The Asian Development Bank (ADB) is providing $10 million in budget support to the Solomon Islands that will help the economy recover from the global economic crisis.The cluster of grants, approved by ADB's Board of Directors, supports two subprograms under the Solomon Islands Economic Recovery Support Program. The program supports improved fiscal management, structural measures that will aid economic recovery and help preserve the delivery of basic services.
"The Solomon Islands economy has been among the most affected in the Pacific by the global economic crisis," said Craig Sugden, Senior Economist of ADB's Pacific Department. "ADB is pleased to provide assistance to the Government of Solomon Islands with ongoing economic recovery efforts, particularly in the crucial area of economic and fiscal management."
The global economic crisis brought forward the sharp economic slowdown expected as logging resources approach exhaustion. Economic stagnation and prolonged fiscal stress are looming in the absence of concerted action. The program is ADB's contribution to a collaborative effort by development partners to help the Solomon Islands Government re-build the economy.
Based on the Government's own policy agenda, the program will help diversify the economy away from a dependency on logging and foreign aid by boosting the private sector. In addition to helping achieve the macroeconomic stability needed by the private sector, the program is improving the efficiency of state-owned enterprises, helping open telecommunications to competition, improving the business regulatory environment and upgrading transport infrastructure.
These actions will help realize the growth potential of the agriculture, fishing, tourism and mining.
The Economic Recovery Support Program also responds to the extra hardship imposed on vulnerable groups by the global economic crisis and preceding episode of high inflation. The program ensures additional funds are allocated in the national budget to the delivery of health and education services and to rural infrastructure.
A series of grants totaling $10 million, comprising two subprograms of $5 million each, will be provided from ADB's Asian Development Fund. The Ministry of Finance and Treasury will execute the program which runs from March 2009 to the end of February 2012.
ADB, based in Manila, is dedicated to reducing poverty in the Asia and Pacific region through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members - 48 from the region.
Source: Press Release, Asian Development Bank (ADB)