Foreign Assistance: Lessons Learned From Donors' Experiences in the Pacific Region Page: 18 of 60
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Strategies Tailored to Local
Development Conditions and
Strategies That Incorporate
1995 and 1998, the ADB supported reform efforts in seven Pacific Island
nations to improve policy environments, including fiscal reform programs
in the FSM and the RMI, which led to reductions of 37 percent and 33
percent, respectively, in the size of their public sectors.
In 2000, the ADB adopted a new development strategy for the Pacific that
takes a subregional approach, underscoring the differences between
various Pacific Island nations. The ADB strategy separates the island
nations into three categories that are based on the nations' resource
profiles and their growth prospects. For example, the ADB lists the RMI
and the FSM in different categories. The strategy for the RMI, which is an
island atoll nation with severe development disadvantages emphasizes the
use of trust funds to support sustainable financing of basic services and
development of niche markets such as tourism. In contrast, the strategy
for the FSM, which falls into the category of countries with a higher skill
base, good growth prospects, and moderate resource potential, focuses on
physical infrastructure and private sector development to promote
According to the ADB's strategy, the implementation of its previous
strategy in 1996 provided several lessons, including the need (1) for the
Pacific Island nations to have stronger ownership of policy and reform
programs and (2) to design development strategies that take account of
local cultures and capacities.
Flexible strategies are allowing donors to use their assistance as
incentives and disincentives. Australia recently created two development
incentives within its strategies that can provide funds for activities outside
the annual program plan. One incentive, a fund for Papua New Guinea, has
two components: one, a policy component to encourage and reward the
effective implementation of the government development policy, and, two,
a program component to fund organizations that have track records of
good program management. Another incentive, the Policy and
Management Reform initiative in the Pacific, allocates funds competitively
to countries on the basis of demonstrated commitment to reform.
Australia provided assistance from the fund to Vanuatu, for example, to
reinforce a new government's commitment to economic and public sector
Flexibility in their strategies also enabled Australia and New Zealand to
stop delivering assistance under undesirable circumstances. New Zealand,
for example, suspended funding to the governments of Fiji, in response to
a coup, and to the Solomon Islands, in response to civil unrest, while
GAO-01-808 Pacific Development Assistance Strategies
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United States. General Accounting Office. Foreign Assistance: Lessons Learned From Donors' Experiences in the Pacific Region, report, August 17, 2001; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc293232/m1/18/: accessed February 20, 2019), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.