$7m fiscal grant
3 May, 2016, 12:00 am
FRANKFURT, Germany – The Asian Development Bank (ADB) and the Government of Nauru signed agreements yesterday to provide a combined $US3.8 million ($F7m) in grants to help Nauru strengthen its fiscal sustainability.
This includes a $US2m ($F4m) grant from ADB’s concessional Asian Development Fund and a $US1.8m ($F3m) grant from the Government of Australia.
“Reforms to strengthen fiscal sustainability are crucial for Nauru’s ongoing development and the well-being of its people,” said Xianbin Yao, ADB’s Director General for the Pacific Department who signed the agreement on behalf of ADB.
“This program is supporting critical reforms for more efficient and sustainable public service delivery.”
Nauru’s Secretary of Finance, Martin Hunt signed on behalf of the Government of Nauru.
The program will help improve public financial management and boost the performance of the state-owned power company.
It also establishes the Nauru Intergenerational Trust Fund to help finance public service delivery for future generations, including in health and education.
Nauru is one of the world’s smallest countries with a population of about 10,000 people. It faces several development challenges, including limited arable land and fresh water, a very small private sector, and high levels of public debt.
Education levels are improving, but are still below international standards.
Nauru also has some of the highest rates of non-communicable diseases in the world, such as diabetes and heart disease.
Nauru’s economy has however benefited in recent years from substantial revenue inflows associated with its regional asylum seeker and refugee program and higher fishing license fees because of improved regional fisheries management.
Phosphate exports have dropped sharply because of damage to Nauru’s port facilities but national income nonetheless remains high by historical standards.
ADB’s cumulative disbursements to Nauru so far total $US6.3m ($F13m).
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration.