Country Operations Business Plan. Samoa October 2016

Transcription

1 Country Operations Business Plan October 2016 Samoa This document is being disclosed to the public in accordance with ADB's Public Communications Policy 2011.

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3 CURRENCY EQUIVALENTS (As of 26 September 2016) Currency unit tala (ST) ST$1.00 = $ $1.00 = ST ADB ADF COBP TA ABBREVIATIONS Asian Development Bank Asian Development Fund country operations business plan technical assistance NOTES (i) (ii) The fiscal year (FY) of the government and its agencies ends on 30 June. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2016 ends on 30 June In this report, $ refers to US dollars unless otherwise stated. Vice-President S. Groff, Operations 2 Director General X. Yao, Pacific Department (PARD) Regional Director R. Jauncey, Pacific Subregional Office, PARD Team leader S. Singh, Senior Public Management Officer, PARD Team members S. Blaik, Principal Urban Development Specialist, PARD P. Chiang, Transport Specialist, PARD C. Currie, Senior Country Economist, PARD T. Faletau, Safeguards Officer, PARD M. Hazelman, Associate Project Analyst, PARD G. King, Senior Project Officer (Financial Management), PARD D. Ling, Transport Specialist, PARD M. Melei, Senior Country Coordination Officer, PARD L. Sovea, Senior Programs Assistant, PARD In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

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5 CONTENTS Page I. CONSISTENCY OF BUSINESS PLAN WITH THE COUNTRY PARTNERSHIP STRATEGY 1 II. INDICATIVE RESOURCE PARAMETERS 2 III. SUMMARY OF CHANGES TO LENDING AND NONLENDING PROGRAMS 2 APPENDIXES 1. Country Assistance Results Areas 3 2. List of Linked Documents 4 3. Indicative Assistance Pipeline 5 4. Assistance Program for Current Year 7 5. List of Indicative Knowledge Publications and Events 9

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7 I. CONSISTENCY OF BUSINESS PLAN WITH THE COUNTRY PARTNERSHIP STRATEGY 1. The country operations business plan (COBP), is aligned with the Asian Development Bank s (ADB s) Pacific Approach , the midterm review of Strategy , and the Strategy for the Development of Samoa, The Strategy for the Development of Samoa places priority on macroeconomic stability, sustainable tourism, a reinvigorated agriculture sector, revitalized exports and the provision of an enabling environment for business development. Improved public sector management and the private sector are seen as key drivers for growth. The updated results framework is in Appendix Recent economic, social, and political developments. Samoa s growth averaged 1.2% between FY2008 and FY2015. This relatively slow progress reflects the impact of the global financial crisis in and substantial losses of output due to the tsunami in 2009 and tropical cyclone Evan in Stronger growth of around 3.5% is expected in FY2016, led by increased activity in the fishing, tourism, transport, electricity, and water sectors. Samoa is well advanced in achieving the Millennium Development Goals. The country graduated to middle-income country status in January 2014, and is ranked 105 out of 186 countries in the 2015 Human Development Index. 3. Fiscal position. While Samoa has significantly reduced debt levels since the late 1990s, external public debt remained high at 57.8% of GDP in FY2015. The fiscal deficit is budgeted at 4.7% of GDP for FY2016. The higher deficit in FY2016 is attributed to a 23% reduction in external grants, combined with lower-than-expected revenue receipts. The government intends to consolidate its fiscal position while keeping in mind the impact on growth. The fiscal deficit in FY2017 is budgeted at 3.5% of GDP. 4. Portfolio performance. Samoa was a founding member of the Asian Development Bank (ADB). Since 1966, ADB has provided $ million in loans, $122.9 million in Asian Development Fund (ADF) grants and other sources, and $32.06 million in technical assistance (TA), largely for agriculture and natural resources, education, energy, finance, and municipal infrastructure services. High transaction costs due to the country s remote location, inefficiencies in state-owned enterprises, an underdeveloped finance sector, and poor access to secure land titles affect implementation of ADB projects in Samoa. Projects under way to provide better access to information and communication technology services will serve to reduce the costs that result from Samoa s remote location. Technical assistance to improve mobilization of land as an economic factor of production as well as support from ADBs Private Sector Development Initiative (PSDI) to improve the performance of public enterprises and improve the business environment for private-sector development Partnerships. ADB is working closely with other development partners in Samoa, including the World Bank, Australia, Japan, the European Union and New Zealand to deliver development assistance to Samoa. ADB has cooperated with these partners on energy, education and communications investments and a number of policy and regulatory reforms. 1 ADB Pacific Approach, Manila; ADB Midterm Review of Strategy 2020: Meeting the Challenges of a Transforming Asia and Pacific. Manila (accessible from list of linked documents in Appendix 2). 2 Government of Samoa Strategy for the Development of Samoa, Apia (accessible from the list of linked documents in Appendix 2). 3 ADB Technical Assistance for the Private Sector Development Initiative. Manila (TA 6353-REG. TA-REG 7430, TA REG-8378). Since mid-2013, debt sustainability ratings include remittances.

