WASHINGTON, September 5, 2018 - The World Bank’s Board of Executive Directors approved last week a US$7.5 million grant to support Tuvalu’s Fourth Development Policy Operation. Government reforms, under this new operation, will seek to improve early childhood education and care, address the non-communicable diseases epidemic, continue strengthening the management of the country’s reserve assets and public finances, and encourage a more robust banking sector.
“Tuvalu remains fully committed to the partnership with the World Bank under its ongoing development policy operation regarding health, education, economic development and long-term fiscal sustainability,” said Hon. Maatia Toafa, Tuvalu Minister for Finance and Economic Development. “On behalf of the government and people of Tuvalu, I extend our heartfelt appreciation to the Board of the World Bank for the continuing and unwavering support in getting the partnership to the level it is now.”
The operation is structured under two pillars aligned with government priorities:
· First, it aims to improve delivery of health and education services by formally recognizing early childhood care and education as a government mandate, and increasing duties on certain tobacco, alcohol and sugary drinks.
· Second, it will improve macroeconomic and fiscal sustainability by strengthening the management of reserves in the Tuvalu Trust Fund, ensuring an affordable public service, and enhancing banking sector oversight and sustainability. The operation is also expected to boost budget reserves for times of crisis.
“The World Bank is ready to continue its support to Tuvalu’s development of a more sustainable economy, including the country’s ability to absorb shocks without disruption to the level of service delivery,” said Michel Kerf, Country Director for Papua New Guinea and the Pacific Islands. “This project will also build on previous efforts to enhance the quality of key public services and improve delivery for all.”
Activities under the first pillar will ensure that the education provided in the early years is formally recognized and officially incorporated into the nation’s education sector; while increasing the price of tobacco, alcohol and sugary beverages will ultimately reduce the risk of non-communicable diseases for many. Activities under the second pillar will improve oversight of the Tuvalu Trust Fund; strengthen budget planning and transparency around public service staffing decisions, and fully operationalize a banking commission to improve the oversight of the banking sector.
The Fourth Development Policy Operation is funded through a US$7.5 million grant from the International Development Association, the World Bank’s fund for the most in-need countries.