .. .. Urban population (% of total population) 29 40 50 Life expectancy at birth (years) 69 69 69 Infant mortality(per 1,000 live births) 20 32 32 Access to improved water source Child malnutrition (% of children under 5) .. 15 11 Access to improved water source Access to an improved water source (% of population) .. 76 81 Illiteracy (% of population age 15+) .. 10 10 Micronesia, Fed. Sts. Micronesia, Fed. Sts. Gross primary enrollment (% of school-age population) .. 111 112 Lower-middle-income group Male .. 112 113 Lower-middle-income group Female .. 111 111 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1983 1993 2002 2003 Economic ratios* GDP (US$ billions) 0.11 0.20 0.23 0.24 Economic ratios* Gross domestic investment/GDP 37.7 .. .. .. Trade Exports of goods and services/GDP 3.4 .. .. .. Trade Gross domestic savings/GDP -43.2 .. .. .. Gross national savings/GDP .. .. .. .. Current account balance/GDP .. -6.6 .. .. Domestic Domestic Interest payments/GDP .. .. .. .. Investment savings Investment savings Total debt/GDP .. .. .. .. Total debt service/exports .. .. .. .. Present value of debt/GDP .. .. .. .. Present value of debt/exports .. .. .. .. Indebtedness Indebtedness 1983-93 1993-03 2002 2003 2003-07 Micronesia, Fed. Sts. (average annual growth) GDP 4.4 -0.3 0.8 2.4 .. Lower-middle-income group Micronesia, Fed. Sts. GDP per capita 2.2 -2.2 -0.8 -0.1 .. Lower-middle-income group Exports of goods and services .. .. .. .. .. STRUCTURE of the ECONOMY 1983 1993 2002 2003 Growth of investment and GDP (%) (% of GDP) Growth of investment and GDP (%) 5 Agriculture 44.5 .. .. .. Industry .. .. .. .. 05 Manufacturing 0.4 .. .. .. 0 98 99 00 01 02 03 Services .. .. .. .. -5 -5 98 99 00 01 02 03 Private consumption 84.9 .. .. .. -10 -10 GDI GDP General government consumption 58.3 .. .. .. GDI GDP Imports of goods and services 84.3 .. .. .. 1983-93 1993-03 2002 2003 (average annual growth) Agriculture .. .. .. .. Industry .. .. .. .. Manufacturing .. .. .. .. Services .. .. .. .. Private consumption .. .. .. .. General government consumption .. .. .. .. Gross domestic investment .. .. .. .. Imports of goods and services .. .. .. .. Note: 2003 data are preliminary estimates. This table was produced from the Development Economics central database. * The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. 5 6 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S M I C R O N E S I A Micronesia, Fed. Sts. PRICES and GOVERNMENT FINANCE 1983 1993 2002 2003 Inflation (%) Inflation (%) Domestic prices 3 (% change) 3 Consumer prices .. .. .. .. 2 2 Implicit GDP deflator .. 3.0 0.0 1.5 1 1 Government finance 0 (% of GDP, includes current grants) 0 Current revenue .. 79.1 69.1 .. 98 9899 99 00 00 01 01 0202 03 03 Current budget balance .. 16.8 13.5 .. GDP deflator CPI GDP deflator CPI Overall surplus/deficit .. -4.4 2.4 .. TRADE 1983 1993 2002 2003 Export and import levels (US$ mill.) (US$ millions) Export and import levels (US$ mill.) Total exports (fob) 2 30 .. .. 100 n.a. .. .. .. .. 100 Fish .. 25 .. .. 75 75 Manufactures .. .. .. .. 50 Total imports (cif) 49 109 .. .. 50 Food .. .. .. .. 25 Fuel and energy .. .. .. .. 25 Capital goods .. .. .. .. 0 0 97 98 99 00 01 02 03 Export price index (1995=100) .. .. .. .. 97Exports 99 98 00 01 02 03 Import price index (1995=100) .. .. .. .. Imports Terms of trade (1995=100) .. .. .. .. Exports Imports BALANCE of PAYMENTS 1983 1993 2002 2003 Current account balance to GDP (%) (US$ millions) Current account balance to GDP (%) Exports of goods and services .. .. .. .. 5 Imports of goods and services .. .. .. .. 5 Resource balance .. .. .. .. 0 Net income .. -16 -14 .. 0 97 98 99 00 01 02 03 Net current transfers .. 123 99 .. 97 98 99 00 01 02 03 Current account balance .. -13 .. .. -5 -5 Financing items (net) .. 15 .. .. Changes in net reserves .. -2 24 .. -10 -10 Memo: Reserves including gold (US$ millions) .. .. .. .. Conversion rate (DEC, local/US$) 1.0 1.0 1.0 1.0 EXTERNAL DEBT and RESOURCE FLOWS 1983 1993 2002 2003 (US$ millions) Total debt outstanding and disbursed .. .. .. .. IBRD .. .. .. .. IDA .. .. .. .. Total debt service .. .. .. .. IBRD .. .. .. .. IDA .. .. .. .. Composition of net resource flows Official grants .. .. .. .. Official creditors .. .. .. .. Private creditors .. .. .. .. Foreign direct investment .. .. .. .. Portfolio equity .. .. .. .. World Bank program Commitments .. .. .. .. Disbursements .. .. .. .. Principal repayments .. .. .. .. Net flows .. .. .. .. Interest payments .. .. .. .. Net transfers .. .. .. .. Note: This table was produced from the Development Economics central database. 9/15/04 5 7 M I C R O N E S I A , F E D . S T S . M i l l e n n i u m D e v e l o p m e n t G o a l s 1990 1995 2001 2002 1. Eradicate extreme poverty and hunger 2015 target = halve 1990 $1 a day poverty and malnutrition rates Population below $1 a day (%) .. .. .. .. Poverty gap at $1 a day (%) .. .. .. .. Percentage share of income or consumption held by poorest 20% .. .. .. .. Prevalence of child malnutrition (% of children under 5) .. .. .. .. Population below minimum level of dietary energy consumption (%) .. .. .. .. 2. Achieve universal primary education 2015 target = net enrollment to 100 Net primary enrollment ratio (% of relevant age group) .. .. .. .. Percentage of cohort reaching grade 5 (%) .. .. .. .. Youth literacy rate (% ages 15-24) .. .. .. .. 3. Promote gender equality 2005 target = education ratio to 100 Ratio of girls to boys in primary and secondary education (%) .. .. .. .. Ratio of young literate females to males (% ages 15-24) .. .. .. .. Share of women employed in the nonagricultural sector (%) .. .. .. .. Proportion of seats held by women in national parliament (%) .. 0 .. .. 4. Reduce child mortality 2015 target = reduce 1990 under-five mortality by two-thirds Under 5 mortality rate (per 1,000) 31 26 24 24 Infant mortality rate (per 1,000 live births) 26 22 20 20 Immunization, measles (% of children under 12 months) 81 90 84 84 5. Improve maternal health 2015 target = reduce 1990 maternal mortality by three-fourths Maternal mortality ratio (modeled estimate, per 100,000 live births) .. .. .. .. Births attended by skilled health staff (% of total) .. .. 92.8 .. 6. Combat HIV/AIDS, malaria, and other diseases 2015 target = halt, and begin to reverse, AIDS, etc. Prevalence of HIV, female (% ages 15­24) .. .. .. .. Contraceptive prevalence rate (% of women ages 15­49) .. .. .. .. Number of children orphaned by HIV/AIDS .. .. .. .. Incidence of tuberculosis (per 100,000 people) .. .. 84 90.6 Tuberculosis cases detected under DOTS (%) .. 16 17 49.8 7. Ensure environmental sustainability 2015 target = various (see notes) Forest area (% of total land area) .. .. .. .. Nationally protected areas (% of total land area) .. .. .. .. GDP per unit of energy use (PPP $ per kg oil equivalent) .. .. .. .. CO2 emissions (metric tons per capita) .. .. .. .. Access to an improved water source (% of population) .. .. .. .. Access to improved sanitation (% of population) .. .. .. .. Access to secure tenure (% of population) .. .. .. .. 8. Develop a global partnership for development 2015 target = various (see notes) Youth unemployment rate (% of total labor force ages 15­24) .. .. .. .. Fixed line and mobile telephones (per 1,000 people) 25 73.7 86.7 .. Personal computers (per 1,000 people) .. .. .. .. General indicators Population 96,000.00 107.0 thousand 120.0 thousand 122.0 thousand Gross national income ($) 169.2 million 242.5 million 236.2 million 240.5 million GNI per capita ($) 1,760.00 2,270.00 1,970.00 1,970.00 Adult literacy rate (% of people ages 15 and over) .. .. .. .. Total fertility rate (births per woman) 4.8 4.2 3.7 3.5 Life expectancy at birth (years) 63.5 66 68 68.6 Aid (% of GNI) 0.2 32.4 56.9 45.6 External debt (% of GNI) .. .. .. .. Investment (% of GDP) .. .. .. .. Trade (% of GDP) .. .. .. .. Source: World Development Indicators database, April 2004. Note: In some cases the data are for earlier or later years than those stated. Goal 1 targets: Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day. Halve, between 1990 and 2015, the proportion of people who suffer from hunger. Goal 2 target: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling. Goal 3 target: Eliminate gender disparity in primary and secondary education preferably by 2005 and to all levels of education no later than 2015. Goal 4 target: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate. Goal 5 target: Reduce by three-fourths, between 1990 and 2015, the maternal mortality ratio. Goal 6 targets: Have halted by 2015, and begun to reverse, the spread of HIV/AIDS. Have halted by 2015, and begun to reverse, the incidence of malaria and other major diseases. Goal 7 targets: Integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources. Halve, by 2015, the proportion of people without sustainable access to safe drinking water. By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers. Goal 8 targets: Develop further an open, rule-based, predictable, nondiscriminatory trading and financial system. Address the special needs of the least developed countries. Address the spe- cial needs of landlocked countries and small-island developing states. Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term. In cooperation with developing countries, develop and implement strategies for decent and productive work for youth. In cooperation with pharma- ceutical companies, provide access to affordable, essential drugs in developing countries. In cooperation with the private sector, make available the benefits of new technologies, especially in- formation and communications. 5 8 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S MICRONESIA Published Country-Specific Analytical and Advisory Activity Micronesia: Fisheries TA (FY94­96) 5 9 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S PALAU Significant U.S. grants have enabled Palau to productive activity is tourism.A key challenge maintain a high per capita income, although for Palau is to strengthen its fiscal management challenges remain to ensure self-reliance as 2009 approaches,in order to ensure real per after 2009. Palau is the smallest member of the capita growth of the trust fund. The govern- World Bank, with a 2003 population of 20,000 ment is also committed to increasing private people.Following independence in 1994,Palau sector activity, particularly tourism, in order to entered into a Compact of Free Association achieve economic self-reliance. Among the with the U.S. that provides Palau with large constraints at present are limited flight connec- grant transfers until 2009 and establishes a tions and high airfares; a restrictive and trust fund for use after Compact grants cease. cumbersome foreign investment regime, and The high level of Compact funds has made difficult access to land.Several steps have been Palau the wealthiest of the nine PMCs, with a initiated to address these issues including 2003 per capita income of $7,500. Palau establishing a land lease system for foreign maintains a very open economy, with no investors, establishing a Public Land Bank, restrictions on international current and amending the foreign investment law, and capital account transactions, and most imports enabling competition in air flights. are subject to a 3 percent tariff rate.The main 6 1 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 Palau at a glance P A L A U a t a G l a n c e 9/15/04 9/15/04 East Upper- POVERTY and SOCIAL Asia & middle- Palau Pacific income Development diamond* 2003 Development diamond* Population, mid-year(millions) 0.02 1,855 335 Life expectancy GNI per capita(Atlas method, US$) 7,500 1,080 5,340 Life expectancy GNI(Atlas method, US$ billions) 0.15 2,011 1,788 Average annual growth, 1997-03 Population(%) 1.8 1.0 1.2 GNI GNI Gross Gross Labor force(%) .. 1.1 1.8 per per primary primary Most recent estimate (latest year available, 1997-03) capita capita enrollment enrollment Poverty(% of population below national poverty line) .. .. .. Urban population(% of total population) 69 40 76 Life expectancy at birth(years) 70 69 73 Infant mortality(per 1,000 live births) 24 32 19 Access to improved water source Child malnutrition(% of children under 5) .. 15 .. Access to improved water source Access to an improved water source(% of population) 79 76 89 Palau Illiteracy(% of population age 15+) .. 10 9 Upper-middle-income group Palau Gross primary enrollment (% of school-age population) .. 111 104 Male .. 112 104 Upper-middle-income group Female .. 111 104 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1983 1993 2002 2003 Economic ratios* GDP (US$ billions) .. 0.08 0.13 0.13 Economic ratios* Gross domestic investment/GDP .. .. .. .. Trade Exports of goods and services/GDP .. 23.3 16.9 .. Gross domestic savings/GDP .. .. .. .. Trade Gross national savings/GDP .. .. .. .. Current account balance/GDP .. 10.7 -12.8 .. Domestic Domestic Interest payments/GDP .. .. .. .. Investment savings Investment Total debt/GDP .. .. .. .. savings Total debt service/exports .. .. .. .. Present value of debt/GDP .. .. .. .. Present value of debt/exports .. .. .. .. Indebtedness Indebtedness 1983-93 1993-03 2002 2003 2003-07 Palau (average annual growth) Palau Upper-middle-income group GDP .. 2.8 1.1 1.5 .. GDP per capita .. 0.5 1.1 1.5 .. Upper-middle-income group Exports of goods and services .. .. .. .. .. STRUCTURE of the ECONOMY 1983 1993 2002 2003 Growth of investment and GDP (%) (% of GDP) Growth of investment and GDP (%) 5 Agriculture .. 10.6 .. .. Industry .. 8.7 .. .. 05 Manufacturing .. 0.7 .. .. 0 98 99 00 01 02 03 Services .. 80.7 .. .. -5 98 99 00 01 02 03 -5 Private consumption .. .. .. .. -10 -10 GDI GDP General government consumption .. .. .. .. GDI GDP Imports of goods and services .. 55.6 82.4 .. 1983-93 1993-03 2002 2003 (average annual growth) Agriculture .. .. .. .. Industry .. .. .. .. Manufacturing .. .. .. .. Services .. .. .. .. Private consumption .. .. .. .. General government consumption .. .. .. .. Gross domestic investment .. .. .. .. Imports of goods and services .. .. .. .. Note: 2003 data are preliminary estimates. This table was produced from the Development Economics central database. * The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. 6 2 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S P A L A U Palau PRICES and GOVERNMENT FINANCE 1982 1992 2001 2002 Inflation (%) Inflation (%) Domestic prices 4 (% change) 3 Consumer prices .. .. .. .. 3 2 Implicit GDP deflator .. 5.0 2.6 3.0 2 1 Government finance 1 0 (% of GDP, includes current grants) 0 Current revenue .. .. .. .. 97 98 99 02 97 98 99 0000 01 01 02 Current budget balance .. .. .. .. GDP deflator GDP deflator CPI CPI Overall surplus/deficit .. -3.6 50.2 .. TRADE 1982 1992 2001 2002 Export and import levels (US$ mill.) Export and import levels (US$ mill.) (US$ millions) Total exports (fob) .. .. .. .. 100 100 n.a. .. .. .. .. n.a. .. .. .. .. 75 75 Manufactures .. .. .. .. 50 50 Total imports (cif) .. .. .. .. Food .. .. .. .. 25 25 Fuel and energy .. .. .. .. Capital goods .. .. .. .. 00 96 97 98 99 00 01 02 Export price index (1995=100) .. .. .. .. 96 97 98 99 00 01 02 Import price index (1995=100) .. .. .. .. Exports Imports Terms of trade (1995=100) .. .. .. .. Exports Imports BALANCE of PAYMENTS 1982 1992 2001 2002 Current account balance to GDP (%) Current account balance to GDP (%) (US$ millions) Exports of goods and services .. 42 73 .. 15 20 Imports of goods and services .. 49 121 .. 10 5 Resource balance .. -7 -48 .. 10 0 -5 Net income .. 0 14 .. 0 96 97 98 99 00 01 02 -10 Net current transfers .. -4 18 .. -15 -10 96 97 98 99 00 01 02 -20 Current account balance .. -10 -16 .. -25 -20 -30 Financing items (net) .. .. .. .. -35 -30 Changes in net reserves .. .. .. .. -40 -40 Memo: Reserves including gold (US$ millions) .. .. .. .. Conversion rate (DEC, local/US$) 1.0 1.0 1.0 1.0 EXTERNAL DEBT and RESOURCE FLOWS 1982 1992 2001 2002 (US$ millions) Total debt outstanding and disbursed .. .. .. .. IBRD .. .. .. .. IDA .. .. .. .. Total debt service .. .. .. .. IBRD .. .. .. .. IDA .. .. .. .. Composition of net resource flows Official grants .. .. .. .. Official creditors .. .. .. .. Private creditors .. .. .. .. Foreign direct investment .. .. .. .. Portfolio equity .. .. .. .. World Bank program Commitments .. .. .. .. Disbursements .. .. .. .. Principal repayments .. .. .. .. Net flows .. .. .. .. Interest payments .. .. .. .. Net transfers .. .. .. .. Note: This table was produced from the Development Economics central database. 8/20/03 6 3 P A L A U M i l l e n n i u m D e v e l o p m e n t G o a l s 1990 1995 2001 2002 1. Eradicate extreme poverty and hunger 2015 target = halve 1990 $1 a day poverty and malnutrition rates Population below $1 a day (%) .. .. .. .. Poverty gap at $1 a day (%) .. .. .. .. Percentage share of income or consumption held by poorest 20% .. .. .. .. Prevalence of child malnutrition (% of children under 5) .. .. .. .. Population below minimum level of dietary energy consumption (%) .. .. .. .. 2. Achieve universal primary education 2015 target = net enrollment to 100 Net primary enrollment ratio (% of relevant age group) .. .. .. .. Percentage of cohort reaching grade 5 (%) .. .. 84.2 .. Youth literacy rate (% ages 15­24) .. .. .. .. 3. Promote gender equality 2005 target = education ratio to 100 Ratio of girls to boys in primary and secondary education (%) .. .. .. .. Ratio of young literate females to males (% ages 15­24) .. .. .. .. Share of women employed in the nonagricultural sector (%) .. .. .. .. Proportion of seats held by women in national parliament (%) .. 0 .. .. 4. Reduce child mortality 2015 target = reduce 1990 under-five mortality by two-thirds Under 5 mortality rate (per 1,000) 34 31 29 29 Infant mortality rate (per 1,000 live births) 28 26 24 24 Immunization, measles (% of children under 12 months) 98 99 91 99 5. Improve maternal health 2015 target = reduce 1990 maternal mortality by three-fourths Maternal mortality ratio (modeled estimate, per 100,000 live births) .. .. .. .. Births attended by skilled health staff (% of total) 99 .. .. .. 6. Combat HIV/AIDS, malaria, and other diseases 2015 target = halt, and begin to reverse, AIDS, etc. Prevalence of HIV, female (% ages 15­24) .. .. .. .. Contraceptive prevalence rate (% of women ages 15­49) .. .. .. .. Number of children orphaned by HIV/AIDS .. .. .. .. Incidence of tuberculosis (per 100,000 people) .. .. 84 90.6 Tuberculosis cases detected under DOTS (%) .. 129 .. 110 7. Ensure environmental sustainability 2015 target = various (see notes) Forest area (% of total land area) 76.1 .. 76.1 .. Nationally protected areas (% of total land area) .. .. .. 2.6 GDP per unit of energy use (PPP $ per kg oil equivalent) .. .. .. .. CO2 emissions (metric tons per capita) 15.6 14 12.7 .. Access to an improved water source (% of population) .. .. 79 .. Access to improved sanitation (% of population) .. .. 100 .. Access to secure tenure (% of population) .. .. .. .. 8. Develop a global partnership for development 2015 target = various (see notes) Youth unemployment rate (% of total labor force ages 15­24) .. .. .. .. Fixed line and mobile telephones (per 1,000 people) .. .. .. .. Personal computers (per 1,000 people) .. .. .. .. General indicators Population 15,000.00 17,000.00 20,000.00 20,000.00 Gross national income ($) .. 99.5 million 132.2 million 136.4 million GNI per capita ($) .. 5,850.00 6,610.00 6,820.00 Adult literacy rate (% of people ages 15 and over) .. .. .. .. Total fertility rate (births per woman) 3.1 2.9 .. 2.5 Life expectancy at birth (years) 66.9 69.5 70.4 .. Aid (% of GNI) 0 145.1 25 22 External debt (% of GNI) .. .. .. .. Investment (% of GDP) .. .. .. .. Trade (% of GDP) 58.9 78 95.8 99.3 Source: World Development Indicators database, April 2004. Note: In some cases the data are for earlier or later years than those stated. Goal 1 targets: Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day. Halve, between 1990 and 2015, the proportion of people who suffer from hunger. Goal 2 target: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling. Goal 3 target: Eliminate gender disparity in primary and secondary education preferably by 2005 and to all levels of education no later than 2015. Goal 4 target: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate. Goal 5 target: Reduce by three-fourths, between 1990 and 2015, the maternal mortality ratio. Goal 6 targets: Have halted by 2015, and begun to reverse, the spread of HIV/AIDS. Have halted by 2015, and begun to reverse, the incidence of malaria and other major diseases. Goal 7 targets: Integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources. Halve, by 2015, the proportion of people without sustainable access to safe drinking water. By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers. Goal 8 targets: Develop further an open, rule-based, predictable, nondiscriminatory trading and financial system. Address the special needs of the least developed countries. Address the spe- cial needs of landlocked countries and small-island developing states. Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term. In cooperation with developing countries, develop and implement strategies for decent and productive work for youth. In cooperation with pharma- ceutical companies, provide access to affordable, essential drugs in developing countries. In cooperation with the private sector, make available the benefits of new technologies, especially in- formation and communications. 