8 2 II. INDICATIVE RESOURCE PARAMETERS 6. Resource envelope Samoa, a group A developing member country, is eligible for Asian Development Fund (ADF) grants and concessional ordinary capital resources lending (COL). 4 The indicative ADF grant and COL resource allocation for , including disaster risk reduction (DRR) allocations, is $54.50 million. 5 The final allocation will depend on the available resources, and the outcome of the country performance assessment. ADB will seek additional sources of financing, including cofinancing, regional set-aside (if applicable) and nonsovereign funding (if applicable) to process projects beyond the stipulated resource envelope For the COBP , the Government of Samoa has requested (i) a $5 million policy-based operation in late 2016 and another $5 million in late 2017; (ii) a $22 million upgrade of port facilities in Apia; and (iii) a $25 million investment in a climate-resilient road from Vaitele to Faleolo Airport. The government has requested consideration for possible additional financing for the Samoa AgriBusiness Support project. The government is keen that ADB consider integrating road construction and management of waterways (and drainage), along with possible investments in water supply infrastructure coordinated with other development partners. With the new ADF allocations, as well as the potential to access the Green Climate Fund, a substantial investment is possible over the longer term. The government will consider a possible disaster response facility later in the pipeline. The indicative assistance pipeline for ADF lending products and technical assistance is in Appendix 3 (Table A3.1 and A3.2). 8. TA projects will focus on private-sector development. Samoa will be supported by regional TA projects for state-owned-enterprise reform and public-sector management during the COBP period. ADB s PSDI TA will support a range of private-sector reforms under way in Samoa that include assistance for implementation of the approved Competition Policy and developing a public-private partnership pipeline. PSDI will continue to support, analytical work, state-owned enterprise reforms, review of operations of the Development Bank of Samoa, and for improving the business regulatory environment. Support for climate change adaptation and mitigation activities will be sought, guided by the Climate Change Implementation Plan and utilizing the range of funding windows available. 7 The 2016 lending/grant and TA program is in Appendix 4 (Table 4.1 and 4.2). III. SUMMARY OF CHANGES TO LENDING AND NONLENDING PROGRAMS 9. The lending and nonlending programs have been adjusted to conform to indicative resource parameters for List of knowledge publications and events is in Appendix 5. 4 Terminology reflects combination of ADF lending operations with the OCR balance sheet that takes effect on 1 January For 2016, COL should be understood as ADF lending. 5 The proportion of grants for the resource allocation in will be determined by future debt distress classifications in accordance with the concessional assistance policy. The DRR aims to strengthen disaster resilience and to help spur investment. This additional financing will support (i) stand-alone DRR projects; (ii) discrete DRR components of other grant and loan projects; and (iii) the incremental cost in strengthening the disaster resilience of infrastructure investments operations in Samoa were over programmed with reallocation of 2016 grant resources of $3.25 million and frontloading grant allocation of $1.08 million. 7 ADB Mainstreaming Climate Change in ADB Operations: Climate Change Implementation Plan for the Pacific ( ). Manila.

