The Asian Development Bank (ADB) plans to spend up to $2.5 billion in loans and grants to strengthen economic development in 14 Pacific Island countries after it unveiled a new five-year strategy on 1 September.

Development has been difficult in Pacific Island countries due to their small size and scattered islands that are isolated from each other. This translates into very high costs for providing services and doing business. Pacific Islands are also vulnerable to climate change and natural disasters.

Mr Xianbin Yao, Director General of ADB’s Pacific Department said support is needed across key areas in order for development growth to occur in the Pacific.

“The development challenges in the Pacific region demand support across multiple sectors, efficient use of financial resources, capacity building and knowledge transfer, and close coordination with government counterparts and development partners.”

“Our new Pacific Approach 2016-2020 will prioritize our assistance through a three-pronged plan to tackle these issues,” he said.

The strategy will focus on infrastructure such as transport, information and communication technology, renewable energy, electronic delivery of health and other services, as well as better access to power supplies.

It aims to reduce the cost of doing business through modernizing tax systems, boosting access to credit and reforming state-owned enterprises. It will also continue to support legislative and financial reforms to increase private sector growth, including secured transactions frameworks. Economic opportunities will also continue to be identified to empower women in the Pacific.

In addition, the strategy will help to strengthen Pacific Island countries public finances including access to climate funding and look at ways of managing natural resources. 

Countries included in this strategy include the Cook Islands, Kiribati, Republic of the Marshall Islands, Federated States of Micronesia, Nauru, Palau, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu. The larger Pacific countries of Fiji, Papua New Guinea and Timor-Leste already have individual partnership strategies with the ADB.