6 4 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S SAMOA Samoa has made the most progress among currently account for about 34 percent of the PMCs in establishing a framework for Samoa's external debt. Four projects were participatory growth. Samoa has been completed during the past decade and all four implementing a gradual, comprehensive were rated satisfactory at completion.An ADB- economic reform program since 1996. The supervised power project (fiscal 1987­95) agenda included maintenance of prudent fiscal helped Samoa become fully reliant on indigenous and monetary policies, liberalization of the hydropower that replaced more expensive and financial sector, rationalization of the tax and environmentally damaging diesel generating tariff systems, and civil service reforms. Signifi- plants. Through two telecom projects (fiscal cant investments in infrastructure, health and 1989­95 and fiscal 2003­current), the Bank education, followed by an emphasis on asset helped upgrade and expand Samoa's telecom management and institutional reform, helped network and is now helping to introduce create a sound economic and social infrastruc- competition and private participation in the ture network. Political stability, strong leader- sector.The ADB-supervised Multiproject (fiscal ship, timely passage of relevant legislation and 1986­94) had intended to reduce both donor close consultations with the private sector and government transaction costs by financing helped the program progress steadily. Concen- several subprojects that were considered too tration of the population on one island also small for individual external financing.While facilitated provision of public services and the project achieved most of its physical infrastructure.The reform effort has generated objectives, it did not in itself display the cost- a stable macroeconomic environment and effectiveness of the multisectoral approach. average annual GDP growth of nearly 5 percent Considerable delays, a heavy burden on since 1997. Key growth sectors were fisheries, implementing agencies, and specialized which grew at nearly 25 percent a year; supervision required in each subsector limited commerce; tourism; and communication its cost-effectiveness.An infrastructure project services. High levels of inward remittances (fiscal 1990­98) helped Samoa restore its road (21 percent of GDP in 2002) helped raise network after Cyclone Val and made substan- income levels and provided a source of invest- tial contributions to institutional strengthen- ment capital for small holders.17 GDP per ing. In particular, the project introduced a capita increased by more than 4 percent since participatory framework for developing strate- 1997 and access to health and education gies to mitigate the impact of natural disasters, services, clean water and electricity is close to which has become a model for similar efforts universal. Despite Samoa's strong perform- in other parts of the region. Strong ownership ance, however, further measures are needed to by the government and a timely, flexible, and enhance the country's productive response. responsive Bank approach facilitated this Some two-thirds of the population is engaged effort. A follow-on infrastructure project (fiscal in primary agricultural production, where 1998­03) has helped Samoa upgrade its growth has stagnated;the trade deficit is around airports, roads, and coastal infrastructure 45 percent of GDP, with merchandise exports networks and reorient responsible agencies accounting for only 7 percent of GDP; and the toward sustainable management of their assets. main growth sector, fisheries, has been highly The ongoing Health Project (fiscal 2000­06) vulnerable to migration patterns of tuna stocks. aims to help implement a health sector reform Effective contributions were made to strategy, although it has suffered from consid- infrastructure development in Samoa. Samoa erable delays due to the inability to recruit was the most active PMC borrower during the suitable local consultants. decade, with seven active projects. Bank loans 6 5 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 Samoa at a glance S A M O A a t a G l a n c e 9/15/04 9/15/04 East Lower- POVERTY and SOCIAL Asia & middle- Samoa Pacific income Development diamond* Development diamond* 2003 Population, mid-year (millions) 0.18 1,855 2,655 Life expectancy GNI per capita (Atlas method, US$) 1,600 1,080 1,480 Life expectancy GNI (Atlas method, US$ billions) 0.28 2,011 3,934 Average annual growth, 1997-03 Population (%) 1.1 1.0 0.9 GNIGNI Gross Gross Labor force (%) .. 1.1 1.2 per per primary primary Most recent estimate (latest year available, 1997-03) capita capita enrollment enrollment Poverty (% of population below national poverty line) .. .. .. Urban population (% of total population) 22 40 50 Life expectancy at birth (years) 69 69 69 Infant mortality(per 1,000 live births) 20 32 32 Access to improved water source Child malnutrition (% of children under 5) 4 15 11 Access to improved water source Access to an improved water source (% of population) 99 76 81 Illiteracy (% of population age 15+) 1 10 10 Samoa Samoa Gross primary enrollment (% of school-age population) 103 111 112 Male 104 112 113 Lower-middle-income group Lower-middle-income group Female 101 111 111 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1983 1993 2002 2003 Economic ratios* GDP (US$ billions) .. 0.12 0.26 0.32 Economic ratios* Gross domestic investment/GDP .. .. .. .. Trade Exports of goods and services/GDP .. .. .. .. Trade Gross domestic savings/GDP .. .. .. .. Gross national savings/GDP .. .. .. .. Current account balance/GDP .. -32.6 .. .. Domestic Domestic Interest payments/GDP .. 1.1 0.5 0.4 Investment savings Investment Total debt/GDP .. 163.4 88.9 113.2 savings Total debt service/exports 12.3 6.9 .. .. Present value of debt/GDP .. .. 63.7 .. Present value of debt/exports .. .. .. .. Indebtedness Indebtedness 1983-93 1993-03 2002 2003 2003-07 (average annual growth) Samoa GDP .. 4.1 1.8 3.1 .. Lower-middle-income group Samoa GDP per capita .. 3.1 0.6 1.9 .. Lower-middle-income group Exports of goods and services .. 12.1 .. .. .. STRUCTURE of the ECONOMY 1983 1993 2002 2003 GrowthGrowth of investment and GDP (%) of investment and GDP (%) (% of GDP) 8 Agriculture .. .. .. .. 8 6 Industry .. .. .. .. 6 Manufacturing .. .. .. .. 4 4 2 Services .. .. .. .. 2 0 0 Private consumption .. .. .. .. 98 9899 9900 00 01 01 02 02 0303 General government consumption .. .. .. .. GDI GDP Imports of goods and services .. .. .. .. GDI GDP 1983-93 1993-03 2002 2003 Growth of exports and imports (%) Growth of exports and imports (%) (average annual growth) Agriculture .. -0.9 -7.2 .. 50 50 Industry .. 1.5 -5.6 .. 40 40 Manufacturing .. -0.4 -4.7 .. 30 30 Services .. 7.4 7.7 .. 20 20 10 10 Private consumption .. .. .. .. 0 0 General government consumption .. .. .. .. 98 98 99 9900 00 0101 02 02 03 03 Gross domestic investment .. .. .. .. Exports Imports Exports Imports Imports of goods and services .. 9.1 .. .. Note: 2003 data are preliminary estimates. This table was produced from the Development Economics central database. * The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. 6 6 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S S A M O A Samoa PRICES and GOVERNMENT FINANCE 1983 1993 2002 2003 Inflation (%) Inflation (%) Domestic prices 15 (% change) 15 Consumer prices 16.6 1.8 .. .. 10 10 Implicit GDP deflator .. .. 2.9 4.6 5 5 Government finance (% of GDP, includes current grants) 0 0 Current revenue .. 60.7 .. .. 98 98 99 99 00 00 01 01 02 02 0303 Current budget balance .. 18.5 .. .. GDP deflator CPI Overall surplus/deficit .. -21.9 .. .. GDP deflator CPI TRADE 1983 1993 2002 2003 Export and import levels (US$ mill.) Export and import levels (US$ mill.) (US$ millions) Total exports (fob) .. 6 .. .. 125 125 n.a. .. .. .. .. 100 100 n.a. .. .. .. .. Manufactures .. .. .. .. 7575 Total imports (cif) .. 87 .. .. 5050 Food .. .. .. .. 2525 Fuel and energy .. .. .. .. Capital goods .. .. .. .. 0 0 97 97 9898 99 99 00 00 0101 02 02 03 03 Export price index (1995=100) .. .. .. .. Import price index (1995=100) .. .. .. .. Exports Imports Exports Imports Terms of trade (1995=100) .. .. .. .. BALANCE of PAYMENTS 1983 1993 2002 2003 Current account balance to GDP (%) Current account balance to GDP (%) (US$ millions) Exports of goods and services 27 42 .. .. 8 8 Imports of goods and services 57 126 .. .. Resource balance -30 -83 .. .. 6 6 Net income -3 0 .. .. 4 Net current transfers 36 45 .. .. 4 Current account balance .. -39 .. .. 2 2 Financing items (net) .. 30 .. .. 0 0 Changes in net reserves -5 8 .. .. 97 98 99 00 01 02 03 97 98 99 00 01 02 03 Memo: Reserves including gold (US$ millions) .. .. .. .. Conversion rate (DEC, local/US$) 1.5 2.6 3.4 3.0 EXTERNAL DEBT and RESOURCE FLOWS 1983 1993 2002 2003 (US$ millions) Composition of 2003 debt (US$ mill.) Total debt outstanding and disbursed 75 194 234 365 IBRD 0 0 0 0 Composition of 2003 debt (US$ mill.) IDA 9 40 51 58 B: 58 B: 58 Total debt service 6 5 8 11 IBRD 0 0 0 0 IDA 0 0 1 1 Composition of net resource flows G: 196 G: 196 Official grants 15 22 18 .. D: 97 Official creditors 4 22 -1 1 D: 97 Private creditors -2 0 0 0 Foreign direct investment 0 5 1 .. E: 14 Portfolio equity 0 0 0 .. E: 14 A - IBRD D - Other multilateral E - Bilateral World Bank program B - IDA F - Private Commitments 0 6 0 5 CA - IMF IBRD EG- Bilateral - Short-term Disbursements 1 9 1 3 B - IDA D - Other multilateral F - Private Principal repayments 0 0 1 1 C - IMF G - Short-term Net flows 1 9 0 2 Interest payments 0 0 0 0 Net transfers 1 8 0 2 Note: This table was produced from the Development Economics central database. 9/15/04 6 7 S A M O A M i l l e n n i u m D e v e l o p m e n t G o a l s 1990 1995 2001 2002 1. Eradicate extreme poverty and hunger 2015 target = halve 1990 $1 a day poverty and malnutrition rates Population below $1 a day (%) .. .. .. .. Poverty gap at $1 a day (%) .. .. .. .. Percentage share of income or consumption held by poorest 20%.. .. .. .. Prevalence of child malnutrition (% of children under 5) .. .. 4.2 .. Population below minimum level of dietary energy consumption (%).. .. .. .. 2. Achieve universal primary education 2015 target = net enrollment to 100 Net primary enrollment ratio (% of relevant age group) .. 97 94.9 .. Percentage of cohort reaching grade 5 (%) .. 86.3 93.8 .. Youth literacy rate (% ages 15­24) 99 99.2 99.4 99.5 3. Promote gender equality 2005 target = education ratio to 100 Ratio of girls to boys in primary and secondary education (%) 112.5 106.9 103.6 .. Ratio of young literate females to males (% ages 15­24) 99.8 99.9 100.1 100.1 Share of women employed in the nonagricultural sector (%) .. .. .. .. Proportion of seats held by women in national parliament (%) .. 4 .. .. 4. Reduce child mortality 2015 target = reduce 1990 under-five mortality by two-thirds Under 5 mortality rate (per 1,000) 42 29 26 25 Infant mortality rate (per 1,000 live births) 33 24 21 20 Immunization, measles (% of children under 12 months) 89 96 92 99 5. Improve maternal health 2015 target = reduce 1990 maternal mortality by three-fourths Maternal mortality ratio (modeled estimate, per 100,000 live births) .. .. 130 .. Births attended by skilled health staff (% of total) 76 .. .. .. 6. Combat HIV/AIDS, malaria, and other diseases 2015 target = halt, and begin to reverse, AIDS, etc. Prevalence of HIV, female (% ages 15­24) .. .. .. .. Contraceptive prevalence rate (% of women ages 15­49) .. .. .. .. Number of children orphaned by HIV/AIDS .. .. .. .. Incidence of tuberculosis (per 100,000 people) .. .. 34 30.4 Tuberculosis cases detected under DOTS (%) .. 55 50 74.6 7. Ensure environmental sustainability 2015 target = various (see notes) Forest area (% of total land area) 45.9 .. 37.1 .. Nationally protected areas (% of total land area) .. 3.5 3.6 4.1 GDP per unit of energy use (PPP $ per kg oil equivalent) .. .. .. .. CO2 emissions (metric tons per capita) 0.8 0.8 0.8 .. Access to an improved water source (% of population) .. .. 99 .. Access to improved sanitation (% of population) .. .. 99 .. Access to secure tenure (% of population) .. .. .. .. 8. Develop a global partnership for development 2015 target = various (see notes) Youth unemployment rate (% of total labor force ages 15­24) .. .. .. .. Fixed line and mobile telephones (per 1,000 people) 25.6 46.4 68.1 71.8 Personal computers (per 1,000 people) .. 0.6 6.2 6.7 General indicators Population 160.0 thousand 165.0 thousand 174.0 thousand 176.0 thousand Gross national income ($) .. 230.2 million 250.2 million 251.3 million GNI per capita ($) .. 1,390.00 1,440.00 1,430.00 Adult literacy rate (% of people ages 15 and over) 98 98.3 98.7 98.7 Total fertility rate (births per woman) 4.8 4.5 4.3 4 Life expectancy at birth (years) 66.3 68.1 69.1 69.4 Aid (% of GNI) 29 22.4 17.7 14.5 External debt (% of GNI) 56 87.9 84.1 90.2 Investment (% of GDP) .. .. .. .. Trade (% of GDP) .. 94.5 114.2 .. Source: World Development Indicators database, April 2004. Note: In some cases the data are for earlier or later years than those stated. Goal 1 targets: Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day. Halve, between 1990 and 2015, the proportion of people who suffer from hunger. Goal 2 target: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling. Goal 3 target: Eliminate gender disparity in primary and secondary education preferably by 2005 and to all levels of education no later than 2015. Goal 4 target: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate. Goal 5 target: Reduce by three-fourths, between 1990 and 2015, the maternal mortality ratio. Goal 6 targets: Have halted by 2015, and begun to reverse, the spread of HIV/AIDS. Have halted by 2015, and begun to reverse, the incidence of malaria and other major diseases. Goal 7 targets: Integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources. Halve, by 2015, the proportion of people without sustainable access to safe drinking water. By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers. Goal 8 targets: Develop further an open, rule-based, predictable, nondiscriminatory trading and financial system. Address the special needs of the least developed countries. Address the spe- cial needs of landlocked countries and small-island developing states. Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term. In cooperation with developing countries, develop and implement strategies for decent and productive work for youth. In cooperation with pharma- ceutical companies, provide access to affordable, essential drugs in developing countries. In cooperation with the private sector, make available the benefits of new technologies, especially in- formation and communications. 6 8 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S SAMOA Projects Financed by the World Bank (active between 1992 and 2003) 1986­94 - Multiproject Loan (ADB) C1657 1987­95 - Power Project (ADB) C1781 1989­95 - Telecom (ADB) C2034 1990­98 - Emergency Road Rehabilitation L2132 1998­03 - Infrastructure Management L3193 2000­06 - Health Sector Management L3421 2003­08 - Telecommunications and Postal Services L3724 Published Country-Specific Analytical and Advisory Activities Samoa Health Sector Review: Meeting the Challenges of Development, 1998 Samoa: Pacific Islands Stakeholder Participation in Development (Working Paper Series), 1998 Samoa Marine Biodiversity Protection and Management Project--GM-P059257 6 9 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S SOLOMON ISLANDS The Solomon Islands have been struggling as While extensive subsistence systems have political turmoil and poor economic manage- prevented absolute hardship, access to basic ment contributed to the emergence of an social services has deteriorated and social environment not conducive to broad partici- indicators are expected to decline. pation in growth. The Solomon Islands have Lending in the Solomon Islands had abundant natural resources, including an limited impact, partly undermined by the civil extensive sea area, fertile land, an 80 percent conflict. Four projects were active in the forest cover, and gold and mineral deposits. Solomon Islands between 1992 and 2003, With a 2003 GNI per capita of $600,however,it including the first and only structural adjust- is the poorest of the nine PMCs. As in Vanuatu, ment credit (SAC) in the PMCs. Just one of the a dual economy persists, with more than three completed projects was rated satisfactory 75 percent of the population remaining entirely at completion.The SAC (fiscal 1999­01) was a outside the formal economy. The formal sector relevant intervention, supporting a reform- comprises logging, tree crop plantations, minded government and aimed at phasing in commercial fishing, and a large public sector. the basic policy framework for a market- A logging boom in the mid-1990s raised GDP oriented and private-sector-led economy. Initial growth to more than 5 percent per annum implementation of the program was effective: between 1992 and 1996. However, the collapse fiscal and monetary discipline stabilized the of the timber market during the 1997 EastAsian economy, enforcement of forestry legislation crisis exposed the fragility of the economy and helped bring down unsustainable deforestation its underlying policy weaknesses. In 1998, rates, and improvements were made in the facing an impending macroeconomic crisis, a investment approval process. Following the reform-minded government began implement- outbreak of civil unrest in 2000, the govern- ing a broad, Bank­supported adjustment ment's attention was diverted and these efforts program to stabilize the economy and stimulate could not be sustained.Two education projects a private sector supply response.While good (fiscal 1986­93 and 1993­2002) contributed to initial progress was made, this was interrupted a nearly fourfold increase in the number of by an outbreak of ethnic violence in mid-1999 secondary school enrollments, including that resulted in a coup a year later. Although a increasing access to secondary education in peace agreement was reached in 2000,a lawless remote islands. The primary means was situation persisted until mid-2003. Australian introduction of a model for community high military intervention helped restore law and schools, which local communities emulated order.The four years of violence took their toll, with community funds (at considerably lower however, leaving the formal economy in virtual costs than project-funded schools).While this collapse and the government facing a severe was a sound achievement in the difficult financial crisis. Export revenues have fallen by environment of the Solomon Islands, the more than 50 percent since 1997, with crops, projects were unable to bring about an increase fisheries, gold mining, and tourist arrivals all in the quality of education provided, as falling dramatically. GDP contracted by measured by student performance on aptitude 4.5 percent a year, dropping the Solomon tests. Moreover, while the projects focused on Islands from a lower-middle-income country to secondary education, there was a drop in a least-developed one. Meanwhile, forestry primary school enrollment rates in the 1990s. resources, which have been the main source of The Bank also supported development of a government income during the crisis,are being strategic plan in education,which other donors depleted at several times their sustainable rate. are now funding. The Health Project (fiscal 7 1 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 2000­ongoing) aimed to improve reproductive however, when the Bank suspended disburse- health and malaria programs and strengthen ments following the government's failure to national planning capacity in the health sector. service its existing debt obligations. Implementation of the project was disrupted, 7 2 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S Solomon Islands at a glance S O L O M O N I S L A N D S a t a G l a n c e 9/15/04 9/15/04 East POVERTY and SOCIAL Solomon Asia & Low- Islands Pacific income Development diamond* Development diamond* 2003 Population, mid-year (millions) 0.46 1,855 2,310 Life expectancy GNI per capita (Atlas method, US$) 600 1,080 450 Life expectancy GNI (Atlas method, US$ billions) 0.27 2,011 1,038 Average annual growth, 1997-03 Population (%) 2.8 1.0 1.9 GNIGNI Gross Gross Labor force (%) 2.7 1.1 2.3 per per primary primary Most recent estimate (latest year available, 1997-03) capita capita enrollment enrollment Poverty (% of population below national poverty line) .. .. .. Urban population (% of total population) 17 40 30 Life expectancy at birth (years) 69 69 58 Infant mortality(per 1,000 live births) 20 32 82 Access to improved water source Child malnutrition (% of children under 5) 21 15 44 Access to improved water source Access to an improved water source (% of population) 71 76 75 Illiteracy (% of population age 15+) .. 10 39 Solomon Islands Solomon Islands Gross primary enrollment (% of school-age population) .. 111 92 Low-income group Male .. 112 99 Low-income group Female .. 111 85 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1983 1993 2002 2003 Economic ratios* GDP (US$ billions) 0.12 0.26 0.25 0.26 Economic ratios* Gross domestic investment/GDP 36.8 .. .. .. Trade Exports of goods and services/GDP 60.9 .. .. .. Trade Gross domestic savings/GDP 15.2 .. .. .. Gross national savings/GDP 21.4 .. .. .. Current account balance/GDP -11.7 -2.8 .. .. Domestic Domestic Interest payments/GDP 0.1 1.0 0.9 1.5 Investment savings Investment savings Total debt/GDP 27.7 57.8 72.0 72.3 Total debt service/exports 0.9 5.8 .. .. Present value of debt/GDP .. .. 