9 COUNTRY ASSISTANCE RESULTS AREAS ADB Key Country Development Outcomes that ADB Contributes to 1. Energy Harness renewable energy to drive down the cost of electricity and fossil fuel imports and increase access to energy by remote populations 2. Information and Communication Technology Expand ICT infrastructure to diminish geographic isolation, increase business opportunities, and improve knowledge sharing and learning environment 3. Transport Improve domestic and regional connectivity through transport infrastructure Key Areas of Assistance Hydropower generation Submarine cable connection Ports Infrastructure upgrades Indicative Resource Allocation in Amount: $0.0 million Share of COBP envelope: 0% Amount: $0.0 million Share of COBP envelope: 0% Amount: $22.0 million Share of COBP envelope: 41% Changes from Last COBP No changes No changes This assistance was on standby in the last COBP 4. Public Sector Management Improve economic and financial management Road Infrastructure upgrades Policy-based grant and loan 5. Agriculture, Natural Resources, and Rural Development Increase agribusiness contribution to the economy, Samoa Agribusiness agriculture productivity and agricultural exports Support Project Amount: $25.0 million Share of COBP envelope:47% Amount: $5.0 million Share of COBP envelope:9% Share of COBP envelope: 0% Co-financing of $1 million ADB = Asian Development Bank; COBP = country operations business plan; ICT = information and communication technology. Source: Asian Development Bank. New request for co-financing with World Bank New request for policy based support Government of Australia has expressed interest in possible co-financing Appendix 1 3

10 4 Appendix 2 LIST OF LINKED DOCUMENTS 1. ADB s Pacific Approach, Strategy 2020: The Long-Term Strategic Framework of the Asian Development Bank, Midterm Review of Strategy 2020: Meeting the Challenges of a Transforming Asia and Pacific 4. Strategy for the Development of Samoa, : Boosting Productivity for Sustainable Development 5. Samoa: Staff Report for the 2015 Article IV Consultation Debt Sustainability Analysis

11 INDICATIVE ASSISTANCE PIPELINE Table A3.1: Lending Products, Project/Program Name 2017 Firm Fiscal Resilience Improvement Program, Subprogram 2 Sector Poverty Targeting Strategic Agendas and Drivers of Change PSM GI GCD/IEG/ PAR Division Year of PPTA / PDA Total OCR COL Cost ($ million) ADB ADF Grants Total Gov t Cofinance SPSO None a Total Standby Climate Resilient 24km West TRA GI ESG/IEG/ Coast Road Project b PAR/PSD PATE None Total Firm Port Infrastructure Development c Project TRA GI ESG/GCD/ IEG/PAR/ PSD/RCI PATE TBC TBC Total Standby Land Transport Project d TRA GI ESG/IEG/ PAR/ PSD SPSO TBC TBC Total TBC TBC ADB = Asian Development Bank; ADF = Asian Development Fund; COL = concessional ordinary capital resources lending; ESG = environmentally sustainable growth; GCD = governance and capacity development; GI = general intervention; gov t = government; IEG = inclusive economic growth; KNS = knowledge solutions; NA = not applicable; PAR = partnerships; PATE = Transport, Energy, and Natural Resources Division; PDA = project design agreement; PPTA = project preparatory technical assistance; PSD = private sector development; RCI = regional cooperation and integration; TBC = to be confirmed; TRA = transport. a This amount includes parallel financing grants of $2.3 million from Australia, $2.5 million from New Zealand, and $5.7 million from the European Union. b The full cost of upgrading the road is about $40 million, including $25 million for associated utilities (such as under-grounding the power lines). World Bank currently has $15 million (in IDA and PPCR funds) to rehabilitate 6 7 km of the road, and is keen for co-financing of $20 25 million to complete works along the whole stretch. c Subject to PPTA, and availability of ADF RCI resources. The proposed port project is targeting $14.5 million funding from regional ADF and $7.5 million from country resources. d The project is subject to government clarification on nature of ADB engagement in land transport sector. This project will use $9.4 million in DRR financing. The standby project will consider possible co-financing with other development partners and GCF and include components such as watershed management. Source: Asian Development Bank estimates. Appendix 3 5

12 Assistance Name Table A3.2: Nonlending Products and Services, Sector Division Assistance Type Sources of Funding ADB Others Amount Amount Source ($ 000) Source ($ 000) Total ($ 000) 6 Appendix None NA NA NA NA Infrastructure Development project a TRA PATE PPTA TASF None NA NA NA NA ADB = Asian Development Bank; NA = not applicable; PATE = Transport, Energy and Natural Resources Division; PPTA = project preparatory technical assistance; TASF = Technical Assistance Special Fund; TBC = to be confirmed; TRA = transport. a PPTA to be confirmed if the standby 2019 transport project is confirmed Source: Asian Development Bank estimates.

