The program objective is to provide budget support for the Government of Fiji (GOF) to restore fiscal sustainability and inclusive climate-resilient economic growth, which have been adversely affected by the COVID-19 pandemic and coinciding disasters, while building fiscal, community, and private sector resilience to climate change and future shocks.
The program will be co-financed with Asian Development Bank (ADB) to provide a single-tranche policy-based loan (PBL) to GOF. The program comprises three reform areas: (i) public financial management for fiscal resilience and debt sustainability, (ii) public policy for community resilience, and (iii) enabling environment for resilient private sector recovery.
The program builds on and complements reforms under the AIIB and ADB supported Sustained Private Sector-Led Growth Reform Program in 2020, while responding to policy challenges intensified by the pandemic. After its economy’s contraction by an unprecedented 17.2% in 2020, the economy is expected to have further declined by 4.1% in 2021 because of the local COVID-19 outbreak. The program will help create fiscal space to implement a new medium-term reform program that is expected to be finalized in 2022, integrating the post-election government’s reform priorities after national elections expected in the second half of 2022.
The program will support GOF's reforms to systematically mainstream resilience (including climate resilience) into the government’s budgeting and decision-making processes, as well as in its medium-term reform agenda.
The loan will be co-financed with ADB as the lead co-financier. The project’s environmental and social (ES) risks and impacts have been assessed in accordance with ADB’s Safeguard Policy Statement (SPS) and the program will not have any likely environmental or social safeguard issues. To ensure a harmonized approach to addressing the ES risks and impacts of the program, if needed, and as permitted under AIIB’s Environmental and Social Policy (ESP), ADB’s SPS will apply to the program in lieu of AIIB’s ESP. AIIB has reviewed ADB’s SPS and is satisfied that: (a) it is consistent with AIIB’s Articles of Agreement and materially consistent with the provisions of AIIB’s ESP, including the Environmental and Social Exclusion List and the relevant Environmental and Social Standards; and (b) the monitoring procedures that are in place are appropriate for the program. Under its SPS, ADB has categorized this program as Category C for Environment, Involuntary Resettlement, and Indigenous Peoples (equivalent to Category C if AIIB ESP were applicable). The program is proposed by ADB to be categorized as “effective gender mainstreaming”, and includes the following policy actions (i) a gender-sensitive Climate Change Bill 2021; (ii) strategic roll-out of gender-responsive budgeting, complemented by a social assistance policy; (iii) government policy and subsidy schemes for the provision of sustainable and affordable water, sanitation, and electricity services to disadvantaged households; (iv) reforms to reduce compliance requirements and transaction costs (taxes, business licensing, payment systems) and increase financial protection from climate and disaster risks, which have been identified as critical to support the formalization of micro businesses and resilience and growth of small businesses, particularly benefitting women.
The Ministry of Economy (MoE), as the implementing agency, will report against each of the indicators and targets included in the Policy Design and Monitoring Framework at the end of the Program through ADB’s project completion report, which will be shared with the co-financiers, including AIIB.
Asian Infrastructure Investment Bank
Bo Zhang
Investment Operations Officer
Asian Development Bank
Erik Aelbers
Unit Head, Economics and Programming
Home Projects Project Summary Project List Project Details Fiji: Sustainable and Resilient Recovery Program for Fiji