51.8 .. Present value of debt/exports .. .. .. .. Indebtedness Indebtedness 1983-93 1993-03 2002 2003 2003-07 Solomon Islands (average annual growth) GDP 5.5 -2.2 -2.7 3.8 .. Low-income group Solomon Islands GDP per capita 2.3 -4.8 -5.3 0.6 .. Low-income group Exports of goods and services .. .. .. .. .. STRUCTURE of the ECONOMY 1983 1993 2002 2003 Growth of investment and GDP (%) (% of GDP) 5 Agriculture .. .. .. .. Growth of investment and GDP (%) Industry .. .. .. .. 0 5 98 99 00 01 02 03 Manufacturing .. .. .. .. -50 Services .. .. .. .. -10 -5 98 99 00 01 02 03 -10 Private consumption 60.8 .. .. .. -15 -15 General government consumption 23.9 .. .. .. GDI GDI GDP GDP Imports of goods and services 82.4 .. .. .. 1983-93 1993-03 2002 2003 (average annual growth) Agriculture .. .. .. .. Industry .. .. .. .. Manufacturing .. .. .. .. Services .. .. .. .. Private consumption .. .. .. .. General government consumption .. .. .. .. Gross domestic investment .. .. .. .. Imports of goods and services .. .. .. .. Note: 2003 data are preliminary estimates. This table was produced from the Development Economics central database. * The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. 7 3 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 S O L O M O N I S L A N D S Solomon Islands PRICES and GOVERNMENT FINANCE 1983 1993 2002 2003 Inflation (%) Inflation (%) Domestic prices 40 (% change) 40 Consumer prices 6.1 9.1 .. .. 30 30 Implicit GDP deflator -0.8 5.4 12.1 9.8 20 20 10 Government finance 10 0 (% of GDP, includes current grants) 0 -10 Current revenue .. 41.2 .. .. 98 00 01 02 -10 98 99 99 00 01 02 0303 Current budget balance .. 10.9 .. .. GDP deflator CPI Overall surplus/deficit .. -7.8 .. .. GDP deflator CPI TRADE 1983 1993 2002 2003 Export and import levels (US$ mill.) Export and import levels (US$ mill.) (US$ millions) Total exports (fob) .. 129 .. .. 250 250 Logs .. 70 .. .. 200 Fish (frozen) .. 9 .. .. 200 Manufactures .. 20 .. .. 150 150 Total imports (cif) .. 137 .. .. 100 100 Food .. .. .. .. 50 Fuel and energy .. .. .. .. 50 Capital goods .. .. .. .. 0 0 97 9798 9899 99 00 00 01 01 02 02 03 03 Export price index (1995=100) .. .. .. .. Import price index (1995=100) .. .. .. .. Exports Imports Exports Imports Terms of trade (1995=100) .. .. .. .. BALANCE of PAYMENTS 1983 1993 2002 2003 Current account balance to GDP (%) Current account balance to GDP (%) (US$ millions) Exports of goods and services 77 172 .. .. 20 Imports of goods and services 96 217 .. .. 30 Resource balance -18 -45 .. .. 10 10 Net income -8 -5 .. .. 0 Net current transfers 12 42 .. .. 0 97 98 99 00 01 02 03 -10 97 98 99 00 01 02 03 Current account balance -15 -7 .. .. -10 -20 Financing items (net) 24 4 .. .. -20 Changes in net reserves -10 3 .. .. -30 -30 Memo: Reserves including gold (US$ millions) .. .. .. .. Conversion rate (DEC, local/US$) 1.1 3.2 6.7 7.5 EXTERNAL DEBT and RESOURCE FLOWS 1983 1993 2002 2003 (US$ millions) Composition of 2003 debt (US$ mill.) Total debt outstanding and disbursed 34 151 180 186 IBRD 0 0 0 0 Composition of 2003 debt (US$ mill.) G: 12 IDA 2 20 41 44 G: 12 B: 44 B: 44 Total debt service 1 10 6 9 F: 27 IBRD 0 0 0 0 F: 27 IDA 0 0 1 1 Composition of net resource flows Official grants 12 10 12 .. Official creditors 7 1 10 -3 E: 40 E: 40 Private creditors 0 0 -3 -3 D: 63 Foreign direct investment 0 23 -7 .. Portfolio equity 0 0 0 .. D: 63 A - IBRD D - Other multilateral E - Bilateral World Bank program B - IDA F - Private Commitments 0 17 0 0 AC--IBRD IMF E -GBilateral - Short-term Disbursements 2 1 0 0 B - IDA D - Other multilateral F - Private Principal repayments 0 0 0 1 C - IMF G - Short-term Net flows 2 1 0 0 Interest payments 0 0 0 0 Net transfers 2 1 0 -1 Note: This table was produced from the Development Economics central database. 9/15/04 7 4 S O L O M O N I S L A N D S M i l l e n n i u m D e v e l o p m e n t G o a l s 1990 1995 2001 2002 1. Eradicate extreme poverty and hunger 2015 target = halve 1990 $1 a day poverty and malnutrition rates Population below $1 a day (%) .. .. .. .. Poverty gap at $1 a day (%) .. .. .. .. Percentage share of income or consumption held by poorest 20%.. .. .. .. Prevalence of child malnutrition (% of children under 5) 21.3 21.1 .. .. Population below minimum level of dietary energy consumption (%) .. .. .. .. 2. Achieve universal primary education 2015 target = net enrollment to 100 Net primary enrollment ratio (% of relevant age group) .. .. .. .. Percentage of cohort reaching grade 5 (%) 84.9 81.2 .. .. Youth literacy rate (% ages 15­24) .. .. .. .. 3. Promote gender equality 2005 target = education ratio to 100 Ratio of girls to boys in primary and secondary education (%) 83.2 84 .. .. Ratio of young literate females to males (% ages 15­24) .. .. .. .. Share of women employed in the nonagricultural sector (%) 33.3 .. .. .. Proportion of seats held by women in national parliament (%) .. 2 .. .. 4. Reduce child mortality 2015 target = reduce 1990 under-five mortality by two-thirds Under 5 mortality rate (per 1,000) 36 30 25 24 Infant mortality rate (per 1,000 live births) 29 25 21 20 Immunization, measles (% of children under 12 months) 70 68 78 78 5. Improve maternal health 2015 target = reduce 1990 maternal mortality by three-fourths Maternal mortality ratio (modeled estimate, per 100,000 live births) .. .. 130 .. Births attended by skilled health staff (% of total) .. 85 85 .. 6. Combat HIV/AIDS, malaria, and other diseases 2015 target = halt, and begin to reverse, AIDS, etc. Prevalence of HIV, female (% ages 15­24) .. .. .. .. Contraceptive prevalence rate (% of women ages 15­49) .. .. .. .. Number of children orphaned by HIV/AIDS .. .. .. .. Incidence of tuberculosis (per 100,000 people) .. .. 84 90.6 Tuberculosis cases detected under DOTS (%) .. 57 67 57.2 7. Ensure environmental sustainability 2015 target = various (see notes) Forest area (% of total land area) 92.2 .. 90.6 .. Nationally protected areas (% of total land area) .. 0 0 0.3 GDP per unit of energy use (PPP $ per kg oil equivalent) .. .. .. .. CO2 emissions (metric tons per capita) 0.5 0.4 0.4 .. Access to an improved water source (% of population) .. .. 71 .. Access to improved sanitation (% of population) .. .. 34 .. Access to secure tenure (% of population) .. .. .. .. 8. Develop a global partnership for development 2015 target = various (see notes) Youth unemployment rate (% of total labor force ages 15­24) .. .. .. .. Fixed line and mobile telephones (per 1,000 people) 14.7 18.4 19.3 17.1 Personal computers (per 1,000 people) .. 23.3 39.3 40.5 General indicators Population 319.0 thousand 367.0 thousand 431.0 thousand 443.0 thousand Gross national income ($) 233.5 million 330.5 million 264.5 million 256.0 million GNI per capita ($) 730 900 610 580 Adult literacy rate (% of people ages 15 and over) .. .. .. .. Total fertility rate (births per woman) 5.9 5.7 5.4 5.3 Life expectancy at birth (years) 64.5 66.7 68.6 69.3 Aid (% of GNI) 22.1 14.9 20 11 External debt (% of GNI) 58.1 49.5 55.3 75.3 Investment (% of GDP) 29 .. .. .. Trade (% of GDP) 119.6 .. .. .. Source: World Development Indicators database, April 2004. Note: In some cases the data are for earlier or later years than those stated. Goal 1 targets: Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day. Halve, between 1990 and 2015, the proportion of people who suffer from hunger. Goal 2 target: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling. Goal 3 target: Eliminate gender disparity in primary and secondary education preferably by 2005 and to all levels of education no later than 2015. Goal 4 target: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate. Goal 5 target: Reduce by three-fourths, between 1990 and 2015, the maternal mortality ratio. Goal 6 targets: Have halted by 2015, and begun to reverse, the spread of HIV/AIDS. Have halted by 2015, and begun to reverse, the incidence of malaria and other major diseases. Goal 7 targets: Integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources. Halve, by 2015, the proportion of people without sustainable access to safe drinking water. By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers. Goal 8 targets: Develop further an open, rule-based, predictable, nondiscriminatory trading and financial system. Address the special needs of the least developed countries. Address the spe- cial needs of landlocked countries and small-island developing states. Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term. In cooperation with developing countries, develop and implement strategies for decent and productive work for youth. In cooperation with pharma- ceutical companies, provide access to affordable, essential drugs in developing countries. In cooperation with the private sector, make available the benefits of new technologies, especially in- formation and communications. 7 5 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 SOLOMON ISLANDS Financed Projects by the World Bank (active between 1992 and 2003) 1986­93 - Education II C1686 1993­02 - Education III C2500 1999­01 - SAC C3252 2000­05 - Health Sector Development Project C3313 Published Country-Specific Analytical and Advisory Activities Solomon Islands: IDF for Population Policy and Planning ­ 27271 WBTF (fiscal 1999­03) Solomon Islands: Pacific Islands Stakeholder Participation in Development (Working Paper), 1998 Solomon Islands: Reform of the National Provident Funds (TA) 7 6 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S TONGA Tonga has raised its social indicators, family (including power, telecommunications, although its economy remains fragile. With and banking); a heavy burden on farmers and some of the most fertile islands in the Pacific, wage earners from both government taxes and an extensive fishing zone, and attractive outer church contributions; a high-tariff regime; islands, Tonga has good growth potential in and a complex investment approval process. agriculture, fisheries, and tourism. Prudent In mid-2002, the government announced an macroeconomic policies during much of the ambitious, ADB-backed reform program and 1990s helped Tonga maintain stability and progress has been made setting the legislative achieve a growth rate of 2.3 percent during the framework for this effort. decade. Squash production, though volatile, With limited lending, Bank contributions dominated exports, while tourist arrivals grew in Tonga were modest. Two projects were by 6 percent a year. Social indicators were active in Tonga during the decade. The joint sustained at high levels, with literacy and ADB/Bank Development Bank Project (fiscal access to education, health, and clean water 1990­96) helped establish a market-based facilities close to universal. Growth, however, interest rate structure, but failed to strengthen also reflected a substantial increase in govern- the Tonga Development Bank (TDB) as an ment services, and the productive sectors effective term-lending institution. Continued appear to be performing well below their poor lending and accounting practices along potential. For example,despite having a fishing with politically motivated decisionmaking zone six times larger than Samoa's, in 2002 allowed a large proportion of the funds to be Tonga exported just one-third the value of fish used for nonviable subprojects. By the end of that Samoa did. Strains in the economy are the project, TDB was in severe financial apparent, with expansionary policies pushing difficulty. However, subsequent managerial inflation to more than 10 percent in 2002 and changes, more political autonomy, assistance official reserves declining sharply following ill- from New Zealand,and some application of the advised investments with the Tonga Trust Fund Bank's prior recommendations have helped (which lost the equivalent of 25 percent of TDB emerge recently as a financially sound and GDP in 2000). Limited employment opportuni- commercially oriented lending institution.The ties have caused high rates of emigration, and Cyclone Recovery Project (fiscal 2002­05) was Tonga's economy remains the most reliant on appraised rapidly by the Bank in response to remittances among the PMCs;they equal nearly Cyclone Waca in 2001.The project is focusing 40 percent of GDP. Various constraints prevent on low-income replacement housing and greater private economic activity, including a strengthening the national emergency response land regime with concentrated ownership and risk management framework.To date, it is among the royal family and nobles; significant being implemented effectively,although limited public involvement in commercial activities; familiarity with Bank procedures has caused large commercial interests among the royal some delays. 7 7 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 Tonga at a glance T O N G A a t a G l a n c e 9/15/04 9/15/04 East Lower- POVERTY and SOCIAL Asia & middle- Tonga Pacific income Development diamond* 2003 Development diamond* Population, mid-year (millions) 0.10 1,855 2,655 Life expectancy GNI per capita (Atlas method, US$) 1,490 1,080 1,480 Life expectancy GNI (Atlas method, US$ billions) 0.15 2,011 3,934 Average annual growth, 1997-03 Population (%) 0.7 1.0 0.9 GNI GNI Gross Gross Labor force (%) .. 1.1 1.2 per per primary primary Most recent estimate (latest year available, 1997-03) capita capita enrollment enrollment Poverty (% of population below national poverty line) .. .. .. Urban population (% of total population) 34 40 50 Life expectancy at birth (years) 71 69 69 Infant mortality(per 1,000 live births) 16 32 32 Access to improved water source Child malnutrition (% of children under 5) .. 15 11 Access to improved water source Access to an improved water source (% of population) 100 76 81 Illiteracy(% of population age 15+) .. 10 10 Tonga Gross primary enrollment (% of school-age population) 112 111 112 Tonga Lower-middle-income group Male 114 112 113 Lower-middle-income group Female 111 111 111 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1983 1993 2002 2003 Economic ratios* GDP (US$ billions) 0.06 0.14 0.14 0.16 Economic ratios* Gross domestic investment/GDP 29.3 18.1 .. .. Trade Exports of goods and services/GDP 18.7 19.9 .. .. Trade Gross domestic savings/GDP -21.2 -9.6 .. .. Gross national savings/GDP 31.5 21.4 .. .. Current account balance/GDP 0.2 2.9 5.2 .. Domestic Domestic Interest payments/GDP .. 0.4 0.4 .. Investment savings Investment savings Total debt/GDP .. 31.6 52.7 .. Total debt service/exports .. 3.2 7.4 .. Present value of debt/GDP .. .. 35.1 .. Present value of debt/exports .. .. 134.5 .. Indebtedness Indebtedness 1983-93 1993-03 2002 2003 2003-07 Tonga (average annual growth) GDP 1.6 2.3 1.6 2.5 .. Lower-middle-income group Tonga GDP per capita 1.4 1.7 1.6 1.5 .. Lower-middle-income group Exports of goods and services .. .. .. .. .. STRUCTURE of the ECONOMY 1983 1993 2002 2003 Growth of investment and GDP (%) Growth of investment and GDP (%) (% of GDP) 8 Agriculture 36.3 40.8 28.5 .. 6 Industry 15.7 12.0 15.1 .. 8 Manufacturing 4.6 5.4 5.6 .. 4 6 Services 48.0 47.2 56.3 .. 2 4 0 Private consumption 106.9 91.9 .. .. 2 98 99 00 01 02 03 General government consumption 14.3 17.7 .. .. 0 GDI GDP Imports of goods and services 69.2 47.5 .. .. -2 -4 98 99 00 01 02 03 1983-93 1993-03 2002 2003 (average annual growth) GDI GDP Agriculture 1.6 0.3 0.9 .. Industry -0.5 4.3 6.2 .. Manufacturing 1.0 4.7 2.9 .. Services 2.0 2.9 0.8 .. Private consumption .. 0.7 .. .. General government consumption .. 4.0 .. .. Gross domestic investment .. .. .. .. Imports of goods and services .. .. .. .. Note: 2003 data are preliminary estimates. This table was produced from the Development Economics central database. * The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. 7 8 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S T O N G A Tonga PRICES and GOVERNMENT FINANCE 1983 1993 2002 2003 Inflation (%) Domestic prices Inflation (%) 20 (% change) 20 Consumer prices 9.6 0.9 10.5 .. 15 15 Implicit GDP deflator 8.3 0.0 8.0 14.6 10 10 Government finance 5 5 (% of GDP, includes current grants) 0 0 Current revenue .. 43.9 31.3 .. 98 99 00 01 02 03 -5 -5 98 99 00 01 02 03 Current budget balance .. 19.3 4.8 .. GDP deflator CPI Overall surplus/deficit .. 2.1 1.4 .. GDP deflator CPI TRADE 1983 1993 2002 2003 Export and import levels (US$ mill.) Export and import levels (US$ mill.) (US$ millions) Total exports (fob) .. 12 8 .. 100 100 Squash .. 9 3 .. Fish .. 2 3 .. 75 75 Manufactures .. .. 0 .. Total imports (cif) .. 61 82 .. 50 50 Food .. 15 .. .. 25 25 Fuel and energy .. 9 .. .. Capital goods .. 12 .. .. 00 97 98 99 00 01 02 03 Export price index (1995=100) .. .. .. .. 97 98 99 00 01 02 03 Import price index (1995=100) .. .. .. .. Exports Imports Terms of trade (1995=100) .. .. .. .. Exports Imports BALANCE of PAYMENTS 1983 1993 2002 2003 Current account balance to GDP (%) (US$ millions) Current account balance to GDP (%) Exports of goods and services 14 28 34 .. 10 Imports of goods and services 47 69 79 .. 10 Resource balance -34 -41 -45 .. 5 5 Net income 3 3 -1 .. 0 Net current transfers 31 42 53 .. 0 97 98 99 00 01 02 03 -5 Current account balance 0 4 7 .. -5 97 98 99 00 01 02 03 -10 Financing items (net) 0 4 -13 .. -10 Changes in net reserves 0 -8 6 .. -15 Memo: -15 Reserves including gold (US$ millions) .. 37 .. .. Conversion rate (DEC, local/US$) 1.1 1.4 2.2 2.2 EXTERNAL DEBT and RESOURCE FLOWS 1983 1993 2002 2003 (US$ millions) Composition of 2002 debt (US$ mill.) Total debt outstanding and disbursed .. 44 74 .. Composition of 2002 debt (US$ mill.) IBRD .. 0 0 .. G: 1 B: 4 IDA .. 3 4 .. E: 14 G: 1 B: 4 Total debt service .. 2 3 .. IBRD .. 0 0 .. E: 14 IDA .. 0 0 .. Composition of net resource flows Official grants .. 15 4 .. Official creditors .. 2 4 .. Private creditors .. 0 0 .. D: 55 Foreign direct investment .. 2 2 .. Portfolio equity .. 0 0 .. D: 55 A - IBRD D - Other multilateral E - Bilateral World Bank program B - IDA F - Private Commitments .. 0 6 .. A - IBRD C - IMF E - Bilateral G - Short-term Disbursements .. 0 0 .. B - IDA D - Other multilateral F - Private Principal repayments .. 0 0 .. C - IMF G - Short-term Net flows .. 0 0 .. Interest payments .. 0 0 .. Net transfers .. 0 0 .. Note: This table was produced from the Development Economics central database. 9/15/04 7 9 T O N G A M i l l e n n i u m D e v e l o p m e n t G o a l s 1990 1995 2001 2002 1. Eradicate extreme poverty and hunger 2015 target = halve 1990 $1 a day poverty and malnutrition rates Population below $1 a day (%) .. .. .. .. Poverty gap at $1 a day (%) .. .. .. .. Percentage share of income or consumption held by poorest 20%.. .. .. .. Prevalence of child malnutrition (% of children under 5) .. .. .. .. Population below minimum level of dietary energy consumption (%).. .. .. .. 2. Achieve universal primary education 2015 target = net enrollment to 100 Net primary enrollment ratio (% of relevant age group) .. .. 99.9 .. Percentage of cohort reaching grade 5 (%) 83.5 .. 88.6 .. Youth literacy rate (% ages 15­24) .. 99.2 .. .. 3. Promote gender equality 2005 target = education ratio to 100 Ratio of girls to boys in primary and secondary education (%) .. .. 104.6 .. Ratio of young literate females to males (% ages 15­24) .. 99.9 .. .. Share of women employed in the nonagricultural sector (%) .. .. .. .. Proportion of seats held by women in national parliament (%) .. 3 .. .. 4. Reduce child mortality 2015 target = reduce 1990 under-five mortality by two-thirds Under 5 mortality rate (per 1,000) 27 24 21 20 Infant mortality rate (per 1,000 live births) 23 20 17 16 Immunization, measles (% of children under 12 months) 86 94 93 90 5. Improve maternal health 2015 target = reduce 1990 maternal mortality by three-fourths Maternal mortality ratio (modeled estimate, per 100,000 live births) .. .. .. .. Births attended by skilled health staff (% of total) 92 .. 92.1 .. 6. Combat HIV/AIDS, malaria, and other diseases 2015 target = halt, and begin to reverse, AIDS, etc. Prevalence of HIV, female (% ages 15­24) .. .. .. .. Contraceptive prevalence rate (% of women ages 15­49) .. .. .. .. Number of children orphaned by HIV/AIDS .. .. .. .. Incidence of tuberculosis (per 100,000 people) .. .. 34 30.4 Tuberculosis cases detected under DOTS (%) .. 54 53 163.9 7. Ensure environmental sustainability 2015 target = various (see notes) Forest area (% of total land area) 5.6 .. 5.6 .. Nationally protected areas (% of total land area) .. .. 1.1 5.1 GDP per unit of energy use (PPP $ per kg oil equivalent) .. .. .. .. CO2 emissions (metric tons per capita) 0.8 1.1 1.2 .. Access to an improved water source (% of population) .. .. 100 .. Access to improved sanitation (% of population) .. .. .. .. Access to secure tenure (% of population) .. .. .. .. 8. Develop a global partnership for development 2015 target = various (see notes) Youth unemployment rate (% of total labor force ages 15­24) .. .. .. .. Fixed line and mobile telephones (per 1,000 people) 45.8 71.1 111.6 146.7 Personal computers (per 1,000 people) .. 6.1 14.2 20.2 General indicators Population 96,000.00 97,000.00 101.0 thousand 101.0 thousand Gross national income ($) 111.0 million 159.2 million 155.8 million 145.6 million GNI per capita ($) 1,160.00 1,640.00 1,540.00 1,440.00 Adult literacy rate (% of people ages 15 and over) .. 