13 Poverty Targeting ASSISTANCE PROGRAM FOR CURRENT YEAR Table A4.1: Lending Products, 2016 Strategic Agendas and Drivers of Change Division Year of PPTA / PDA Cost ($ million) ADB ADF Cofinance Project/Program Name Sector Total OCR Loans Grants Total Gov t 2016 Fiscal Resilience Improvement PSM GI GCD/IEG/ SPSO None a Program, Subprogram 1 PAR Total ADB = Asian Development Bank; ADF = Asian Development Fund;; GI = general intervention; GCD = governance and capacity development; gov t = government; IEG = inclusive economic growth; OCR = ordinary capital resources; PAR = partnerships; PDA = project design agreement; PPTA = project preparatory technical assistance; PSM = public sector management. a This amount includes parallel financing grants of $2.3 million from Australia, $2.5 million from New Zealand, and $5.7 million from the European Union and a loan of $5 million from World Bank. These will not be managed by ADB. Source: Asian Development Bank estimates Table A4.2: Nonlending Products and Services, 2016 Assistance Name 2016 Ports Development Masterplan (TA8889 Additional Financing) Sector Division Assistance Type Sources of Funding ADB Others Source Amount ($ 000) Source Amount ($'000) Total ($'000) TRA PATE PATA TASF Total ADB = Asian Development Bank; PATA = policy and advisory technical assistance; PATE = Transport, Energy, and Natural Resources Division; TASF = Technical Assistance Special Fund; TRA = transport. Source: Asian Development Bank estimates. Appendix 4 7

14 LIST OF INDICATIVE KNOWLEDGE PUBLICATIONS AND EVENTS Table A5.1: Knowledge Publications and Events for 2017 Title of Publication or Event Subject Type Department or SG or TG Technical Assistance Pacific Economic Monitor (December 2017) Publication or document: report PARD RETA 8565 Pacific Transport Update 2017 Transport Publication or document: report PARD Pacific Economic Monitor (July 2017) Economics Publication or document: report PARD RETA 8565 Finding Balance in 2017 Private Publication or document: report PARD RETA 8378 sector Pacific Energy Update 2017 Publication or document: report PARD Country Information Note Samoa 2017 Publication or document: report PARD 8 Appendix 5 Asian Development Bank and Samoa Fact Sheet 2017 Publication or document: awareness raising brochure or leaflet Pacific Subregional Office Brochure 2017 Publication or document: awareness raising brochure or leaflet ADO South Pacific Economies 2017 Publication or document: report PARD ADB = Asian Development Bank; DER = Department of External Relation; PARD = Pacific Department; RETA = regional technical assistance; SG = sector group, TG = thematic group. Note: Publications may include databases, multimedia, and other forms of documentation. Events may include event organization and training or capacity development. Source: Asian Development Bank. PARD PARD

15 Table A5.2: Additional Knowledge Publications and Events Delivered in 2016 Department Title of Publication or Event Subject Type or SG or TG ADO Update South Pacific Economies 2016 Economics Publication or document: report PARD Technical Assistance ADO = Asian Development Outlook; PARD = Pacific Department; SG = sector group; TG = thematic group. Note: Publications may include databases, multimedia, and other forms of documentation. Events may include event organization and training or capacity development. The table includes additional knowledge publications and events delivered outside the list of indicative knowledge publications and events included in the country operations business plan. Source: Asian Development Bank. Table A5.3: Innovation, Advanced Technology, and Pilot Initiatives to be Implemented in 2017 Item Nature Project Number Sector or Theme Division Total number of innovation, advanced technology, and pilot initiatives = 0 NA NA NA NA Source(s): Asian Development Bank. Appendix 5 9