MANILA, PHILIPPINES - The Asian Development Bank (ADB) and the Government of the Republic of Vanuatu have agreed to a new strategic partnership aimed at reducing poverty and promoting private-sector led sustainable growth.

ADB's Board of Directors approved the Country Partnership Strategy (CPS) 2010-2014, which provides for about $32 million in lending support and a further $5 million in technical assistance.

"The CPS provides a platform for ADB and the Government to work together to improve the effectiveness of the assistance earmarked under the strategy," said S. Hafeez Rahman, Director General of ADB's Pacific Department. "It will support Vanuatu's fight against poverty and help the country meet some of its key development targets."

Vanuatu has become one of the fastest growing economies in the Pacific, with tourism, construction and foreign aid driving its growth. However, growth has been largely confined to urban areas and it has generated few jobs outside of the main urban centers. The nation is struggling to meet its Millennium Development Goals (MDG), particularly reductions in maternal mortality rates and access to sanitation.

The CPS will focus on urban development by improving access to sanitation and drainage facilities in the capital, Port Vila, and its surrounds, as well as improve access to markets and to social services through the improvement of the nation's transport systems and upgrading of key transport infrastructure. It will also support greater energy efficiency, and will enhance the delivery of electricity services to rural areas.

The CPS also aligns with the Government's goal of promoting inclusive, sustainable growth through the development of its nascent private sector. Although still small, Vanuatu's private sector has the potential to grow strongly if constraints to doing business are removed.

"The CPS aims to boost private sector development by continuing to assist the Government with improvements to Vanuatu's business and legal systems, increasing access to finance opportunities, and reforming state-owned enterprises," said Eugenue Zhukov, Regional Director of ADB's Pacific Liaison and Coordination Office in Sydney.

The CPS was developed in close coordination with key development partners in line with the Government's poverty reduction strategy, Priorities and Action Agenda for 2006-2015, along with its Planning Long, Acting Short program. This is the first time ADB and Vanuatu have entered into a CPS since Vanuatu joined the ADB in 1981.

A CPS is ADB's primary planning instrument for member countries that also serves to monitor and evaluate the country's development performance during the timeframe of the strategy.

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