98.8 .. .. Total fertility rate (births per woman) 4.2 4.2 3.6 3.4 Life expectancy at birth (years) 68.8 70.3 71 71.3 Aid (% of GNI) 25.6 24.8 14.3 16.4 External debt (% of GNI) 46.2 40.9 44.7 54.3 Investment (% of GDP) 18.5 22.2 20.9 .. Trade (% of GDP) 99 89 71 .. Source: World Development Indicators database, April 2004. Note: In some cases the data are for earlier or later years than those stated. Goal 1 targets: Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day. Halve, between 1990 and 2015, the proportion of people who suffer from hunger. Goal 2 target: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling. Goal 3 target: Eliminate gender disparity in primary and secondary education preferably by 2005 and to all levels of education no later than 2015. Goal 4 target: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate. Goal 5 target: Reduce by three-fourths, between 1990 and 2015, the maternal mortality ratio. Goal 6 targets: Have halted by 2015, and begun to reverse, the spread of HIV/AIDS. Have halted by 2015, and begun to reverse, the incidence of malaria and other major diseases. Goal 7 targets: Integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources. Halve, by 2015, the proportion of people without sustainable access to safe drinking water. By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers. Goal 8 targets: Develop further an open, rule-based, predictable, nondiscriminatory trading and financial system. Address the special needs of the least developed countries. Address the spe- cial needs of landlocked countries and small-island developing states. Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term. In cooperation with developing countries, develop and implement strategies for decent and productive work for youth. In cooperation with pharma- ceutical companies, provide access to affordable, essential drugs in developing countries. In cooperation with the private sector, make available the benefits of new technologies, especially in- formation and communications. 8 0 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S TONGA Projects Financed by the World Bank (active between 1992 and 2003) 1990­96 - Development Bank II C2084 1992­06 - Cyclone Emergency and Recovery Management C3647 Published Country-Specific Analytical and Advisory Activities Tonga: Pacific Islands Stakeholder Participation in Development (Working Paper), 1998 Tonga:Telecom Pre ­ 29461 Japan Funded (FY97­00) Tonga: Health Sector Support ­ 51646 Japan Funded (FY03­04) 8 1 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S VANUATU Vanuatu has been unable to advance its port operation;and high costs and limited reach structural adjustment efforts and a dual of financial services. economy persists. A broad subsistence sector Bank lending had limited impact in accounts for the livelihoods of 80 percent of Vanuatu. Four loans were active in Vanuatu the population but just 10 percent of GDP. A between 1992 and 2002, with only one project narrow, expatriate-dominated formal sector having a satisfactory outcome. A joint Multipro- includes plantations, retail trade and tourism. ject (fiscal 1986­93) endeavored to address The country is highly prone to natural disasters issues of cost, loan size and staff deployment and is rated the "most vulnerable" country in common to small states by covering several the world by the Commonwealth Secretariat's sectors in one operation.The project had very Vulnerability Index.Frequent political change is limited success, however, with subprojects an issue,with 10 changes in government during suffering from a range of implementation the past 10 years.The challenging task of nation- difficulties, including erroneous site selections, building in a country with a widely dispersed poor engineering, and politically motivated population speaking more than 100 languages decisionmaking.According to ADB, there was has been complicated by a dual French/English no project manager or accountant for two colonial heritage.Between 1992 and 2003,GDP years, supervision by ADB staff and consultants grew an average of 2.4 percent a year, driven was weak, and the Bank did not participate largely by tourism-related services and kava. in a single supervision mission. The Urban However, copra, cattle and manufacturing (the Housing Project (fiscal 1991­99) failed to principal merchandise exports) all showed achieve its objective of increasing access minimal or negative growth and merchandise to housing for middle- and lower-income exports declined from 9 percent of GDP in groups in urban areas. Evaluations point to 1992 to 6.5 percent in 2002. In 1997, the gov- weaknesses in the design of the project,which ernment began implementing a broad, ADB- focused on direct public involvement in supported reform program to stimulate the land development, construction and finance. private sector and help realize the country's Implementation, moreover, was undermined considerable growth potential in agricultural by frequent changes in government, which crops, beef, fishing and tourism.The program affected project staffing as well as adherence saw some progress, particularly in enacting to project conditions. The first Education legislation to improve governance and in Project (fiscal 1989­99) helped construct improving fiscal management. However, it was two junior secondary schools that are still not fully implemented and has not achieved among the best facilities in the country, and the desired results to date. GDP contracted by introduced some effective teacher training ­1.5 percent a year between 1999 and 2002 programs. The Second Education Project (partly due to natural disasters) and the country (fiscal 2001­03) aimed to help address the remains the most aid dependent of the non-U.S. language issue by introducing teaching in Compact PMCs, with aid receipts in 2000 vernacular languages during early education equaling 33 percent of GDP. A range of stages. This project was cancelled without obstacles continues to impede broader-based disbursing, however, as the current govern- growth, including the land ownership issue; ment was not satisfied with its design and monopolies in meat and agricultural product was unwilling to borrow for "soft" sectors. marketing; poor rural infrastructure and inter- The Bank has also funded several studies of island transport;inefficient utility provision and the education system and helped prepare an 8 3 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 Education Master Plan. However, despite cient places; is inefficient, with high repetition 15 years of Bank involvement in the education and dropout rates; favors urban areas; and is sector in Vanuatu, literacy rates remain low and biased toward training for the formal sectors the education system continues to have insuffi- rather than rural conditions. 8 4 A N N E X A : PA C I F I C M E M B E R C O U N T R I E S Vanuatu at a glance V A N U A T U a t a G l a n c e 9/15/04 9/15/04 East Lower- POVERTY and SOCIAL Asia & middle- Vanuatu Pacific income Development diamond* Development diamond* 2003 Population, mid-year (millions) 0.21 1,855 2,655 Life expectancy GNI per capita Life expectancy (Atlas method, US$) 1,180 1,080 1,480 GNI (Atlas method, US$ billions) 0.25 2,011 3,934 Average annual growth, 1997-03 Population (%) 2.7 1.0 0.9 Gross GNIGNI Gross Labor force (%) .. 1.1 1.2 per per primary primary Most recent estimate (latest year available, 1997-03) capita capita enrollment enrollment Poverty (% of population below national poverty line) .. .. .. Urban population (% of total population) 23 40 50 Life expectancy at birth (years) 69 69 69 Infant mortality(per 1,000 live births) 34 32 32 Access to improved water source Child malnutrition (% of children under 5) .. 15 11 Access to improved water source Access to an improved water source (% of population) 88 76 81 Illiteracy (% of population age 15+) .. 10 10 Vanuatu Vanuatu Gross primary enrollment (% of school-age population) 112 111 112 Lower-middle-income group Male 112 112 113 Lower-middle-income group Female 111 111 111 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1983 1993 2002 2003 Economic ratios* GDP (US$ billions) 0.10 0.18 0.23 0.28 Economic ratios* Gross domestic investment/GDP 25.7 21.9 .. .. Trade Exports of goods and services/GDP 58.5 47.3 .. .. Trade Gross domestic savings/GDP 12.0 12.4 .. .. Gross national savings/GDP 22.6 21.5 .. .. Current account balance/GDP -8.1 -5.3 .. .. Domestic Domestic Interest payments/GDP 0.2 0.3 0.3 .. Investment savings Investment savings Total debt/GDP 10.4 23.2 35.7 .. Total debt service/exports 1.9 1.4 .. .. Present value of debt/GDP .. .. 23.4 .. Present value of debt/exports .. .. .. .. Indebtedness Indebtedness 1983-93 1993-03 2002 2003 2003-07 Vanuatu (average annual growth) GDP 2.1 1.3 -0.3 2.0 .. Lower-middle-income group Vanuatu GDP per capita -0.5 -1.6 -2.7 0.1 .. Lower-middle-income group Exports of goods and services 1.2 .. .. .. .. STRUCTURE of the ECONOMY 1983 1993 2002 2003 Growth of investment and GDP (%) (% of GDP) 4 Growth of investment and GDP (%) Agriculture 26.1 17.5 .. .. Industry 7.6 9.2 .. .. 24 Manufacturing 3.1 4.6 .. .. 2 0 0 Services 66.3 73.3 .. .. 98 99 00 01 02 03 -2 -2 98 99 00 01 02 03 Private consumption 52.0 59.3 .. .. -44 General government consumption 36.1 28.4 .. .. GDI GDP GDI GDP Imports of goods and services 72.2 56.9 .. .. 1983-93 1993-03 2002 2003 (average annual growth) Agriculture -1.6 2.5 .. .. Industry 6.0 1.3 .. .. Manufacturing 7.6 2.4 .. .. Services 2.7 1.6 .. .. Private consumption 1.3 .. .. .. General government consumption -0.4 .. .. .. Gross domestic investment 3.8 .. .. .. Imports of goods and services 0.1 .. .. .. Note: 2003 data are preliminary estimates. This table was produced from the Development Economics central database. * The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. 8 5 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 V A N U A T U Vanuatu PRICES and GOVERNMENT FINANCE 1983 1993 2002 2003 Inflation (%) Domestic prices (% change) 5 Consumer prices 1.7 3.6 1.6 .. 4 Implicit GDP deflator 1.8 -1.2 2.1 4.0 3 2 Government finance 1 (% of GDP, includes current grants) 0 Current revenue .. 36.3 .. .. 98 99 00 01 02 03 Current budget balance .. 12.2 .. .. GDP deflator CPI Overall surplus/deficit .. -1.4 .. .. TRADE 1983 1993 2002 2003 Export and import levels (US$ mill.) (US$ millions) Total exports (fob) .. 23 .. .. 125 Copra .. 6 .. .. Beef .. 1 .. .. 100 Manufactures .. .. .. .. 75 Total imports (cif) .. 79 .. .. 50 Food .. 12 .. .. Fuel and energy .. 7 .. .. 25 Capital goods .. 21 .. .. 0 Export price index (1995=100) .. .. .. .. 97 98 99 00 01 02 03 Import price index (1995=100) .. .. .. .. Terms of trade (1995=100) .. .. .. .. Exports Imports BALANCE of PAYMENTS 1983 1993 2002 2003 Current account balance to GDP (%) (US$ millions) Exports of goods and services 56 92 .. .. Imports of goods and services 63 96 .. .. 4 Resource balance -7 -4 .. .. 2 Net income -17 -24 .. .. Net current transfers 16 18 .. .. 0 Current account balance -8 -10 .. .. -2 97 98 99 00 01 02 03 Financing items (net) 9 14 .. .. -4 Changes in net reserves -1 -4 .. .. -6 Memo: Reserves including gold (US$ millions) .. .. .. .. Conversion rate (DEC, local/US$) 99.4 121.6 139.2 122.2 EXTERNAL DEBT and RESOURCE FLOWS 1983 1993 2002 2003 (US$ millions) Total debt outstanding and disbursed 11 42 84 .. IBRD 0 0 0 .. Composition of 2002 debt (US$ mill.) IDA 0 11 13 .. G: 14 B: 13 Total debt service 1 2 2 .. IBRD 0 0 0 .. IDA 0 0 0 .. E: 7 Composition of net resource flows Official grants 11 11 8 .. Official creditors 0 0 -1 .. Private creditors 0 0 0 .. D: 50 Foreign direct investment 6 26 15 .. Portfolio equity 0 0 0 .. A - IBRD D - Other multilateral E - Bilateral World Bank program B - IDA F - Private Commitments 2 0 0 .. C - IMF G - Short-term Disbursements 0 0 0 .. Principal repayments 0 0 0 .. Net flows 0 0 0 .. Interest payments 0 0 0 .. Net transfers 0 0 0 .. Note: This table was produced from the Development Economics central database. 9/15/04 8 6 V A N U A T U M i l l e n n i u m D e v e l o p m e n t G o a l s 1990 1995 2001 2002 1. Eradicate extreme poverty and hunger 2015 target = halve 1990 $1 a day poverty and malnutrition rates Population below $1 a day (%) .. .. .. .. Poverty gap at $1 a day (%) .. .. .. .. Percentage share of income or consumption held by poorest 20% .. .. .. .. Prevalence of child malnutrition (% of children under 5) .. 12.1 .. .. Population below minimum level of dietary energy consumption (%) .. .. .. .. 2. Achieve universal primary education 2015 target = net enrollment to 100 Net primary enrollment ratio (% of relevant age group) .. .. 93.2 .. Percentage of cohort reaching grade 5 (%) 90.2 .. 95.1 .. Youth literacy rate (% ages 15­24) .. .. .. .. 3. Promote gender equality 2005 target = education ratio to 100 Ratio of girls to boys in primary and secondary education (%) 91 .. .. .. Ratio of young literate females to males (% ages 15­24) .. .. .. .. Share of women employed in the nonagricultural sector (%) .. .. .. .. Proportion of seats held by women in national parliament (%) .. 2 .. .. 4. Reduce child mortality 2015 target = reduce 1990 under-five mortality by two-thirds Under 5 mortality rate (per 1,000) 70 56 44 42 Infant mortality rate (per 1,000 live births) 52 43 35 34 Immunization, measles (% of children under 12 months) 66 60 94 44 5. Improve maternal health 2015 target = reduce 1990 maternal mortality by three-fourths Maternal mortality ratio (modeled estimate, per 100,000 live births) .. .. 130 .. Births attended by skilled health staff (% of total) .. 89.1 .. .. 6. Combat HIV/AIDS, malaria, and other diseases 2015 target = halt, and begin to reverse, AIDS, etc. Prevalence of HIV, female (% ages 15­24) .. .. .. .. Contraceptive prevalence rate (% of women ages 15­49) .. .. .. .. Number of children orphaned by HIV/AIDS .. .. .. .. Incidence of tuberculosis (per 100,000 people) .. .. 84 90.6 Tuberculosis cases detected under DOTS (%) .. .. 60 36.8 7. Ensure environmental sustainability 2015 target = various (see notes) Forest area (% of total land area) 36.2 .. 36.7 .. Nationally protected areas (% of total land area) .. 0 0 0.3 GDP per unit of energy use (PPP $ per kg oil equivalent) .. .. .. .. CO2 emissions (metric tons per capita) 0.4 0.4 0.4 .. Access to an improved water source (% of population) .. .. 88 .. Access to improved sanitation (% of population) .. .. 100 .. Access to secure tenure (% of population) .. .. .. .. 8. Develop a global partnership for development 2015 target = various (see notes) Youth unemployment rate (% of total labor force ages 15­24) .. .. .. .. Fixed line and mobile telephones (per 1,000 people) 17.8 25.9 36.1 56.9 Personal computers (per 1,000 people) .. 7.4 13.2 14.8 General indicators Population 147.0 thousand 168.0 thousand 201.0 thousand 206.0 thousand Gross national income ($) 166.8 million 211.8 million 222.3 million 221.1 million GNI per capita ($) 1,130.00 1,260.00 1,110.00 1,070.00 Adult literacy rate (% of people ages 15 and over) .. .. .. .. Total fertility rate (births per woman) 5.5 4.9 4.4 4.3 Life expectancy at birth (years) 64.5 66.6 68.1 68.5 Aid (% of GNI) 30.6 21 14.6 11.9 External debt (% of GNI) 24.7 22.2 30.4 36.2 Investment (% of GDP) 34.9 23.2 21.5 .. Trade (% of GDP) 126.2 100.6 107.4 .. Source: World Development Indicators database, April 2004. Note: In some cases the data are for earlier or later years than those stated. Goal 1 targets: Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day. Halve, between 1990 and 2015, the proportion of people who suffer from hunger. Goal 2 target: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling. Goal 3 target: Eliminate gender disparity in primary and secondary education preferably by 2005 and to all levels of education no later than 2015. Goal 4 target: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate. Goal 5 target: Reduce by three-fourths, between 1990 and 2015, the maternal mortality ratio. Goal 6 targets: Have halted by 2015, and begun to reverse, the spread of HIV/AIDS. Have halted by 2015, and begun to reverse, the incidence of malaria and other major diseases. Goal 7 targets: Integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources. Halve, by 2015, the proportion of people without sustainable access to safe drinking water. By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers. Goal 8 targets: Develop further an open, rule-based, predictable, nondiscriminatory trading and financial system. Address the special needs of the least developed countries. Address the spe- cial needs of landlocked countries and small-island developing states. Deal comprehensively with the debt problems of developing countries through national and international measures in order to make debt sustainable in the long term. In cooperation with developing countries, develop and implement strategies for decent and productive work for youth. In cooperation with pharma- ceutical companies, provide access to affordable, essential drugs in developing countries. In cooperation with the private sector, make available the benefits of new technologies, especially in- formation and communications. 8 7 E VA L U AT I O N O F W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 VANUATU Projects Financed by the World Bank (active between 1992 and 2003) 1986­93 - Multiproject (ADB) C1666 1989­99 - Education C1964 1991­99 - Housing C2262 2001­03 - Second Education C3543 Published Country-Specific Analytical and Advisory Activities Vanuatu: Pacific Islands Stakeholder Participation in Development (Working Paper), 1999 Vanuatu Utility Reform Program,TA, 1998. 8 8 ANNEX B: STATISTICAL TABLES Table B.1: Pacific Islands: Key Economic and Social Indicators, 1992­2003 . . . . . . . 90 Table B.2: Official Development Aid to the Pacific Region, 1992­2002 a: Official Development Aid to the Pacific Region . . . . . . . . . . . . . . . . . . . . 94 b: Breakdown of Donor Aid Commitments by Sector, 1992­2002 . . . . . . . 95 c: Share of Aid Commitments by Sector, 1992­2002 . . . . . . . . . . . . . . . . . . 96 Table B.3: World Bank Loans to the Pacific Region, Active, 1992­2004 . . . . . . . . . . . 97 Table B.4: Ratings for Pacific Islands and Comparator Countries a: OED Ratings, Fiscal 1992­2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 b: Ratings for Active Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Table B.5: Pacific Islands­Project Costs a: Cost of Bank Programs in the Pacific and the Caribbean, Fiscal 1992­2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 b: Administrative Expenses by Source of Financing, Fiscal 1992­2004 . . 101 Table B.6: World Bank Management for the Pacific Member Countries, 1992­2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 Table B.7: World Bank Lending to Low-Population Countries a: Lending to Low-Population Countries (Net), 1992­2002 . . . . . . . . . . . . . 103 b: Lending to Low-Population Countries (Gross), 1992­2002 . . . . . . . . . . . 104 8 9 90 T a b l e B . 1 P a c i f i c I s l a n d s : K e y E c o n o m i c a n d S o c i a l I n d i c a t o r s , 1 9 9 2 ­ 2 0 0 3 The The East Lower- Marshall Micro- Solomon Asia & middle- Cape Indicator Fiji Kiribati Islands nesia Palau Samoa Islands Tonga Vanuatu Pacific income Belize Verde Grenada Maldives Mauritius GDP growth (annual %) 3.2 4.1 ­0.5 0.9 1.4 4.1 0.3 2.3 2.4 7.5 3.5 5.3 5.9 2.8 7.4 5.0 GNI per capita, Atlas 2,259 949 2,146 2,052 6,956 1,424 758 1,609 1,194 788 1,283 2,955 1,265 3,123 2,079 3,555 method (current US$) GDP per capita, PPP 4,653 -- -- -- -- 4,745 2,027 5,618 2,982 3,228 4,143 5,316 4,286 5,895 -- 8,536 (current international $) GDP (current US$m) 1,842 47 97 213 108 219 303 152 227 1,425,119 3,303,687 695 531 335 503 4,089 Agriculture, value added 18.1 19.9 14.0 -- 6.5 -- -- 32.1 16.3 17.3 12.6 17.0 11.8 8.9 -- 8.7 (% of GDP) Manufacturing, value 14.8 0.9 1.5 -- 1.1 -- -- 5.1 4.8 31.3 23.9 11.0 9.1 6.9 -- 23.4 added (% of GDP) Agriculture, value added 0.6 ­0.9 -- -- -- ­0.3 -- 1.8 2.7 3.1 2.3 5.5 5.0 ­1.4 3.2 0.7 (annual % growth) Industry, value added 3.7 9.3 -- -- -- 1.7 -- 4.8 1.2 9.8 4.1 23.4 5.4 5.1 9.1 5.0 (annual % growth) Manufacturing, value 3.6 11.1 -- -- -- 0.1 -- 3.6 0.7 9.9 6.1 3.5 5.2 5.5 6.5 4.6 added (annual % growth) Services, etc., value 3.6 4.6 -- -- -- 7.5 -- 2.6 3.1 6.6 3.4 5.7 6.4 2.8 7.2 6.2 added (annual % growth) Imports of goods and 60 87 -- -- 68 60 -- 59 56 33 24 60 57 65 74 63 services (% of GDP) Exports of goods and 58 26 -- -- 16 33 -- 19 47 35 25 52 22 49 90 61 services (% of GDP) Imports of goods and 1.6 -- -- -- -- 10.5 -- ­2.4 1.6 11.8 6.5 6.1 9.6 3.0 6.7 4.7 services (annual % growth) Exports of goods and 2.2 -- -- -- -- 11.4 -- ­1.5 4.3 11.9 7.8 5.1 5.9 4.9 7.4 5.5 services (annual % growth) Manufactures exports 42.7 0.1 -- -- -- -- -- 6.4 8.9 75.5 60.6 12.1 81.5 28.2 31.6 71.9 (% of merchant exports) Gross domestic savings 11.1 ­45.1 -- -- -- -- -- ­19.3 12.9 36.5 26.9 15.1 ­8.6 18.7 46.0 24.6 (% of GDP) Gross capital formation 13.1 56.3 -- -- -- -- -- 20.7 21.3 33.9 26.0 23.8 27.0 33.6 29.8 26.5 (% of GDP) Gross fixed capital 11.9 55.8 -- -- -- -- -- 19.3 21.2 32.4 24.4 23.2 27.0 34.3 29.8 25.5 formation (% of GDP) Gross private capital flows 18.9 32.0 -- -- -- 3.2 7.5 1.2 27.7 11.0 10.5 16.1 8.1 10.3 10.9 12.4 (% of GDP) Private capital flows, total 2.6 -- -- -- -- -- 3.9 1.1 14.0 -- -- 5.4 3.2 10.0 2.1 0.9 (% of GDP) Private investment in 69.5 -- -- -- -- 2.5 10.0 5.8 5.5 4,398.1 16,198.2 0.0 20.0 -- -- 182.8 telecoms (current US$m) Private investment in 0.0 -- -- -- -- -- -- -- -- 3,727.8 5,413.2 37.6 -- -- -- 21.3 transport (current US$m) Foreign direct investment, 3.0 -- -- -- -- 2.1 2.3 1.4 10.9 3.7 2.4 3.3 3.3 9.6 2.1 1.1 net inflows (% of GDP) Foreign direct investment, 21.0 -- -- -- -- -- -- 6.6 56.5 10.4 8.9 13.9 14.1 24.2 6.8 4.0 net inflows (% of gross capital formation) Aid (% of central 10.1 -- -- -- -- -- -- -- 56.1 -- -- -- -- 16.5 19.8 3.4 government expenditures) Aid (% of GNI) 2.5 22.5 46.9 39.2 59.1 18.6 15.9 17.4 17.5 0.7 0.7 3.7 23.4 3.8 7.7 0.8 Aid (% of gross capital 18.5 139.5 -- -- -- -- -- 87.3 80.4 1.9 2.4 15.0 87.5 13.1 19.9 2.8 formation) Aid per capita (current US$) 54 208 1,029 812 3,402 229 122 274 206 5 8 109 281 116 122 26 Current account balance ­3.5 ­11.9 -- -- -- ­7.3 0.4 ­0.6 ­4.8 -- -- ­9.3 ­9.2 ­18.6 ­7.4 ­0.3 (% of GDP) Total reserves in months 3.7 -- -- -- -- 5.5 1.6 4.4 3.2 6.6 6.6 1.7 1.9 2.2 2.3 4.0 of imports Gross national expenditure 102 201 -- -- -- -- -- 140 108 -- -- 109 136 118 84 102 (% of GDP) Money and quasi money 45.8 -- -- 48.5 -- 34.2 27.8 38.8 107.7 102.0 62.5 45.8 61.0 84.5 35.8 76.3 (M2) as % of GDP Money and quasi money 5.2 -- -- ­1.1 -- 10.6 10.3 10.3 3.4 -- -- 9.3 11.7 11.2 17.6 13.1 growth (annual %) Total debt service 5.8 -- -- -- -- 5.1 5.1 3.7 1.3 12.8 19.7 14.4 6.8 7.1 4.1 8.9 (% of exports of goods and services) Table continued on following page 91 92 T a b l e B . 