'A Good Partner'

The Asian Development Bank's sub-regional headquarters in Suva opened to considerable fanfare earlier this year, with the ADB President Tadao Chino making the trip from Manila to say the new office reaffirms the bank's commitment to reducing poverty in the region. The office will oversee ADB operations in Cook Islands, Fiji, Samoa, Tonga and Tuvalu.

Chino told dignitaries at the opening that, "the new office will … further strengthen our relations with the governments, other donor agencies, the private sector and non government organizations and civil society."

It's a sentiment reinforced by Regional Director, Sirpa H. Jarvenpaa, who says the greater proximity to projects and the work will mean programs correspond to the real need in communities.

The ADB has decades of history in the region. Samoa joined the ADB in 1966, its foundation year. Palau was the most recent Pacific state to join in 2003.

Current ADB investment in the South Pacific stands at almost $1.8 billion. Loans make up $1.6 billion of this amount, and technical assistance $198 million. Jarvenpaa says the region has received about 2 percent of the ADB's total loans since establishment in 1966, "we would like to think that we are a pretty good partner." Jarvenpaa believes the Suva office will bring a number of benefits, "(I) would expect there will be an increase (in loans and assistance), not a sudden one, but a gradual increase."

All ADB programs address an overarching goal of poverty alleviation. The ADB considers the private sector a major partner in this work. Jarvenpaa says the bank has organized private sector assessments to look at the enabling environment in Pacific Island countries, the cost of doing business, what impediments exist, the availability of credit, utility and labor costs, access to collateral and access to credit. This work is underpinned by looking at the benefits of small government.

The ADB is keen to expand its micro finance projects and work towards an outer island development program in Fiji. Photo: Samantha Magick

Assessments in the Marshall Islands, Papua New Guinea, Vanuatu and Samoa comprise the report "Swimming Against The Tide," which states, "(government) needs to understand the problems that affect the business community while at the same time maintain sufficient insulation from special interests seeking to promote their own concerns at the expense of economic efficiency."

"At the national level all of our programs support private sector development, …(and) look at trying to reduce government operations where the private sector does it better," Jarvenpaa says.

The ADB's Asian Development Outlook 2003 estimated the economies of Pacific developing countries are expected to grow by a modest 2.5 percent this year. Jarvenpaa believes the main challenge to this growth is political stability, but she is optimistic about a number of sectors. "Tourism is one of the main drivers (of economic growth), and also new opportunities that may be possible through trade agreements."

She also points to fisheries and other primary sectors, forestry, and value added services such as the textile industry, as areas of potential growth. The ADB is looking at alternative fisheries licensing options.

She says while there is a debate internationally "about how far micro finance can help in alleviating impediments for rural and disadvantaged communities," Jarvenpaa believes that if projects are carefully designed, and work within existing networks and infrastructures, they provide a lot of benefits. The ADB hopes to expand this type of program in the region, and look at using existing financial intermediaries.

"We are not discouraged, and we will be continuing our work in this sector," she says