Today, the Solomon Islands Minister for Finance and Treasury, Rick Hou'enipwela signed a grant financing agreement with the World Bank for a US$2 million Development Policy Operation. The grant provides general budget support that is linked to important policy actions that government has undertaken.
This is the second in a series of two DPO's, totalling US$4 million. They support steps the government is taking to improve public financial management and the effectiveness with which it transforms public resources into public services and goods for all Solomon Islanders, to improve the financial position of key state-owned enterprises, and to improve transparency around revenue in the extractive industry.
Speaking at the signing, Mr. Hou thanked the World Bank for supporting very important reforms that the government is pursuing to ensure Solomon Islanders benefit the most out of government services.
On Wednesday, the World Bank and the Economics Association of Solomon Islands, EASI, held a seminar to discuss the logic behind the policy-linked budget support which donors, including the World Bank are providing to government.
Presenting at the seminar, World Bank Country Economist Timothy Bulman explained, policy-linked budget support offers a very effective means of supporting particular reform programs and can help reform champions in government to advance their work.
He said Development Policy Operations go directly into government accounts and are spent by the government through its budget and financial management systems, reflecting the government's priorities.
Bulman said robust engagement with government by donors through the Core Economic Working Group, CEWG, is important to agree on actions that are crucial for moving the reform agenda forward.
"Policy areas that have been linked to the World Bank's first series of budget support include: broadening of community engagement around the budget process, developing the systems and capacity to better track expenditures, improving the quality of budget formation and execution, strengthening the financial health of key state-owned enterprises, and build the foundation for fair and transparent management of extractive industry revenues", said Bulman.
World Bank Country Representative, Anne Tully also gave a brief overview of the World Bank Group Country Partnership Strategy in Solomon Islands for 2013 - 2017.
The strategy outlines areas the World Bank Group will be supporting government, which is to underpin improvements in the delivery of services, and create economic resilience against global shocks with the aim to reduce poverty and boost shared prosperity for all Solomon Islanders.
"We are happy to enter into a new partnership strategy with Solomon Islands which will guide us to build on the gains that have been achieved since the Bank opened an office in Honiara in November 2008," said Ms Tully.
Press Release: World Bank