1 P a c i f i c I s l a n d s : K e y E c o n o m i c a n d S o c i a l I n d i c a t o r s , 1 9 9 2 ­ 2 0 0 3 ( c o n t i n u e d ) The The East Lower- Marshall Micro- Solomon Asia & middle- Cape Indicator Fiji Kiribati Islands nesia Palau Samoa Islands Tonga Vanuatu Pacific income Belize Verde Grenada Maldives Mauritius Overall budget balance, excl. ­4.5 -- -- -- -- -- -- -- -- -- -- -- -- 0.2 ­8.3 ­1.3 capital grants (% of GDP) Overall budget balance, ­4.3 -- -- -- -- -- -- -- ­2.1 ­1.3 ­3.1 -- -- 0.3 ­5.5 ­1.1 incl. grants (% of GDP) Expenditure, total 29.1 -- -- -- -- -- -- -- 17.2 12.7 18.8 -- -- 29.0 35.9 23.7 (% of GDP) Current revenue, excluding 25.1 -- -- -- -- -- -- -- 14.3 10.8 15.6 -- -- 24.7 26.9 21.9 grants (% of GDP) Tax revenue (% of GDP) 21.6 -- -- -- -- -- -- -- 12.5 9.6 12.8 -- -- 22.7 13.8 19.0 Taxes on goods & services 30.6 -- -- -- -- -- -- -- 38.6 27.8 33.3 -- -- 45.5 16.2 29.8 (% of current revenue) Taxes on income, profits 31.2 -- -- -- -- -- -- -- 0.0 31.0 20.1 -- -- 21.3 1.9 12.2 and capital gains (% of current revenue) Taxes on income, profits 36.3 -- -- -- -- -- -- -- 0.0 -- -- -- -- 23.2 3.7 14.1 and capital gains (% of total taxes) Taxes on int'l trade 22.8 -- -- -- -- -- -- -- 46.3 12.9 10.5 -- -- 20.1 33.6 33.1 (% of current revenue) Export duties (% of tax 1.9 -- -- -- -- -- -- -- 4.6 -- -- -- -- 0.1 0.0 1.1 revenue) Military expenditure 6.4 18.9 13.6 1.2 (% of central government expenditure) International tourism, 5.4 6.1 2.8 4.9 2.0 4.5 3.9 5.5 6.0 8.1 2.6 10.4 6.7 expenditures (% of total imports) International tourism, 338 5 6 17 55 72 14 29 48 51,051 106,213 156 57 113 365 517 number of arrivals (thousands) Int'l tourism, receipts 25.8 6.3 51.7 6.1 29.0 45.7 6.9 8.4 27.3 19.4 44.4 68.8 18.8 (% of total exports) Population density 43.3 116.9 160.6 41.1 59.7 14.1 137.3 15.0 110.5 44.9 9.8 101.6 290.3 861.9 568.7 (people per sq km) Population growth 1.0 2.2 1.0 2.0 2.4 0.8 2.7 0.5 1.1 1.1 2.4 2.5 0.8 2.4 1.2 (annual %) Life expectancy at birth, 68.3 60.6 67.4 66.8 69.6 68.5 67.5 70.6 67.2 68.4 68.3 73.6 68.0 72.4 66.6 70.9 total (years) Literacy rate, adult total 90.7 98.4 98.8 84.2 84.7 90.0 71.1 96.3 82.7 (% of people ages 15 and above) Pupil-teacher ratio, primary 27.8 27.2 16.0 16.5 24.3 23.3 21.2 26.1 23.1 22.9 25.2 28.8 21.5 23.9 23.9 School enrollment, primary 124 131 105 95 112 102 116 113 118 132 95 131 107 (% gross) Mortality rate, infant 18.7 53.3 56.0 20.7 24.7 21.7 22.0 17.7 37.3 35.6 35.5 34.7 32.0 22.3 61.3 18.0 (per 1,000 live births) Health expenditure per 86.4 46.8 186.6 169.4 465.4 86.5 41.2 85.0 48.6 41.2 78.7 147.0 52.6 223.2 93.0 118.2 capita (current US$) Health expenditure, public 2.6 8.2 6.5 5.8 8.2 4.4 4.3 3.3 2.3 1.8 2.7 2.4 3.3 3.4 5.5 1.9 (% of GDP) Immunization, measles 87.6 73.8 73.5 81.9 81.0 94.6 74.8 92.5 72.6 84.7 86.3 87.0 75.5 91.2 96.4 83.0 (% of children ages 12­23 months) Improved sanitation facilities 43.0 100.0 99.0 34.0 100.0 47.1 58.9 50.0 71.0 97.0 56.0 99.0 (% of pop. with access) Improved water source (% of 47.0 48.0 79.0 99.0 71.0 100.0 88.0 75.9 81.0 92.0 74.0 95.0 100.0 100.0 population with access) Urban population 3.8 0.3 0.3 0.3 0.1 0.4 0.6 0.3 0.4 6,144.8 11,631.3 1.1 2.1 0.4 0.7 4.9 (000 thousand) Urban population (% of total) 47.5 40.2 65.6 27.8 70.1 21.9 15.2 32.4 20.9 34.9 46.1 48.1 51.0 36.8 26.8 42.1 Urban population 371 31 32 31 37 71 32 38 106 232 35 68 470 (in thousands) Gross foreign direct 14.9 2.3 0.0 4.4 1.2 11.7 4.0 3.3 9.4 2.2 1.6 investment (% of GDP) Gross national expenditure 99.2 201.2 130.1 109.0 109.6 136.0 116.9 102.8 (% of GDP) Gross private capital flows 18.8 32.0 3.2 7.8 1.5 28.4 14.2 6.7 10.0 11.4 11.7 (% of GDP) Private investment in 69.5 1.0 10.0 10.0 11.0 20.0 261.0 telecoms (current US$ million) Source: World Bank WDI database as of October 18, 2004. 93 94 WORLD BANK ASSIST T a b l e B . 2 a O f f i c i a l D e v e l o p m e n t A i d t o t h e P a c i f i c R e g i o n , 1 9 9 2 ­ 2 0 0 2 A. Gross Disbursements ($M): ANCE Total IDA+IBRD, IDA+ multi- % of IBRD, % lateral New United United Total all multilateral of total Country IBRD IDA IFC ADB GEF EC UNDP aid Australia France Japan Zealand Kingdom States donor aid aid aid TO Fiji 32.8 5.9 51.1 60.4 2.3 178.4 147.8 11.0 191.0 51.0 11.7 8.3 619.6 18 5.3 P Kiribati 6.7 14.2 2.8 29.1 54.3 0.1 77.9 19.7 6.3 3.5 191.9 0 0 ACIFIC The Marshall 64.1 2.3 69.4 4.6 69.6 1.0 429.7 574.7 0 0 Islands Micronesia 37.9 3.4 46.7 9.6 0.0 127.5 1.6 822.7 1,010.1 0 0 MEMBER Palau 0.0 0.1 1.0 2.0 0.0 125.8 0.7 547.4 682.2 0 0 Samoa 31.7 0.9 32.5 0.5 44.7 5.4 135.3 95.1 1.9 142.0 62.1 0.4 8.5 452.5 23 7.0 The Solomon 25.5 22.5 122.3 7.3 190.6 134.5 2.3 144.7 45.4 41.7 7.5 585.5 13 4.4 Islands Tonga 1.5 37.9 25.4 1.5 79.4 78.6 2.4 94.5 47.2 1.1 7.0 317.6 2 0.5 COUNTRIES, Vanuatu 6.1 5.5 37.1 33.1 2.1 94.4 110.5 96.4 56.7 38.5 20.6 4.0 421.9 6 1.5 Total 32.8 64.9 12.3 289.7 0.5 299.9 27.2 824.4 637.0 114.1 1,029.6 267.2 81.8 1,838.6 4,855.8 12 2.0 B. Net Disbursements ($M): Fiji ­51.3 -2.0 ­3.7 0.1 2.3 ­28.6 145.2 10.7 188.2 51.0 ­10.8 8.3 383.8 na na Kiribati 6.3 13.9 2.8 28.5 54.3 0.1 77.9 19.7 6.3 3.5 191.2 0 0 1992­2002 The Marshall 64.0 2.3 69.3 4.6 69.6 1.0 429.7 574.6 0 0 Islands Micronesia 37.9 3.4 46.7 9.6 0.0 126.6 1.6 822.2 1,008.7 0 0 Palau 0.0 0.1 1.0 2.0 0.0 121.1 0.7 547.4 677.5 0 0 Samoa 27.4 0.9 17.5 0.5 38.8 5.4 107.6 95.1 1.7 142.0 62.1 ­0.5 8.5 420.3 25 6.5 The Solomon 23.8 17.7 120.6 7.3 180.8 131.3 1.4 122.3 45.4 31.9 7.5 533.5 13 4.5 Islands Tonga 1.3 34.8 18.7 1.5 68.8 78.4 2.2 94.5 47.2 0.3 7.0 296.9 2 0.4 Vanuatu 5.2 1.9 35.6 31.5 2.1 86.7 110.5 88.0 55.9 38.5 20.5 4.0 403.0 6 1.3 Grand total ­51.3 57.6 0.8 210.1 0.5 223.5 27.2 561.0 631.1 104.2 998.0 267.2 47.6 1,838.1 4,489.4 1 0.1 Source: OECD database as of 6 Feb 2004 (www1.oecd.org). Official Development Finance (ODF): Used in measuring the inflow of resources to recipient countries: includes (a) bilateral ODA, (b) grants and conces- sional and nonconcessional development lending by multilateral financial institutions, and (c) other official flows for development purposes (including refinancing loans) that have too low a grant element (q.v.) to qual- ify as ODA. A N N E X B : S TAT I S T I C A L TA B L E S B r e a k d o w n o f D o n o r A i d C o m m i t m e n t s T a b l e B . 2 b b y S e c t o r , 1 9 9 2 ­ 2 0 0 2 ( p e r c e n t ) EU World Multilateral, members, New United All donors, Sector Bank ADB total Australia total Zealand Japan States total Social infrastructure & services 53 65 43 75 57 72 23 5 37 Education, total 31 9 12 32 23 59 8 0 14 Health, total 14 4 3 11 13 6 7 2 6 Population programs 0 2 1 0 0 0 0 1 0 Water supply & sanitation 0 13 8 7 3 2 6 0 5 Government & civil society 0 33 14 18 3 4 0 0 8 Other social infrastructure & services 9 4 4 8 14 1 3 3 5 Economic infrastructure 29 21 22 4 25 5 49 3 19 Transport & storage 22 3 13 2 10 2 35 0 12 Communications 7 0 1 0 10 0 1 1 1 Energy 0 5 3 1 3 0 13 2 5 Banking & financial services 0 6 3 0 2 1 0 0 1 Production sectors 0 5 13 8 7 15 24 2 11 Agriculture - forestry - fishing, total 0 4 4 6 6 10 22 2 8 Industry - mining - construction, total 0 2 1 2 1 3 0 0 1 Trade & tourism 0 0 8 1 0 2 1 0 2 Multisector 0 8 9 8 4 9 4 13 9 Commodity aid/ general program assistance 0 0 8 3 0 0 0 61 18 Unallocated/ unspecified 18 0 4 1 3 0 0 15 5 TOTAL 100 100 100 100 100 100 100 100 100 Source: OECD Creditor Reporting System Database CRS/Aid Activities - Commitments - Aggregated by sectors: 1992­2002. Data as of February 2004. 9 5 W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 S h a r e o f A i d C o m m i t m e n t s b y S e c t o r , T a b l e B . 2 c 1 9 9 2 ­ 2 0 0 2 ( p e r c e n t ) Other EU All World multi- Multilateral, members, New United donors, Sector Bank ADB lateral total Australia total Zealand Japan States total I. Social infrastructure & services 4 17 7 28 46 6 2 14 3 100 I.1 Education, total 6 6 9 22 53 8 4 13 0 100 I.2 Health, total 7 7 1 15 47 6 1 23 9 100 I.3 Population programs 0 56 36 92 1 7 0 0 0 100 I.4 Water supply & sanitation 0 24 16 40 27 2 0 30 0 100 I.5 Government & civil society 0 39 4 44 53 2 0 0 1 100 I.6 Other social infrastructure & services 5 9 4 18 39 13 0 13 15 100 II. Economic infrastructure 4 9 14 27 4 6 0 59 4 100 II.1 Transport & storage 5 2 18 25 4 4 0 67 0 100 II.2 Communications 19 0 3 21 2 36 0 28 13 100 II.3 Energy 0 12 5 17 6 4 0 59 14 100 II.4 Banking & financial services 0 47 33 80 5 14 1 0 0 100 III. Production sectors 0 5 23 28 16 3 1 52 0 100 III.1 Agriculture - forestry - fishing, total 0 4 8 12 16 3 1 68 0 100 III.2 Industry - mining - construction, total 0 26 2 28 61 7 4 0 0 100 III.3 Trade & tourism 0 0 78 78 7 1 1 14 0 100 IV. Multisector 0 5 16 21 22 2 1 13 40 100 VI. Commodity aid/ general program assistance 0 0 10 10 2 0 0 0 88 100 XI. Unallocated/ unspecified 10 0 8 18 2 3 0 0 77 100 XII. Total 3 9 12 23 22 4 1 23 26 100 Source: OECD Creditor Reporting System Database CRS/Aid Activities - Commitments - Aggregated by sectors: 1992­2002. Data as of February 2004. 9 6 A N N E X B : S TAT I S T I C A L TA B L E S W o r l d B a n k L o a n s t o t h e P a c i f i c R e g i o n , T a b l e B . 3 A c t i v e , 1 9 9 2 - 2 0 0 4 Active period Lending Task Sector Lead Country (FY) Status ID type Project manager category Sector agency Fiji 1988-92 Completed P003683 IBRD Road Upgrading Infrastructure Transport ADB Fiji 1989-97 Completed P003688 IBRD Third Telecom Wright Infrastructure Telecom ADB Fiji 1990-99 Completed P003689 IBRD Housing Unger Infrastructure Urban Development Fiji 1992-99 Completed P003693 IBRD Road Upgrading II Paterson Infrastructure Transport Samoa 1986-94 Completed P004854 IDA Multiproject Infrastructure Rural Infrastructure ADB Samoa 1987-95 Completed P004857 IDA Afulilo Hydropower Infrastructure Power ADB Project Samoa 1989-95 Completed P004861 IDA Telecom Infrastructure Telecom ADB Samoa 1990-98 Completed P004863 IDA Emergency Road Paterson Infrastructure Transport Rehabilitation Samoa 1998- Ongoing P052293 IDA Infrastructure Asset Paterson Infrastructure Infrastructure Management Samoa 2000- Ongoing P064926 IDA Health Project Saadah Social Sectors Health Samoa 2003- Ongoing P075739 IDA Telecom & Postal Rossotto Infrastructure Telecom Sector Reform Samoa 2004- Ongoing P075523 IDA Second Infrastructure Paterson Infrastructure Infrastructure Asset Mgmt. Project The Solomon Islands 1986-93 Completed P004620 IDA Education II Social Sectors Education The Solomon Islands 1993-03 Completed P004629 IDA Education III Menon Social Sectors Education The Solomon Islands 1999-01 Completed P061214 IDA SAC Ton Structural Economic Policy Adjustment The Solomon Islands 2000- Ongoing P058358 IDA Health Sector Menon Social Sectors Health Development Tonga 1990-96 Completed P004809 IDA Development Zhou Financial Sector Financial Sector ADB Bank II Tonga 2002- Ongoing P075171 IDA Cyclone Emergency Paterson Infrastructure Infrastructure Recovery Project Tonga 2004- Ongoing P075230 IDA Health Sector Support Menon Social Sectors Health Vanuatu 1986-93 Completed P004815 IDA Multiproject Infrastructure Rural Infrastructure ADB Vanuatu 1988-99 Completed P004814 IDA Education Deen Social Sectors Education Vanuatu 1991-99 Completed P004820 IDA Housing Unger Infrastructure Urban Development Vanuatu 2001-04 Cancelled P004823 IDA Second Education Collingwood Social Sectors Education (Table continued on following page) 9 7 W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 W o r l d B a n k L o a n s t o t h e P a c i f i c R e g i o n , T a b l e B . 3 A c t i v e , 1 9 9 2 - 2 0 0 4 ( c o n t i n u e d ) Net commitment ID Actual total Bank Trust Bank costs/ amount Outcome Sustainability impact Bank costs funds funds loan amount (%) 23.4 SAT LIK MOD na na na na 7.6 SAT(M) LIK MOD 336,000 na na na 12.9 SAT(M) UNC MOD 645,611 645,471 140 5 14.9 SAT UNC MOD 222,574 222,574 0 1 3.1 SAT(M) UNC NEG 107,700 na na na 3.7 SAT UNC NEG na na na na 5.0 SAT LIK NEG na na na na 20.4 SAT LIK SUB 303,764 303,412 352 1 14.8 S 707,904 494,701 213,203 5 5.0 S 969,056 490,985 478,071 19 4.5 S 325,440 285,440 40,000 7 13.4 S 316,385 316,385 0 2 6.1 SAT(H) LIK SUB na na na na 17.1 UNSAT UNLIK MOD 1,162,795 799,832 362,963 7 7.0 UNSAT (H) UNC(H) NEG 381,008 259,890 121,117 5 4.0 U 685,194 347,120 338,074 17 2.3 UNSAT UNLIK NEG 95,141 95,141 0 4 5.9 S 190,259 190,259 0 3 10.9 S 591,310 350,509 240,801 5 2.5 UNSAT UNLIK NEG na na na na 8.6 SAT LIK MOD 563,755 531,236 32,520 7 1.6 UNSAT (H) UNLIK NEG 608,572 562,648 45,924 39 743,151 343,056 400,095 Note: See Annex F for ratings. Source: World Bank. 9 8 A N N E X B : S TAT I S T I C A L TA B L E S T a b l e B . 4 R a t i n g s f o r P a c i f i c I s l a n d s a n d C o m p a r a t o r C o u n t r i e s Table 4a: OED Ratings, Fiscal 1992­2004 Outcome, Outcome, Total % satis- Sustain- ID impact, Total % satis- ID impact, evaluated factory ability, % substantial evaluated factory Sustainability, % substantial Country (no.) (no.) % likely (no.) (no.) ($M) ($) % likely ($) ($) Fiji 4 100 50 0 58.7 100 53 0 Samoa 5 100 40 20 35.0 100 73 59 The Solomon Islands 4 25 25 25 33.0 18 18 18 Tonga 2 50 0 0 4.0 48 0 0 Vanuatu 3 33 33 0 12.6 68 68 0 Cape Verde 10 100 80 70 99.0 100 86 80 Mauritius 13 69 77 54 175.0 84 86 65 Maldives 5 100 80 80 44.0 100 79 79 Belize 7 71 71 43 62.7 81 58 39 Grenada 2 100 100 50 13.5 100 100 53 East Asia and the Pacific Region 516 81 69 45 56,955.0 86 80 51 World Bank 3,193 70 56 38 243,785.0 76 66 43 Note: ID = institutional development. Source: OED internal database, October 18, 2004. Table 4b: Ratings for Active Projects Net Percentage commitments # Projects Percentage Commitments commitments Country # Projects amount at risk at risk at risk at risk The Solomon Islands 1 4.0 0 0.0 0.0 0.0 Tonga 2 16.8 0 0.0 0.0 0.0 Samoa 4 26.8 0 0.0 0.0 0.0 Belize 1 13.0 0 0.0 0.0 0.0 Cape Verde 5 67.1 2 40.0 26.5 39.5 Grenada 4 27.9 1 25.0 6.0 21.6 Mauritius 2 13.6 0 0.0 0.0 0.0 Maldives 2 33.2 0 0.0 0.0 0.0 East Asia and the Pacific Region 274 31,238.7 29 10.6 1,906.9 6.1 World Bank 1,505 116,163.6 231 15.3 18,862.9 16.2 Source: World Bank data as of October 18, 2004. 9 9 W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 T a b l e B . 5 P a c i f i c I s l a n d s ­ P r o j e c t C o s t s Table 5a: Cost of Bank Programs in the Pacific and the Caribbean, Fiscal 1992­2004 PACIFIC Total ESW Lending Project Technical costs, completion completion supervision assistance Country $m costs, $m costs, $m costs, $m costs, $m Fiji 2,188.0 422.8 803.9 716.2 110.9 Kiribati 572.1 225.6 309.3 31.0 The Marshall Islands 14.7 14.7 Micronesia, Fed. 14.4 14.4 Pacific Islands 10,287.8 8,148.9 205.1 31.9 110.6 Palau 68.6 34.1 34.4 Samoa 3,732.6 171.6 1,885.3 1,644.7 12.8 The Solomon Islands 3,539.5 44.5 2,025.4 1,104.1 129.5 Tonga 937.1 50.8 720.0 150.4 Vanuatu 1,845.6 378.8 686.1 686.2 24.9 Grand total 23,200.2 9,477.2 6,635.0 4,333.5 483.2 CARIBBEAN Antigua and Barbados 88.9 88.9 Caribbean 15,286.1 4,358.8 1,161.2 1,016.1 1,386.8 Dominica 2,276.5 674.7 1,000.0 555.5 Grenada 1,207.3 110.2 470.8 619.5 St. Kitts and Nevis 1,700.6 553.2 505.3 633.0 St. Lucia 2,327.8 105.7 1,051.4 1,163.6 St. Vincent and Grenadines 1,436.7 125.1 1,030.4 278.3 Trinidad and Tobago 8,147.1 1,125.6 3,894.9 2,537.5 151.2 Grand total 32,471.1 7,142.2 9,114.1 6,803.5 1,538.0 Source: World Bank. 1 0 0 A N N E X B : S TAT I S T I C A L TA B L E S T a b l e B . 5 P a c i f i c I s l a n d s ­ P r o j e c t C o s t s Table 5b: Administrative Expenses by Source of Financing, fiscal 1992­2004 (US$thousands) Bank Trust fund, Process internal Trust Total % of cost, % of Business process fund fund cost process cost total cost PACIFIC Client training 49 529 578 91 2 Country economic & sector work 5,177 4,300 9,477 45 41 Country program support 757 257 1,015 25 4 Lending 4,110 2,525 6,635 38 29 Project supervision 3,397 936 4,333 22 19 Technical assistance 311 172 483 36 2 Sector and global 333 104 437 24 2 Resource mobilization 8 8 0 0 Support services 216 18 234 8 1 Total lending costs 7,507 3,461 10,969 32 47 Total ESW and TA costs 5,871 5,105 10,975 47 47 Grand total 14,359 8,841 23,200 38 100 CARIBBEAN ACS support to products 115 115 0 0 Client training 79 36 114 31 0 Country economic & sector work 6,648 495 7,142 7 22 Country program supp 4,078 2 4,080 0 13 Lending 6,904 2,210 9,114 24 28 Other operational supervision 417 417 0 1 Project supervision 6,549 255 6,803 4 21 Sector and global 633 40 674 6 2 Support services 2,473 2,473 0 8 Technical assistance 1,378 160 1,538 10 5 Total lending costs 13,870 2,465 16,334 15 50 Total ESW and TA costs 8,738 731 9,468 8 29 Grand total 29,274 3,197 32,471 10 100 Note: TF = trust fund Source: World Bank. 1 0 1 W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 W o r l d B a n k M a n a g e m e n t f o r t h e P a c i f i c M e m b e r T a b l e B . 6 C o u n t r i e s , 1 9 9 2 ­ 0 4 Vice Country Country operations Country Country Country Year president director division chief coordinator officer economist 1992 Gautam S. Kaji Marianne Haug Amar Bhattacharaya ... John Caldwell Hilarian Codippily 1993 Gautam S. Kaji Marianne Haug John D. Shilling ... John Caldwell Hilarian Codippily 1994 Gautam S. Kaji Marianne Haug Ajay Chhibber ... Monique Garrity Hilarian Codippily 1995 Russell J. Cheetham Marianne Haug Ajay Chhibber ... Irene Davis Hilarian Codippily 1996 Russell J. Cheetham Marianne Haug Ajay Chhibber ... Irene Davis Hilarian Codippily 1997 Cheetham/Hope/ Marianne Haug Richard Calkins ... Elizabeth Brower Hilarian Codippily Shirazi/Haug 1998 Jean Michel-Severino Klaus Rohland ... ... Elizabeth Brower Hilarian Codippily 1999 Jean Michel-Severino Klaus Rohland ... ... Laurence B. Dunn Hilarian Codippily 2000 Jemal-ud-din Kassum Klaus Rohland ... Natasha Beschorner Laurence B. Dunn Vivek Suri 2001 Jemal-ud-din Kassum Klaus Rohland ... Natasha Beschorner Laurence B. Dunn Vivek Suri 2002 Jemal-ud-din Kassum Klaus Rohland (Nov) ... Natasha Beschorner Laurence B. Dunn Vivek Suri Xian Zhu 2003 Jemal-ud-din Kassum Xian Zhu ... Natasha Beschorner ... Vivek Suri (Aug) Manjula Luthria 2004 Jemal-ud-din Kassum Xian Zhu ... Natasha Beschorner ... Manjula Luthria Source: World Bank intranet. 1 0 2 A N N E X B : S TAT I S T I C A L TA B L E S W o r l d B a n k L e n d i n g t o L o w - P o p u l a t i o n C o u n t r i e s ( N e t ) , T a b l e B . 7 a 1 9 9 2 ­ 2 0 0 2 Net aid disbursements, annual average, 1993­2002 GNI per Aid as Aid per World Bank World Bank IBRD/IDA Population, capita, % capita, aid per aid as a Country/category borrower 2002 2002 of GNI (US$) capita (US$) percent of total Fiji IBRD 823,300 2,160 2 41.4 -5.3 -13 Kiribati IBRD 94,700 810 21 192.9 0.0 0 The Marshall Islands IBRD 53,200 2,350 51 1,123.7 0.0 0 Micronesia IBRD 122,380 1,980 42 881.4 0.0 0 Palau IBRD 19,900 7,140 73 1,666.4 0.0 0 Samoa IDA 176,200 1,420 17 220.9 12.0 5 The Solomon Islands IDA 443,300 570 16 124.8 6.0 5 Tonga IDA 101,160 1,410 18 277.3 1.2 0 Vanuatu IDA 205,570 1,080 17 200.9 1.3 1 Average E. Asia & Pacific LPCs 2,039,710 1,585 13 224.7 0.3 0 Subtotal, five E. Asia & Pacific borrowing countries 1,749,530 1,512 7 112.1 0.3 0 Cape Verde IDA 458,030 1,290 22 273.3 29.4 11 Comoros IDA 585,940 390 15 64.5 11.0 17 Djibouti IDA 656,510 900 15 152.7 6.7 4 Equatorial Guinea IDA 481,420 700 14 64.6 2.2 3 Sao Tome & Principe IDA 154,210 290 99 300.8 26.8 9 Seychelles IBRD 83,590 6,530 3 204.5 -2.7 -1 Average Africa LPCs 2,419,700 966 18 148.2 12.0 8 Belize IBRD 253,330 2,960 5 143.7 12.9 9 Dominica Blend 71,800 3,180 10 318.2 12.7 4 Grenada Blend 101,710 3,500 4 127.5 13.0 10 Guyana IDA 771,970 840 17 132.0 10.9 8 St. Kitts-Nevis IBRD 45,980 6,370 5 283.5 19.7 7 St. Lucia Blend 158,520 3,840 5 187.0 14.3 8 St. Vincent & Grenadines Blend 116,720 2,820 7 164.2 2.1 1 Suriname IBRD 422,570 1,960 10 141.8 0.0 0 Average Latin America & Caribbean LPCs 1,942,600 2,081 9 152.5 8.8 6 Bhutan IDA 850,820 590 20 88.6 2.7 3 Maldives IDA 286,680 2,090 8 123.7 11.8 10 Average South Asia LPCs 1,137,500 968 13 97.7 5.0 5 Average all LPCs 7,539,510 1,421 12 162.8 7.0 4 LDCs, total (least developed) 688,830,720 280 9 23.5 3.2 14 LMICs, total (low-middle income) 2,410,658,560 1,390 0.6 7.5 0.2 2.6 Sources: WDI August 2003; OECD database as of 6 Feb 2004 (www1.oecd.org). Official Development Finance (ODF): Used in measuring the inflow of resources to recipient countries: includes (a) bilateral ODA, (b) grants and concessional and nonconcessional development lending by multilateral financial institutions, and (c) other official flows for development pur- poses (including refinancing loans) that have too low a grant element (q.v.) to qualify as ODA. LPC: low-population countries are member states of the World Bank with populations of less than 1 million people. 