An ADB policy paper on Fiji’s country classification recommended the reclassification of Fiji from group C to group B under ADB’s Graduation Policy.
The international bank identified a number of economic weaknesses in Fiji’s public debt, downgraded international credit ratings and vulnerability to economic shocks.
Fiji’s reclassification from Group C – the strongest grade for its developing member countries – to Group B would mean that Fiji would receive $128 million in funding from the bank this year.
The change was expected to come into effect from January 1 after the ADB board approval, according to an ADB policy paper published in November last year.
Under the reclassification, Fiji would be able to access funds under ADB’s 13 thematic pool grants that included funding for areas like climate adaption and disaster and debt sustainability.
“After Fiji’s classification as a group B country, ADB will make available an initial allocation of $60 million ($F128 million) in concessional OCR (ordinary capital resources) resources during 2022 following the principles established in ADB’s Concessional Assistance Policy,” the ADB stated.
The bank said while recommending the reclassification of Fiji from group C to group B, economic data from the country was taken into consideration that reflected the impact of the COVID-19 pandemic. “The assessment focuses on the fundamental factors affecting Fiji’s medium-term prospects.”
The ADB noted that Fiji remained a small island developing state (SIDS), “coupled with growing risks from disasters triggered by natural hazards and climate change”.
“The assessment of Fiji’s creditworthiness closely considers its SIDS status together with the recognition by ADB and the global development community of the growing vulnerability that SIDS face, and their limited policy response options following disaster and emergency events.”
The ADB stated it discussed the proposed reclassification with the Government of Fiji.
Questions sent to Economy Minister Aiyaz Sayed-Khaiyum in December remain unanswered.
