Stronger Education, Health and Public Finances for Tuvalu

March 26, 2015

World Bank Group Board approves new development policy operation

WASHINGTON, March 26, 2014—The World Bank Group’s Board of Executive Directors today approved a Second Development Policy Operation (DPO) for the Pacific Island country of Tuvalu. This second in a series of two DPOs will assist the Government of Tuvalu to further strengthen its public financial management, improve the delivery of social services including health and education, and bolster financial reserves for times of need.

“The Government of Tuvalu is dedicated to progressive reforms which will ensure our ability to respond to shocks without impeding the level of service delivery,” said Hon. Maatia Toafa, Tuvalu’s Minister of Finance and Economic Development. “The reforms will help streamline and redirect public funds into areas of priority, allowing us to meet the needs of Tuvaluans with services that are equitable and cost effective.”

The program will focus on strengthening public financial management through improved spending control, better management of revenues from fisheries, and streamlined reporting of local governments – Kapaules. The program will also support improved service delivery through better management of Tuvalu’s essential overseas medical treatment scheme; and strengthen vocational training, especially access for women, by broadening training available at the Tuvalu Maritime Training Institute.

“Well-managed public finances are essential for a government to effectively respond in times of environmental and economic shocks,” said Franz Drees-Gross, Country Director for the World Bank in Timor-Leste, Papua New Guinea, and the Pacific Islands. “This operation will help the Government of Tuvalu overcome some of the challenges that arise from being one of the globe’s smallest, most isolated nations – ensuring a strong public sector and better health and education, especially for women.”

Equitable and cost-effective service delivery will be driven by reforms enabling the government to begin directing education spending towards employment-orientated vocational training, while also supporting increased spending on basic healthcare, relied on heavily by poorer households. Similarly, poor and remote households will enjoy improved access to services through reforms to enhance the accountability and transparency of outer island Kapaules. Public financial management reforms will contribute to improving poverty and social outcomes overall by making the budget a more effective tool for responding to national poverty and social needs, particularly in times of economic or environmental distress.

The Tuvalu Second DPO will be funded through a US$1.5 million grant from the International Development Association (IDA), the World Bank Group’s fund for the poorest countries.

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