1 0 3 W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 W o r l d B a n k L e n d i n g t o L o w - P o p u l a t i o n C o u n t r i e s ( G r o s s ) , T a b l e B . 7 b 1 9 9 2 ­ 2 0 0 2 Gross aid disbursements, annual average, 1993­2002 GNI per Aid as Aid per World Bank World Bank IBRD/IDA Population, capita, % capita aid per aid as a Country/category borrower 2002 2002 of GNI (US$) capita (US$) percent of total Fiji IBRD 823,300 2,160 3 68.4 3.9 6 Kiribati IBRD 94,700 810 21 193.6 0.0 0 The Marshall Islands IBRD 53,200 2,350 51 1,123.9 0.0 0 Micronesia IBRD 122,380 1,980 43 882.6 0.0 0 Palau IBRD 19,900 7,140 74 1,726.5 0.0 0 Samoa IDA 176,200 1,420 19 238.4 14.5 6 The Solomon Islands IDA 443,300 570 18 137.5 6.4 5 Tonga IDA 101,160 1,410 19 297.0 1.4 0 Vanuatu IDA 205,570 1,080 18 210.8 1.8 1 Average E. Asia & Pacific LPCs 2,039,710 1,585 14 242.6 4.5 2 Subtotal five E. Asia & Pacific borrowing countries 1,749,530 1,512 8 132.4 5.2 4 Cape Verde IDA 458,030 1,290 24 287.3 29.9 10 Comoros IDA 585,940 390 17 70.9 11.9 17 Djibouti IDA 656,510 900 17 167.2 7.3 4 Equatorial Guinea IDA 481,420 700 15 75.8 2.9 4 Sao Tome & Principe IDA 154,210 290 110 333.6 28.7 9 Seychelles IBRD 83,590 6,530 5 326.8 5.5 2 Average Africa LPCs 2,419,700 966 20 165.1 13.1 8 Belize IBRD 253,330 2,960 9 252.6 25.3 10 Dominica Blend 71,800 3,180 13 406.5 14.1 3 Grenada Blend 101,710 3,500 6 175.8 13.6 8 Guyana IDA 771,970 840 25 198.1 24.9 13 St. Kitts-Nevis IBRD 45,980 6,370 6 369.1 21.0 6 St. Lucia Blend 158,520 3,840 7 270.2 16.3 6 St. Vincent & Grenadines Blend 116,720 2,820 8 197.5 3.4 2 Suriname IBRD 422,570 1,960 11 150.5 0.0 0 Average Latin America & Caribbean LPCs 1,942,600 2,081 12 210.8 16.3 8 Bhutan IDA 850,820 590 21 91.0 2.9 3 Maldives IDA 286,680 2,090 9 146.8 12.6 9 Average South Asia LPCs 1,137,500 968 14 105.4 5.4 5 Average all LPCs 7,539,510 1,421 14 189.7 10.5 6 LDCs, total (least developed) 688,830,720 280 10 27.7 3.9 14 LMICs, total (low-middle income) 2,410,658,560 1,390 1.0 12.7 1.3 10.6 Sources: WDI August 2003; OECD database as of 6 Feb 2004 (www1.oecd.org). Official development finance (ODF): Used in measuring the inflow of resources to recipient countries: includes (a) bilateral ODA, (b) grants and concessional and nonconcessional development lending by multilateral financial institutions, and (c) other official flows for development pur- poses (including refinancing loans) that have too low a grant element (q.v.) to qualify as ODA. LPC: low-population countries are member states of the World Bank with populations of less than 1 million people. 1 0 4 ANNEX C: LIST OF WORLD BANK ACTIVITIES IN THE PACIFIC REGION, 1992­2003 PROJECTS FINANCED BY THE WORLD BANK (ACTIVE BETWEEN 1992 AND 2003) Fiji 1988­92 - Road Upgrading Project (ADB) L2871 1989­97 - Third Telecommunications Project L3074 1990­99 - Housing Project L3188 1992­99 - Road Upgrading II Project L3491 Samoa 1986­94 - Multiproject Loan (ADB) C1657 1987­95 - Power Project (ADB) C1781 1989­95 - Telecom (ADB) C2034 1990­98 - Emergency Road Rehabilitation L2132 1998­03 - Infrastructure Management L3193 2000­06 - Health Sector Management L3421 2003­08 - Telecommunications and Postal Services L3724 The Solomon Islands 1986­93 - Education II C1686 1993­02 - Education III C2500 1999­01 - SAC C3252 2000­05 - Health Sector Development Project C3313 Tonga 1990­96 - Development Bank II C2084 2002­06 - Cyclone Emergency and Recovery Management C3647 Vanuatu 1986­93 - Multiproject (ADB) C1666 1989­99 - Education C1964 1991­99 - Housing C2262 2001­04 - Second Education C3543 NONLENDING SERVICES Published Regional Economic Reports 2002 - Pacific Islands - Embarking on a Global Voyage:Trade Liberalization and Complemen- tary Reforms in the Pacific 2000 - Cities, Seas, and Storms: Managing Change in Pacific Island Economies 1998 - Enhancing the Role of Government in Pacific Island Economies 1996 - Pacific Island Economies: Building a Resilient Economic Base for the Twenty-First Century 1 0 5 W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 Published Regional Sector Reports 1994 - Health Priorities and Options in the World Bank's Pacific Member Countries 1992 - Pacific Regional Energy Assessment Study 1992 - Higher Education Study Published Country-Specific Analytical and Advisory Services and Grant-Funded Technical Assistance Fiji Fiji: Informal Settlements ­ 27036 Japan Funded (fiscal 1998­2000) Fiji: Management of External Reserves (TA) Fiji: Pacific Islands Stakeholder Participation in Development,Working Paper (1998) Fiji: Restoring Growth in a Changing Global Environment, Economic Report (1995) Fiji: Restructuring of National Bank of Fiji (TA) Fiji: Transport Planning ­ 27552 WBTF (fiscal 1999­2002) Kiribati Kiribati: Adaptation Project Preparation Kiribati: Public Expenditure Review TA (fiscal 1998) Kiribati: Pacific Islands Stakeholder Participation in Development (Working Paper series), 1998 Kiribati: Management of Revenue Reserve Fund TA Micronesia Micronesia: Fisheries TA (FY94­96) Palau Samoa Samoa Health Sector Review: Meeting the Challenges of Development, 1998 Samoa: Pacific Islands Stakeholder Participation in Development (Working Paper Series), 1998 Samoa Marine Biodiversity Protection and Management Project - GM-P059257 The Solomon Islands Solomon Islands: IDF for Population Policy and Planning ­ 27271 WBTF (fiscal 1999­03) Solomon Islands: Pacific Islands Stakeholder Participation in Development (Working Paper), 1998 Solomon Islands: Reform of the National Provident Funds TA Tonga Tonga: Health Sector Support ­ 51646 Japan Funded (FY03­04) Tonga: Pacific Islands Stakeholder Participation in Development (Working Paper), 1998 Tonga: Telecom - 29461 Japan Funded (FY97­00) Vanuatu Vanuatu: Pacific Islands Stakeholder Participation in Development (Working Paper), 1999 Vanuatu Utility Reform Program TA, 1998 Other Published Regional Analytical and Advisory Services and Grant-Funded Technical Assistance Projects Pacific Island Adaptation Program Coordination (TA fiscal 2000) Regulatory Framework and Transaction Models for Private Participation in Infrastructure in Pacific Islands Countries, (Working Paper, Meritec, 2001) Working Apart or Together: The Case for a Common Approach to Management of the Tuna Resources in Exclusive Economic Zones of Pacific Island Countries (Working Paper), 2000 1 0 6 A N N E X C : L I S T O F W O R L D B A N K A C T I V I T I E S I N T H E PA C I F I C R E G I O N , 1 9 9 2 ­ 2 0 0 3 Summary Report Voices from the Village: A Comparative Study of Coastal Resource Management in the Pacific Islands (Discussion Paper series), 1999 Come Hell or High Water--Integrating Climate Change Vulnerability and Adaptation into Bank Work (Working Paper), 1999 Coral Reefs--Challenges and Opportunities for Sustainable Management (1998) Aspects of the Industry,Trade, and Marketing of Pacific Island Trochus (Pacific Islands Discussion Paper series), 1997 Managing Urban Environmental Sanitation Services in Selected Pacific Island Countries (Working Paper), 1995 1 0 7 ANNEX D: SELECTED WORLD BANK POLICY RECOMMENDATIONS TO THE PACIFIC MEMBER COUNTRIES, 1992­2002 1996: Pacific Islands Economies: Building a Resilient Economic Base for the Twenty-First Century (Report No. 13803) 1. Enhance international competitiveness by: a. Maintaining a stable macroeconomic environment through appropriate wage,exchange rate, and overall fiscal policies. b. Implementing a progressive reduction of import duties to reduce the anti-export bias.This should be accompanied by an introduction of new domestic revenue sources to offset losses. c. Reducing barriers to FDI by:(i) streamlining investment approval process,clarifying property rights, and easing requirements related to hiring expatriate workers; (ii) move away from the wide-ranging foreign investment incentives (discretionary,erode tax base,and encourage rent- seeking) and instead focus on improving the overall domestic enterprise environment;and (iii) strengthen trade, aid, and investment links with rapidly growing Asian economies. 2. Promote tourism by: a. Improving air access, flight frequency, and fare levels by rationalizing national airlines, devel- oping regional and beyond network routes. b. Better marketing of unique cultural attributes and careful protection of the environment. c. Improving potential investor confidence in the investment environment. 3. Increase benefits from fisheries by: a. Offshore fisheries:(i) strengthening the fisheries resource management system to ensure sus- tainability of tuna stocks (including monitoring and control);(ii) increase access fees through collective action;and (iii) reduce the public role in commercial activities and prepare the ground- work for increased private involvement. b. Coastal fisheries:(i) shifting the focus of fisheries departments from fisheries development to fish- eries management, including privatization of selected marketing facilities and distribution cen- ters;(ii) privatizing or introducing cost-recovery mechanisms for fish aggregation devices;(iii) limiting public investment to promote new fisheries;(iv) reorienting training,extension,and research func- tions to areas where the public sector has a comparative advantage over the private sector;and (v) streamlining procedures for license applications,and formulating export marketing strategies. 4. Improve conservation and management in the forestry sector by: a. Immediately establishing effective systems to protect natural forests and preserve biodiversity. b. Developing detailed plans for management of natural resources in conjunction with landown- ers and timber operators; developing and enforcing National Codes of Logging Practice. c. Introducing stumpage and export taxes to increase government revenue;increasing royalties paid to landowners;merging field-based and output taxes,and adopting independent surveil- lance of exports. 5. Enhance regional collaboration by: a. Limiting regional collaboration efforts to a small number of selected areas where the benefits outweigh the administrative costs and so forth. b. Building trade relationships with larger,more dynamic trading blocs outside the region,espe- cially APEC. 1 0 9 W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 c. Developing cooperative arrangements in aviation and maritime transport. d. Developing a common approach to natural resource management,that is,forestry and fisheries, including a common Code of Conduct in logging and so forth. e. Adopting and improving common provision of a few social and economic services,such as resolving difficulties facing USP/higher education;reorienting regional training programs from liberal arts to business and technical skills;preparing common disaster response plans,and using an agency such as SPREP to address coastal zone management issues and marine conservation needs. 1992: Pacific Regional Energy Assessment: Issues and Options in the Energy Sector (Report No. 9797) 1. Develop indigenous energy resources (that hold promise for technical, economic, and financial viability) including: a. Developing solar PV based utilities for remote islands; b. Building large-scale and mini-hydro power plants where adequate sites and institutional sup- port are available; and c. Promoting biomass use by agro industries. 2. Improve petroleum import regime by: a. Regularly surveying petroleum landed costs and retail prices, and b. Formulating, monitoring, and enforcing storage safety and waste oil disposal standards. 3. Improve performance and efficiency in the power sector by: a. Strengthening and transforming the existing power supply agencies in financially and managerially autonomous corporations, including treating the utility as a"business." b. Restraining from additional investment in generation capacity as in most countries there is no justification for this. 4. Governments should move away from management and operation in the power sector and instead: a. Develop appropriate incentives for both private and public sector enterprises in the sector; b. Provide manpower training and planning to meet technical skill requirements; c. Formulate and enforce policies to manage the environmental impacts of energy production, transport, and use; and d. Manage and coordinate donor resources,including through regional assistance mechanisms if necessary. 1994: Health Priorities and Options in the World Bank's Pacific Member Countries (Report No. 11620) 1. Recast health priorities and service delivery arrangements by: a. Shifting toward a health policy centered on preventive and peripheral curative services (although without precluding continued government involvement in hospital-based care). b. Pursuing an appropriate mix of facility-based and other initiatives,and setting fees at levels that augment revenues without retarding demand or excluding the poor. c. Strengthening data collection and planning capacity. 2. Develop appropriate manpower strategies by: a. Moving beyond ad hoc responses to staff and service shortages toward coherent manpower strategies that can match supply with demand. b. Developing salary scales and career paths that can recruit and retain doctors,nurses,and med- ical assistants. c. Reducing the dependence on overseas training,ensuring that nurse training programs go beyond hospital-based apprenticeship to reflect primary health care and prevention, ensuring that em- ployment to trainees is not guaranteed and is not using fees to ration demand for training places. 1 1 0 A N N E X D : S E L E C T E D W O R L D B A N K P O L I C Y R E C O M M E N D AT I O N S T O T H E P M C s , 1 9 9 2 ­ 2 0 0 2 3. Improving cost recovery by: a. Implementing greater recourse to patient fees and other user charges for goods and services that yield near-term therapeutic benefits. b. Designing well-targeted preventive and education programs to alter behavior and personal con- sumption patterns and increasing the price of products known to have detrimental health ef- fects (that is, sugar, tobacco, alcohol). c. Further experimenting with insurance operations as a means of improving cost recovery for tertiary care. 4. Encourage private service suppliers by: a. Developing mechanisms to encourage nongovernment financing of curative care when indi- viduals can afford it. b. Removing other barriers to private practice, such as allowing private doctors to have referral or admission rights in public hospitals and ready access to laboratory, radiology, and pharma- ceutical services. c. Allowing nurses and medical assistants to practice privately,and removing obstacles prevent- ing their private operation (that is, inability to buy drugs, which they can subscribe). d. Not allowing donor top-up salaries to become the norm,but only to fill short-term gaps while training is underway. 5. Engage in cost-effective regional cooperation options by: a. Developing a system where in-country and regional training institutions can provide all nec- essary skills except some specialized areas. b. Enabling the Fiji School of Medicine to become an autonomous institution able to respond to needs,attract additional students,and finance its operations without putting an additional bur- den on the fiscal budget. 6. Improve the effectiveness of aid by: a. Developing a strategic focus, including a strategic public expenditure program for the health sector. b. FOR DONORS: Donors should not fund extensive recurrent costs on a permanent basis and should only initiate projects with PMCs when the implications of recurrent costs are fully doc- umented and agreed to as part of an overall public expenditure plan. c. DONORS: Donors should eschew advocacy or consciousness-raising and should refrain from programs or objectives related to particular diseases and should not try to substitute for miss- ing public initiatives.Instead they should focus on capacity-building and helping public agen- cies define and perform the public goods and equity-related functions,which are government responsibilities. d. DONORS should indicate that their own future funding will be guided by the health strategies that emerge from rigorous health priority and objective setting exercises. 1998: Enhancing the Role of Government in the Pacific Island Economies (Report No. 18698) Overall: Need to diversify production base and export markets and exercise greater prudential regulation over their respective financial sectors.Particular actions are required to reduce the fiscal and efficiency burden of large governments by focusing governments on core functions. a. Provide a stable macroeconomic environment by restoring fiscal balance through better pub- lic expenditure management and improved revenue collection. Improved public sector man- agement will require:(i) greater openness and public scrutiny of budgetary processes,public accounts,loan agreements,guarantees,public sector contracts;(ii) reducing the size of the civil service;and (iii) becoming more flexible in hiring practices in the civil service and moving to a performance-oriented remunerations system. 1 1 1 W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 b. Provide institutional infrastructure such as property rights,land-leasing mechanisms,peace,law and order. c. Provide an environment that encourages long-term investment such as stable,predictable,and uniformly applied tax and tariff regimes, market-oriented labor policies, and prudential regu- lation and governance of the financial sector. d. Provide basic education, health care, and physical infrastructure; in particular, shifting to im- proving preventive health,basic education,and asset maintenance;more focus on rural areas; ensuring adequate allocations for operation and maintenance;managing provision on commercial principles; and e. Ensure that aid is properly embedded in the country's own set of priorities, for if not, it can be an impediment to sustainable growth. DONORS should ensure that their aid involves sig- nificant policy reform or capacity building and addresses key factors contributing to economic growth. 