World Bank Approves Emergency Food Crisis Grant for 62,000 Residents of Kiribati's Outer Islands

May 6, 2011

US$2 Million Food Crisis Response Grant to Support Government’s Import Levy Fund

HANOI, May 6, 2011 – The World Bank and the Government of Kiribati today signed an emergency US$2 million grant agreement that supports the Government’s Import Levy Fund (ILF). The Food Crisis Response Grant will help improve the affordability and availability of food for the 62,000 residents of Kiribati’s Outer Islands. Representatives of the Government of Kiribati and the World Bank were in Hanoi attending the annual meeting of the Asian Development Bank.

Kiribati imports most of its foods and has been hit particularly hard by high and volatile food and energy prices. Worst affected are the people living in the Outer Islands, where households already spend 50 percent of their budget on food.

Almost half of Kiribati’s population lives on the outer islands of the Gilbert Group, which includes North Tarawa, with 9.6 percent in the Line and Phoenix Islands. The remainder lives in South Tarawa, the country’s only urban area.

Without financial support to the ILF, it is expected that food costs would increase significantly for people living in the Outer Islands. This could leave thousands of households at risk of food insecurity.

“The Import Levy Fund is critical for ensuring the people of Kiribati can access the food they need and feed their families,” said Ferid Belhaj, World Bank Country Director for the Pacific Islands. “In addition to supporting the Fund and ensuring its long-term viability, the Food Crisis Emergency Response Grant will be part of a longer-term strategy to support the Government of Kiribati in developing sustainable programs for food security and the environment.”

The ILF was created in 1972 to subsidize transport costs between South Tarawa and the Outer Islands. It is one of the main mechanisms through which the Government can reduce the cost of living in the Outer Islands and ensure food remains affordable throughout Kiribati.

The Food Crisis Response Grant from the World Bank will enable the government to continue the ILF. At the same time measures will be taken to improve the efficiency and sustainability of the program through a separate technical assistance operation.

The Grant is being financed by the World Bank’s Food Price Crisis Response Core Multidonor Trust Fund.

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