The Asian Development Bank (ADB) and the Government of Solomon Islands have signed a $30 million policy-based concessional loan to strengthen reforms focused on improving the country’s fiscal position as well as meeting its international climate change commitments and efforts in mitigation and lowering emissions.
Read also – ADB Approves $600 Mn Budget Support to Bangladesh to Strengthen Economic Management and Governance
The agreement for the second subprogram of the Supporting Fiscal and Economic Recovery Program was signed at the ADB Headquarters in Manila by ADB Executive Director Rachel Thompson, on behalf of the Government of Solomon Islands, and ADB Director General for the Pacific Leah Gutierrez. ADB approved the policy-based loan on 9 December.
Read also – USA Policy Changes Likely to Impact Asia and Pacific’s Growth
“Subprogram 2 of this ADB-supported initiative reflects the importance of climate change actions in the country’s economic and fiscal systems,” said Ms. Gutierrez. “It is encouraging to see that Solomon Islands has embraced the program’s reforms to support a resilient economic and fiscal recovery.”
Subprogram 2 is the final subprogram in this series, deepening the reforms initiated under subprogram 1 and adding new reforms to boost climate change resilience.
Reforms under the program focus on tax reform for domestic resource mobilization, public financial management for fiscal resilience, and the enabling environment for private sector recovery. Some key reforms underpinning the country’s economic recovery and rebuilding the government’s fiscal position caused by the COVID-19 pandemic include progressing the government’s tax review into a comprehensive review of income tax, introducing a public investment management system, initiating a fiscal anchor and monitoring regime, and undertaking reviews of key policies like financial institutions and insurance to improve the conditions for the private sector to flourish.
The governments of Australia and New Zealand, along with the World Bank, have provided parallel cofinancing. The program was designed in coordination with the International Monetary Fund.
About ADB
The Asian Development Bank (ADB) is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. It assists its members and partners by providing loans, technical assistance, grants, and equity investments to promote social and economic development. Established in 1966, it is owned by 69 members—49 from the region.