1 1 2 ANNEX E: LIST OF PEOPLE INTERVIEWED External Aid Partners Australia Alan Moody, Director, Pacific II,AusAID, Canberra Peter Ellis, Director, Program Evaluation Section,AusAID, Canberra Natasha Smith, Pacific I,AusAID, Canberra Tony O'Dowd, Pacific II,AusAID, Canberra Cathy Bennett, Pacific III,AusAID, Canberra Michelle Lowe, Economist,AusAID, Canberra Heather Smith, General Manager, International Economy Division,The Treasury, Canberra Mark Sewell, International Finance Division,The Treasury, Canberra Bob Davis,Australian High Commissioner in the Solomon Islands, Honiara Stacy Greene, Second Secretary (Development Cooperation), Australian High Commission in the Solomon Islands, Honiara New Zealand Don Clarke, Director, Global Programmes, NZAID,Wellington Ross Macfarlane, Pacific Regional Coordinator, NZAID,Wellington Mathew Daznell, Programme Manager, International Financial Institutions, NZAID,Wellington Glenys Karran, Programme Manager, the Solomon Islands, NZAID,Wellington Sarah-Jane Marriott,Advisor International Development, NZAID,Wellington Peter Buckley, International Development Specialist, NZAID,Wellington Andrew Blazely, Senior Analyst, International and Defense, New Zealand Treasury,Wellington Matt Hodge,Analyst, International and Defense, New Zealand Treasury,Wellington Paul Ash, Senior Policy Officer, Pacific Division, New Zealand Ministry of Foreign Affairs and Trade,Wellington Asian Development Bank (ADB) Ray Cahoon, Deputy Country Director, South Pacific Regional Mission, ADB, Port Vila Pita Moala,Senior Project Implementation Officer,South Pacific Regional Mission,ADB,PortVila Japan International Cooperation Agency (JICA) Masayoshi Ono, Project Formulation Advisor, Japan International Cooperation Agency (JICA) South Pacific Regional Office, Suva Mosese Waqa, Research Associate, JICA South Pacific Regional Office, Suva International Monetary Fund/Pacific Financial Technical Assistance Center (IMF/PFTAC) Luc Leruth, Project Coordinator, Pacific Financial Technical Assistance Center (PFTAC), Suva United Nations Development Programme (UNDP) Yuxue Xue, Deputy Resident Representative, UNDP Multi Country Office, Suva Shashikant Nair,Thematic Specialist­Governance, UNDP Multi Country Office, Suva United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) Serge Belloni, Regional Advisor, Development Policy, ESCAP Pacific Operations Center, Port Vila Siliga Kofe, Economic Affairs Officer, ESCAP Pacific Operations Center, Port Vila Charles Katoanga, Programme Officer, ESCAP Pacific Operations Center, Port Vila 1 1 3 W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 Academic Australian National University, Canberra David Hegarty, Convenor of the State, Society & Governance in Melanesia Project, Research School of Pacific and Asian Studies Brian Brogan, Director, National Graduate School of Management R.J. May, Senior Fellow, School of Pacific and Asian Studies Benjamin Reilly, Senior Lecturer,Asia Pacific School of Economics and Government Vicky Lukere,Visiting Fellow, State Society & Governance in Melanesia Project, Research School of Pacific and Asian Studies University of the South Pacific (USP), Suva Ron Duncan, Executive Director, Pacific Institute of Advanced Studies in Development and Governance, USP, Suva Mahendra Reddy, Senior Lecturer in Development Economics, Center for Development Studies, USP, Suva Regional Agencies Feleti Teo, Director, Forum Fisheries Agency, Honiara Joel Opnai, Fisheries Management Adviser, Forum Fisheries Agency, Honiara Emma Ferguson, Economic Advisor, Pacific Islands Forum Secretariat, Suva Viliame Caniogo, Fiscal Reform Officer, Pacific Islands Forum Secretariat, Suva Tony Neil, Executive Director, Pacific Power Association, Suva Gordon Chang, Manager, Pacific Power Association, Suva Fiji Islands Hon. Jone Kubuabola, Minister for Finance and National Planning Savenca Narube, Governor, Reserve Bank of Fiji Amraiya Naidu,Ambassador at Large, Office of the Prime Minister M.Tadulala, Deputy Secretary, Office of the Prime Minister Pita Wise, Deputy Secretary for National Planning, Ministry of Finance and National Planning CamaTuiqilaqilaTuiloma,Deputy Secretary Planning and Design,Ministry of Works and Energy Eroni Vatuloka,Auditor General, Office of the Auditor General Jone Navakamocea,Chief Economic Planning Officer,Ministry of Finance and National Planning Isoa Tamani, CEO, Land Transport Authority Shiri Ram, General Manager Regulations, Land Transport Authority Sainimili Nabou, Manager Strategic Planning, Land Transport Authority Kiran Krishan Chandra, General Manager Corporate Services, Land Transport Authority Lorraine Seeto, Chief Manager, Corporate Planning and Assurance, Reserve Bank of Fiji Jesoni Vitusagavulu, CEO, Fiji Islands Trade and Investment Bureau Paula Baleilevuka, Project Management Engineer, Public Works Department Mr. Lingham, Director, Housing Authority Winston Thompson, Chief Executive Officer,Telecom Fiji Limited Hon. Ganesh Chand, Member of Parliament Robert Keith-Reid, Journalist and Publisher, Island Business International Connie Chew, Journalist and Publisher/Editor, Chew Publishing Co. Ltd David Aidney, President, Fiji Employers' Federation Michael Rynne, Chief Executive, Basic Industries Limited 1 1 4 A N N E X E : L I S T O F P E O P L E I N T E R V I E W E D Tonga Hon. STT `Utoikamanu, Minister of Finance Joyce Mafi, Governor, National Reserve Bank of Tonga `Otenifi Afu'alo Matoto, Managing Director,Tonga Development Bank Balwyn Faotusia, Acting Director of Planning, Central Planning Department `Aholotu Palu, Ministry of Finance Maliu Takai, Deputy Director, National Disaster Management Office, Ministry of Works Penisimani Vea, Project Manager,Tonga Cyclone Recovery Management Project Makelasi Moala Funaki, Finance Officer,Tonga Cyclone Recovery Management Project Robert Bolouri, President,Tonga Chamber of Commerce Christine M.`Uta'atu, Proprietor,`Uta'atu & Associates Bill Holden, General Manager,`Alatini Fisheries Co Ltd. Samoa Hinauri Petana, Financial Secretary,Treasury Department Kolone Vaai, former Financial Secretary,Treasury Department Epa Tuioti, former Financial Secretary,Treasury Department Noumea Simi, Assistant CEO,Aid Coordination, Ministry of Foreign Affairs Unasa Petelo, Assistant Secretary, Department of Trade, Commerce, and Industry NellaTavita,Principal Policy & Research Officer,Department ofTrade,Commerce and Industry Vaaelua Nofo Vaaelua, CEO, Ministry of Works Meresaini Lanulua, Engineer, Ministry of Works John McFarlane, Engineering Manager, IPA Engineering & Management Consultants Viane Tagiilima, Senior Finance Officer,Treasury Department Frances Brebner, Director, Department of Health Charmina Titilua Saili, Principal Health Policy Analyst, Department of Health Vienne, Senior Financial Officer,Treasury Department Frances Soon Schuster, Consultant, KVA Consult Naomi Tuioti, Consultant, KVA Consult Margaret Malua, Consultant, KVA Consult Ltd Samoa Umbrella for Non Governmental Organisations (SUNGO) Greg Casagrande, President, South Pacific Business Development Foundation Vanuatu Jimmy Andeng, Director-General, Ministry of Finance and Economic Management Odo Tevi, Governor, Reserve Bank of Vanuatu Mark Bebe, Director, Economic Planning, Prime Minister's Office Benjamin Shing, Fiscal Policy Manager, Ministry of Finance and Economic Management Betty Zinner-Toa,Taxation Policy Manager, Ministry of Finance and Economic Management Moana Timakuta, Director,Trade and Investment Department Dayina Tosusu, General Manager, National Housing Authority Nakat Willie, Financial Consultant, National Housing Authority Pita Toa, Government Statistician, Ministry of Finance and Economic Management Cecil Ipalawatte,Senior Economic Statistician,Ministry of Finance and Economic Management Robert Agius, Chairman, Financial Center Association Gideon John, Department of Education Wolfgang Sperlich, Education Advisor, Department of Economic and Social Affairs 1 1 5 W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 The Solomon Islands Hon. Snyder Rini, Deputy Prime Minister and Minister of National Planning Rick Houenipwela, Governor, Central Bank of the Solomon Islands Shadrach Fanega, Permanent Secretary, Ministry of Finance Barnabas Anga, Permanent Secretary, Ministry of Education & Training Primo Afeau,Attorney General of the Solomon Islands Denton Rarawa, Deputy Governor, Central Bank of the Solomon Islands George Malefoasi, Undersecretary for Health, Ministry of Health and Medical Services Donald Malasa, Undersecretary, Ministry of Education & Training Ranjth Hewagama, former Solicitor General,Attorney Generals Chambers Moses Tepai, Program Director, Macroeconomy Reform, Ministry of Finance Mrs. Mylin, Director Planning, Ministry of Education & Training Michael Brown, Advisor, Central Bank of the Solomon Islands World Bank Staff Xian Zhu, Country Director, 2002­present Klaus Rohland, Country Director, 1997­2002 Natasha Beschorner, Country Coordinator for the Pacific Islands, 2000­2004 Laurie Dunn, Senior Country Officer for the Pacific Islands, 1998­2002 Hilarian Coddippily, Senior Country Economist for the Pacific Islands, 1992­2000 Vivek Suri, Country Economist for the Pacific Islands, 2000­2003 Sofia Bettencourt, Senior Natural Resources Economist Ian Collingwood, Senior Education Specialist Rekha Menon, Senior Economist (Health and Education) William Patterson, Lead Highway Engineer Pancho De Guzman, Senior Education Specialist Denise Aldous, General Manager, South Pacific Project Facility Andrew Procter, Regional Manager,Asia Pacific Regional Office, FIAS 1 1 6 ANNEX F: GUIDE TO OED'S COUNTRY EVALUATION RATING METHODOLOGY This methodological note describes the key elements of OED's country assistance evaluation (CAE) methodology.18 CAEs rate the outcomes of Bank assistance programs, not clients' overall development progress. An assistance program needs to be assessed on how well it met its particular objectives, which are typically a subset of the client's development objectives.If an assistance program is large in relation to the client's total development effort, the program outcome will be similar to the client's overall development progress.However,most Bank assistance programs provide only a fraction of the total resources devoted to a client's development by donors, stakeholders, and the government itself. In CAEs,OED rates only the outcome of the Bank's program,not the client's overall development out- come, although the latter is clearly relevant for judging the program's outcome. The experience gained in CAEs confirms that program outcomes sometimes diverge significantly from the client's overall development progress. CAEs have identified assistance programs that had: · Satisfactory outcomes matched by good client development · Unsatisfactory outcomes in clients,which achieved good overall development results,notwith- standing the weak Bank program · Satisfactory outcomes in clients,which did not achieve satisfactory overall results during the period of program implementation. Assessments of assistance program outcome and Bank performance are not the same. By the same token, an unsatisfactory assistance program outcome does not always mean that Bank performance was also unsatisfactory,and vice-versa.This becomes clearer once we consider that the Bank's contribution to the outcome of its assistance program is only part of the story. The assistance program's outcome is determined by the joint impact of four agents: (a) the client; (b) the Bank;(c) partners and other stakeholders;and (d) exogenous forces (for example,events of nature,international economic shocks,and so forth).Under the right circumstances,a negative con- tribution from any one agent might overwhelm the positive contributions from the other three,and lead to an unsatisfactory outcome. OED measures Bank performance primarily on the basis of contributory actions the Bank directly controlled. Judgments regarding Bank performance typically consider the relevance and imple- mentation of the strategy; the design and supervision of the Bank's lending interventions; the scope, quality, and follow-up of diagnostic work and other AAA activities; the consistency of the Bank's lending with its nonlending work and with its safeguard policies; and the Bank's partner- ship activities. Evaluation in three dimensions As a check upon the inherent subjectivity of ratings,OED examines a number of elements that con- tribute to assistance program outcomes. The consistency of ratings is further tested by examining the country assistance program across three dimensions: (a) A Products and Services Dimension, involving a"bottom-up"analysis of major program inputs-- loans, AAA,and aid coordination 1 1 7 W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 (b) A Development Impact Dimension, involving a"top-down"analysis of the principal program objectives for relevance, efficacy, outcome, sustainability, and institutional impact (c) An Attribution Dimension, in which the evaluator assigns responsibility for the program out- come to the four categories of actors (see first paragraph, this section). Rating assistance program outcome In rating the outcome (expected development impact) of an assistance program, OED gauges the extent to which major strategic objectives were relevant and achieved, without any shortcomings. Programs typically express their goals in terms of higher-order objectives,such as poverty reduction. The Country Assistance Strategy (CAS) may also establish intermediate goals, such as improved tar- geting of social services or promotion of integrated rural development,and specify how they are ex- pected to contribute toward achieving the higher-order objective.OED's task is then to validate whether the intermediate objectives produced satisfactory net benefits,and whether the results chain spec- ified in the CAS was valid.Where causal linkages were not fully specified in the CAS, it is the evalu- ator's task to reconstruct this causal chain from the available evidence,and assess relevance,efficacy, and outcome with reference to the intermediate and higher-order objectives. Evaluators also assess the degree of client ownership of international development priorities,such as the Millennium Development Goals,and Bank corporate advocacy priorities,such as safeguards. Ideally, any differences on dealing with these issues would be identified and resolved by the CAS, enabling the evaluator to focus on whether the trade-offs adopted were appropriate. However, in other instances,the strategy may be found to have glossed over certain conflicts,or avoided addressing key client development constraints.In either case,the consequences could include a diminution of program relevance,a loss of client ownership,and/or unwelcome side-effects,such as safeguard vi- olations, all of which must be taken into account in judging program outcome. Ratings Scale OED utilizes six rating categories for outcome, ranging from highly satisfactory to highly unsatisfactory: Highly satisfactory: The assistance program achieved at least acceptable progress toward all major relevant objectives, and had best practice development impact on one or more of them. No major shortcomings were identified. Satisfactory: The assistance program achieved acceptable progress toward all major relevant objectives. No best practice achievements or major shortcomings were identified. Moderately satisfactory: The assistance program achieved acceptable progress toward most of its major relevant objectives. No major shortcomings were identified. Moderately unsatisfactory: The assistance program did not make acceptable progress toward most of its major relevant objectives,or made acceptable progress on all of them,but either (a) did not take into adequate account a key development constraint or (b) produced a major shortcoming, such as a safeguard violation. Unsatisfactory: The assistance program did not make acceptable progress toward most of its major relevant objectives, and either (a) did not take into adequate account a key development constraint or (b) produced a major shortcoming, such as a safeguard violation. 1 1 8 A N N E X F : G U I D E T O O E D ' s C O U N T R Y E VA L U AT I O N R AT I N G M E T H O D O L O G Y Highly unsatisfactory: The assistance program did not make acceptable progress toward any of its major relevant objectives and did not take into adequate account a key development constraint, while also producing at least one major shortcoming, such as a safeguard violation. The institutional development impact (IDI) can be rated as high, substantial, modest, or negligible. IDI measures the extent to which the program bolstered the client's ability to make more efficient, equitable, and sustainable use of its human, financial, and natural resources. Examples of areas included in judging the institutional development impact of the program are: · The soundness of economic management · The structure of the public sector and,in particular,the civil service · The institutional soundness of the financial sector · The soundness of legal,regulatory,and judicial systems · The extent of monitoring and evaluation systems · The effectiveness of aid coordination · The degree of financial accountability · The extent of building NGO capacity · The level of social and environmental capital. Sustainability can be rated as highly likely, likely, unlikely, highly unlikely, or,if available information is insufficient,nonevaluable. Sustainability measures the resilience to risk of the development ben- efits of the country assistance program over time, taking into account eight factors: · Technical resilience · Financial resilience (including policies on cost recovery) · Economic resilience · Social support (including conditions subject to safeguard policies) · Environmental resilience · Ownership by governments and other key stakeholders · Institutional support (including a supportive legal/regulatory framework, and organizational and management effectiveness) · Resilience to exogenous effects,such as international economic shocks or changes in the po- litical and security environments. 1 1 9 ANNEX G: COMMENTS FROM THE GOVERNMENT OF FIJI Comment on World Bank Assistance to Pacific-Member Countries The evaluation of World Bank (WB) assistance to Pacific countries has identified some key areas, which Fiji and other neighboring countries must rationalize to develop the economy further.The analysis/key indicators in the report provides a solid platform in which Fiji can work together with WB in combating the macroeconomic imbalances that exist in our country. In Annex A of this book, the last sentence of the first paragraph highlights the constraints to greater private-sector investment and growth,and these include difficult land access and tenure; high cost and erratic utility provision; price controls on a range of consumer goods and services;a complex foreign investment approval process;high interest rate spreads and limited access to financial services; and an ineffective commercial litigation system. It is not clear what WB is referring to under land access and tenure.With regards to ALTA, efforts have been put in place for displaced sugar cane farmers by government to provide $28,000 to those whose lease has expired. In addition, the government has developed land and tenants have become owners of this security through leasing under crown or state land.These actions were undertaken prior and after the civilian coup in 2000. With regards to a complex foreign investment approval, this was only applicable in 2000 as the Reserve Bank of Fiji put in place a measure to conserve Fiji's foreign reserves level.The strictness in giving approval was in line with protecting Fiji's foreign reserves and the stability of the banking system.Thus limits were placed on the amount institutional investors and business people could remit offshore.Moreover,safeguarding capital flight to sustain Fiji's financial system at that time was utmost important. With reference to the Banks view on "high-interest rate spread" noted above, in the mid 1990s, the spread was marginally reduced compared with the 1980s when Fiji's financial system was heavily regulated.The spread was slightly reduced from around 8 percent to 5 percent but,as the WB report states, this is still higher compared with other developing countries. The government agreed with the report addressing the limited access to financial services, especially to those in remote and outer islands.The government,together with the Association of Banks in Fiji, have managed to address this issue, and to date, the Australia New Zealand Bank (ANZ) and the Colonial National Bank (CNB) have been providing banking services to rural dwellers and those in remote islands through postal agencies and mobile banking. Development of a regional engagement framework would be beneficial for Fiji in the long run as this would rationalize public expenditure policies and programs, which would allow Fiji to be more proactive in ensuring optimal allocations, and enhancing the development impact of aid flows, and removing policy and institutional impediments to private activity to enable growth and more investment. Via e-mail from Mr. Isikeli Voceduadua Ministry of Finance & National Planning, Suva 1 2 1 ANNEX H: MANAGEMENT ACTION RECORD Major Monitorable OED Recommendations Requiring a Response Management Response · Develop a regional engagement The Bank is preparing a new Pacific Islands framework focused around a select few Strategy for 2004­2008 to guide the Bank's objectives. OED's view is that these engagement at the regional and country level. objectives should comprise (a) rationaliz- The goal of the Bank's engagement in the ing public expenditure policies and Pacific will be to create an environment programs, which would allow the PMCs conducive to economic growth with employ- themselves to be more proactive in ment creation.The strategy strives to improve ensuring optimal allocations and enhanc- public sector capabilities as well as incentives ing the development impact of aid flows, for private sector growth by focusing on two and (b) removing policy and institutional main pillars: (a) strengthening government impediments to private activity to enable capacity to manage economic reform through growth and more participation in the key improved public expenditure policies and productive sectors of the PMCs. public sector reforms,18 and (b) improving the business environment for domestic job creation while improving access to regional labor markets for Pacific islanders. · Define a specific set of objectives, a The level of Bank involvement in individual corresponding level of engagement, and Pacific Island countries varies considerably, a set of lending and nonlending options given the predominance of other partners, particular to each country within the particularly bilaterals.Within the underpin- regional framework.The Bank should ning framework of the new regional strategy, define the country-specific objectives and the level and composition of country- outcomes it seeks to influence in each specific assistance will be guided by client PMC,as opposed to the past practice of consultations and remain flexible and defining a regional strategy largely in terms demand-driven.The Pacific Islands Strategy of inputs.Such an approach will necessitate document will include country annexes that selectivity both in terms of countries, outline the development challenges along where the Bank is engaged,and the with the role of other development partners. subsectoral/thematic issues that it tackles. In this context, the annexes will define broad national-level objectives, and interme- diate milestones of proposed Bank assistance programs, thus facilitating better monitoring and evaluation in the medium-term. · Prioritize support for a highly select set of Natural hazard and natural resource manage- regional-level interventions, such as ment are areas of comparative advantage support in the fisheries sector; in air and where there is robust demand for World Bank sea transport industries; and in preparing services.The region's tuna fishery--though to respond to natural disaster to comple- undoubtedly a key resource--is politically ment country-level objectives. contentious; the Bank may offer its services as 1 2 3 W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 Major Monitorable OED Recommendations Requiring a Response Management Response an"honest broker"through provision of technical advice. Australia and the Asian Development Bank have taken a leading role in the air and land transport sectors, though the Bank and IFC are becoming increasingly involved through regional-level analytical work on airlines and road asset management. · Broaden and deepen collaboration with The Bank intends to seek"constructive partner- other donors. The Bank should continue ships"with other donors through several to work toward developing clear and avenues:(a) regular consultations with major consistent messages with active donors in partners,and greater outreach to the U.S., each country; develop closer ties with Japan,and European Union;(b) collaboration in those donors with which contact has a few key areas,notably private sector develop- been less frequent (including with the ment (regulatory reform,utilities,improving the U.S.A. and Japan, the two largest financial business climate);(c) support for sector-wide donors in the region); and encourage the approaches in education in selected countries; PMCs to take a more active role in donor and (d) continued involvement in harmoniza- coordination to ensure that donor activi- tion initiatives.Country-driven development ties are complementary. strategies are largely absent in the region,as are other instruments,which typically facilitate donor coordination (for example,SWAPs).The Bank aims to discuss further with government and partners how to progress this agenda and strengthen country ownership. · Ensure that its strategy in the Pacific is The budget envelope for the Pacific Islands fully funded and staffed in order that its has increased significantly since fiscal 2000. objectives might be met and not just Management will endeavor to maintain the outputs delivered.Adequate financing of budget at the FY05 level, acknowledging that the Bank's program in the Pacific would our assistance per task to Pacific Island be facilitated by developing a coherent, clients tends to be resource and time- realistic set of objectives, as intensive, since our programs in these recommended above. countries are not comprehensive, rendering clustering of tasks difficult.The Bank will seek to leverage other development partner resources where possible. 1 2 4 ANNEX I: CHAIRMAN'S SUMMARY: COMMITTEE ON DEVELOPMENT EFFECTIVENESS The Informal Subcommittee (SC) of the social sectors was questionable,given the need Committee on Development Effectiveness for selectivity and the engagement of other (CODE) met on February 16, 2005 to discuss donors with grant financing in these areas. the "Evaluation of World Bank Assistance to Overall, OED rated the outcome the of Bank Pacific Member Countries, 1992­2002," assistance to PMCs as moderately unsatisfac- prepared by the Operations Evaluation tory, with negligible impact on institutional Department (OED). development and unlikely sustainability. The main recommendations of the OED report Background. According to the OED report, included: (i) developing a regional engagement despite progress in improving social indicators, framework focusing on improving public the Pacific Member Countries (PMCs) still face expenditure management and removing bottle- difficult development challenges:low per capita necks for private sector growth; (ii) defining economic growth, significant income poverty, specific objectives and levels of engagement for and high aid dependence.The report empha- each country while complementing them with sized that over the past decade the Bank had a regional-level objectives;(iii) improving collabo- limited role in the PMCs, initially adopting a ration with other donors; and (iv) ensuring that minimalist approach that largely comprised an- its strategy in the PMCs is adequately funded alytical work through a biannual regional eco- and staffed. nomic report and later increasing lending Management largely agreed with the OED activities mainly in the social sectors.With the analysis and stressed that it would incorporate exception of the Solomon Islands,the Bank did the lessons of the report in the new Pacific not present a formal strategy for any of the Strategy,currently under preparation. Manage- PMCs until the Pacific Regional Strategy in 2000. ment noted that many of the report's OED also noted that although the Bank pro- recommendations, such as a focus on public duced some high quality analytical work (which expenditure management and private sector was well received across the region),improved growth,have already been taken on board,and its partnership with the major donors by relo- it added that the new strategy will seek to cating the Country Director to the Region in strike a better balance between regional and 2000,and undertook a number of positive lend- country-level activities, stressing country ing interventions, it did not have a significant ownership and employing a demand-driven impact on the PMCs' main objective over the approach. past decade--improving the environment for private sector growth.According to the evalu- Main conclusions and next steps. The Sub- ation, the Bank's assistance and its role as a committee welcomed the evaluation and com- "knowledge bank"were weakened by:a lack of mended OED for a candid and comprehensive strategic objectives;infrequent interaction with assessment. Members appreciated the frank ac- clients and other donors; limited country- knowledgement of challenges and agreed with specific analysis and follow-up assistance; the OED rating of the outcome of Bank assistance. and low administrative resources,as compared They encouraged management to consider the with other low-population countries.OED also report's recommendations when formulating noted that the relevance of Bank lending in the the new regional strategy and stressed the im- 1 2 5 W O R L D B A N K A S S I S TA N C E T O PA C I F I C M E M B E R C O U N T R I E S , 1 9 9 2 ­ 2 0 0 2 portance of drawing lessons from the Bank's ex- usual scale in the PMCs.Members noted the re- perience in PMCs for future involvement in small, port's criticism of the Bank's involvement in so- low-population states where the Bank is not the cial sector work and were interested whether primary lender. sector-wide approaches could be employed in The following points were raised. some sectors (e.g.,education).They agreed with the report's recommendations to focus on pri- Lessons learned. Members noted that the pre- vate sector growth, public expenditure man- vious evaluation of the Bank's work in the agement,governance,and building institutional 1980s (completed in 1992) had similar findings capacity,as compared to previous engagement and that few lessons learned were incorpo- in social sectors.At the same time,several mem- rated in the Bank's program in the 1990s.In that bers noted the importance of the Bank's con- context, they were interested in how the up- tinuous engagement in social sectors for donor coming Regional Strategy would address the lat- harmonization and alignment initiatives. est OED recommendations.Management replied Among other areas for potential Bank involve- that the new strategy has already taken note of ment, members mentioned analysis of niche OED recommendations and would focus on markets, infrastructure, regional integration, raising the efficiency of public expenditures (es- and natural disaster preparedness.Management pecially in the social sectors), and on encour- replied that while it has already engaged in aging private sector growth.Some members felt dialogue with some countries on disaster in- that the report could have paid more atten- surance, niche markets, and regional trade, it tion to the issues of poverty and income in- would look cautiously at infrastructure financ- equality, as well as based some of its ing, taking into account issues of limited ca- recommendations on the MDG-related situa- pacity and sustainability. tion in the region. A speaker wished the re- port had more details on particular reasons Nonlending activities. Members agreed that for the Bank's inactivity in the region during the the Bank has a comparative advantage in pro- past decade, i.e., whether it was due to diffi- viding objective and credible policy advice and culties with clients,costs of doing business,or welcomed the suggested focus on analytical other issues. Management acknowledged that and advisory services. Some members noted in the past the Bank had taken a minimalist ap- the importance of not overstating the role of proach in the region, to some extent due to lending and stressed the need for more selec- presence of other major donors,abundance of tivity,paying more attention to the potential of grant resources,and higher-than-usual costs of nonlending activities. Management noted that doing business.Management also noted that de- it is aware of the high costs of doing business cisions to decentralize and develop a regional in the region and will take additional caution to strategy are clear indications of changes in the ensure that many small and costly operations do Bank's strategy. not crowd out analytical products.Some speak- Role of the Bank. Members agreed with the ers felt that the report could have benefited from report's conclusion that access to financial re- utilizing the CPIA as a diagnostic tool for iden- sources has not been the binding constraint tifying weaknesses. for development in the region, and welcomed its recognition of the high potential of non- Results and resource allocation. Members lending work,if properly disseminated and fol- noted that due to the absence of a formal Bank lowed up. They concurred with the report's strategy from 1992­2000 the program lacked recommendation to define focused and meas- focus and measurable goals,which made it dif- urable country-specific objectives and levels of ficult to assess its relevance and effectiveness. engagement, but also acknowledged that the They felt that the Bank had limited its admin- Bank's usual toolkit (encouraging PRSPs and istrative resources in the PMCs, which had a preparing CASs) might not be applicable on its negative impact on the quality and quantity of 1 2 6 A N N E X I : C H A I R M A N ' S S U M M A R Y: C O M M I T T E E O N D E V E L O P M E N T E F F E C T I V E N E S S its services, and expressed hope that, in addi- identifying and providing advice in specific tion to donor trust funds,the Bank will be able areas. OED and management agreed with the to allocate additional resources to support its importance of regional integration, but noted commitments in the region.Management added that the specific geographical constraints in that it is planning to increase resources avail- the Pacific,significant cultural diversity,as well able for Pacific operations, and stressed the as limited number of regional institutions,make importance of cooperation with other bilat- it an extremely challenging task. Management eral and multilateral partners to catalyze and ex- agreed with the notion of demand-driven co- pand its contribution.There were also questions operation, and stressed its readiness to step whether the selected evaluation time period up both lending and nonlending activities in (ten years) was correct for identifying recent the region,in case of increased client demand. trends and lessons to be learned,taking into ac- Cooperation and coordination. Members em- count important changes that occurred during phasized that although the Bank is and will re- that period such as personnel changes and de- main a limited donor in the region,it should play centralization of the country office.OED noted a more active role in promoting donor coordi- that ten years is generally considered to be an nation and harmonization. At the same time, appropriate period for an in-depth evaluation. some members were interested whether the OED also added that,based on its observations Bank has enough leverage,given its small share and analysis, there were few concrete out- in regional aid finances, to play such a role. comes to justify disaggregating its rating into OED noted that the report emphasized the im- sub-periods. portance of creating local capacity, which has Client orientation. A member was interested proved to be the most efficient mechanism for in the reasons for limited client response to aid coordination worldwide.Members stressed the report and whether additional efforts could the need to coordinate efforts with other donor have been made to generate client interest and initiatives for improving data management and feedback. OED replied that although it has re- statistical capacity in the PMCs.They were sup- ceived few formal written responses to the re- portive of the favorable review of the IFC in- port,there were clear indications that the report volvement in PMCs (South Pacific Project has been received and studied by the coun- Facility,FIAS,"Doing Business" database) and ex- tries.Many members stressed the importance of pressed interest in the possibility of expanding taking into account individual country needs the role of IFC to provide support for private and requests for assistance while developing a sector development. Management agreed that general Regional framework for Bank assistance. IFC could play an important role in many aspects At the same time,one member noted that small of the new strategy and noted that it will try to states with very small bureaucracies often integrate its participation to the extent possible. present a challenging environment for being demand driven, and that under those circum- Chander Mohan Vasudev stances the Bank could be more proactive in Chairman 1 2 7 ENDNOTES 1. The east-to-west span of the area covered by the PMCs is nearly 6,000 miles, greater than the distance between Paris and Los Angeles. 2. An extensive literature exists on the constraints and vulnerabilties facing small states. 3. See Pacific Island Regional Ocean Policy, 2002. 4. Data from Forum Fisheries Agency. 5. Measurement of literacy in the Solomon Islands and Vanuatu (sometimes referred to as"Melanesian Countries") is complicated by the numerous indigenous languages in each country. 6. See ADB 2003 for details and definitions. Each country has a different definition of poverty. Definitions are complicated further because subsistence food production often substitutes for measured income. ADB states that data may be unreliable and should be treated with caution. 7. World Bank estimate. 8. Low-population country (LPC) refers to Bank member countries with populations under 1 million. 9. The Marshall Islands, Micronesia, and Palau. 10. See,for example, ADB, Indigenous Peoples/Ethnic Minorities and Poverty Reduction­Pacific Region, June 2002. 11. The Solomon Islands country assistance strategy was presented to the Board with the Education III Project. 12. When the Bank initiated activities in Timor Leste, it was added to this country department. 13. The Bank has made exceptions to the GNP per capita cut-off for IDA eligibility for some small islands' economies because of their vulnerability to shocks and because they"otherwise would have no access to Bank assistance because they lack creditworthiness."The five PMCs eligible for IDA financing are Kiribati, Samoa,the Solomon Islands,Tonga,and Vanuatu.The other four--Fiji,the Marshall Islands,Micronesia,and Palau--are IBRD eligible only. 14. For example, in 2002, the Bank considered helping create a regional, multicountry utility regulator along the lines of one created in the Eastern Caribbean, but this approach was dropped due to the "limited degree of political cooperation among Pacific States at this time." See PAD, dated November 20, 2002; report no. 24794 of the Samoa Telecom Project, 2003. 15. The major fishing nations in the Pacific are Japan,Taiwan, Korea, Philippines, Spain, the U.S., and China. Only the U.S. has a multilateral fishing license agreement through the Forum Fisheries Agency. 16. According to the Ministry of Finance, regions in Samoa that have the highest inward remittances also show the highest economic activity. 17. In this note,assistance program refers to products and services generated in support of the economic development of a client country during a specified period of time,and client refers to the country that receives the benefits of that program. 18. At a country level, this could have a broad focus as is the case currently in the Solomon Islands in the context of our review of budget stabilization efforts; or a specific sectoral focus on infrastructure management, hazard management or social sectors. 1 2 9 REFERENCES ADB (Asian Development Bank).2003.Millennium Development Goals in the Pacific:Relevance and Progress. Manila. ------. 2002."Indigenous Peoples/Ethnic Minorities and Poverty Reduction--Pacific Region." Manila. ------.1999.Reforms in the Pacific:An Assessment of the Asian Development Bank's Assistance for Reform Programs in the Pacific. Manila. AusAID (Australian Agency for International Development).2003.Why Our Aid Has Failed in the Pacific. Canberra. CROP (Council of Regional Organizations in the Pacific). 2002."Pacific Islands Regional Ocean Policy." Endorsed by the Pacific Islands Forum in 2002, Suva, Fiji Islands. Hughes,Helen.2003."Aid Has Failed in the Pacific."Centre for Independent Studies,IssueAnalysis, No 33, Sydney. OED (Operations Evaluation Department,World Bank). 2003. Toward Country-Led Develop- ment:A Multi-Partner Evaluation of the CDF.Washington, D.C. ------. 1992."The World Bank and Pacific Island Countries." Washington, D.C. World Bank. 2002. "Samoa: Telecommunications and Postal Sector Reform Project." Project Appraisal Document, Report No. 24794.Washington, D.C. 1 3 1 OED PUBLICATIONS Study Series 2003 Annual Review of Development Effectiveness:The Effectiveness of Bank Support for Policy Reform Agricultural Extension:The Kenya Experience Assisting Russia's Transition: An Unprecedented Challenge Bangladesh: Progress Through Partnership Bridging Troubled Waters:Assessing the World Bank Water Resources Strategy The CGIAR:An Independent Meta-Evaluation of the Consultative Group on International Agricultural Research Debt Relief for the Poorest: An OED Review of the HIPC Initiative Developing Towns and Cities: Lessons from Brazil and the Philippines The Drive to Partnership:Aid Coordination and the World Bank Financial Sector Reform:A Review of World Bank Assistance Financing the Global Benefits of Forests:The Bank's GEF Portfolio and the 1991 Forest Strategy and Its Implementation Fiscal Management in Adjustment Lending IDA's Partnership for Poverty Reduction Improving the Lives of the Poor Through Investment in Cities India:The Dairy Revolution Information Infrastructure:The World Bank Group's Experience Investing in Health: Development Effectiveness in the Health, Nutrition, and Population Sector Jordan: Supporting Stable Development in a Challenging Region Lesotho: Development in a Challenging Environment Mainstreaming Gender in World Bank Lending:An Update The Next Ascent: An Evaluation of the Aga Khan Rural Support Program, Pakistan Nongovernmental Organizations in World Bank­Supported Projects:A Review Poland Country Assistance Review: Partnership in a Transition Economy Poverty Reduction in the 1990s:An Evaluation of Strategy and Performance Power for Development:A Review of the World Bank Group's Experience with Private Participation in the Electricity Sector Promoting Environmental Sustainability in Development Reforming Agriculture:The World Bank Goes to Market Sharing Knowledge: Innovations and Remaining Challenges Social Funds:Assessing Effectiveness Uganda: Policy, Participation, People The World Bank's Experience with Post-Conflict Reconstruction The World Bank's Forest Strategy: Striking the Right Balance Zambia Country Assistance Review:Turning an Economy Around Evaluation Country Case Series Bosnia and Herzegovina: Post-Conflict Reconstruction Brazil: Forests in the Balance: Challenges of Conservation with Development Cameroon: Forest Sector Development in a Difficult Political Economy China: From Afforestation to Poverty Alleviation and Natural Forest Management Costa Rica: Forest Strategy and the Evolution of Land Use El Salvador: Post-Conflict Reconstruction India:Alleviating Poverty through Forest Development Indonesia:The Challenges of World Bank Involvement in Forests Uganda: Post-Conflict Reconstruction Proceedings Global Public Policies and Programs: Implications for Financing and Evaluation Lessons of Fiscal Adjustment Lesson from Urban Transport Evaluating the Gender Impact of World Bank Assistance Evaluation and Development:The Institutional Dimension (Transaction Publishers) Evaluation and Poverty Reduction Monitoring & Evaluation Capacity Development in Africa Public Sector Performance--The Critical Role of Evaluation Multilingual Editions Allègement de la dette pour les plus pauvres : Examen OED de l'initiative PPTE Appréciation de l'efficacité du développement : L'évaluation à la Banque mondiale et à la Société financière internationale Determinar la eficacia de las actividades de desarrollo : La evaluación en el Banco Mundial y la Corporación Financiera Internacional Côte d'Ivoire : Revue de l'aide de la Banque mondiale au pays Filipinas: Crisis y oportunidades Reconstruir a Economia de Moçambique : http://www.worldbank.org/oed THE WORLD BANK ISBN 0-8213-6284-4