Document of The World Bank FOR OFFICIAL USE ONLY Report No. 145750-EAP INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL FINANCE CORPORATION MULTILATERAL INVESTMENT GUARANTEE AGENCY PERFORMANCE AND LEARNING REVIEW OF THE REGIONAL PARTNERSHIP FRAMEWORK FOR NINE PACIFIC ISLAND COUNTRIES (PIC9): THE REPUBLIC OF KIRIBATI, THE REPUBLIC OF THE MARSHALL ISLANDS, THE FEDERATED STATES OF MICRONESIA, THE REPUBLIC OF NAURU, THE REPUBLIC OF PALAU, THE INDEPENDENT STATE OF SAMOA, THE KINGDOM OF TONGA, TUVALU, AND THE REPUBLIC OF VANUATU FOR THE PERIOD FY2017-FY21 February 6, 2020 Papua New Guinea and Pacific Islands Country Management Unit East Asia and the Pacific Region The International Finance Corporation East Asia and the Pacific Region The Multilateral Investment Guarantee Agency This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank Group authorization. The date of the last Regional Partnership was February 28, 2017. FISCAL YEAR Country FY The Republic of Kiribati 1 January - 31 December The Republic of the Marshall Islands 1 October - 30 September The Federated States of Micronesia 1 October - 30 September The Republic of Nauru 1 July - 30 June The Republic of Palau 1 October - 30 September The Independent State of Samoa 1 July - 30 June The Kingdom of Tonga 1 July - 30 June Tuvalu 1 January - 31 December The Republic of Vanuatu 1 January - 31 December CURRENCY EQUIVALENTS As of December 31, 2019 Country Currency 1 US$ equivalent The Republic of Kiribati Australian dollar (AU$) 1 US$ = 1.43 AU$ The Republic of the Marshall Islands United States dollar (US$) n.a. The Federated States of Micronesia United States dollar (US$) n.a. The Republic of Nauru Australian dollar (AU$) 1 US$ = 1.43 AU$ The Republic of Palau United States dollar (US$) n.a. The Independent State of Samoa Tālā (SAT) 1 US$ = 2.61 WST The Kingdom of Tonga Paʻanga (TOP) 1 US$ = 2.30 TOP Tuvalu Australian dollar (AU$) 1 US$ = 1.43 AU$ The Republic of Vanuatu Vatu (VUV) 1 US$ = 114.00 VUV ii ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank APIP Australia–Pacific Islands Partnership Trust Fund APP Ave Pa’anga Pau (remittance voucher) APW Faleolo Airport ASA Advisory Services and Analytics AU$ Australian dollar BAV Bankers Association of Vanuatu Cat-DDOs Catastrophe Deferred Drawdown Options CCPA Climate Change Policy Assessment CERC Contingency Emergency Response Component CMU Country Management Unit CXI Cassidy Airport CSU Central Support Unit CY Calendar year DFAT Department of Foreign Affairs and Trade (Australia) DOF Department of Finance DPL Development Policy Loan DPO Development policy operation EA Executing agency EAP East Asia and Pacific ECCE Early childhood care and education EEZ Exclusive Economic Zone EMC East Micronesia Cable ESF Environmental and Social Framework FM Financial management FSM Federated States of Micronesia FUN Funafuti Airport FY Fiscal year GDP Gross domestic product GBV Gender-based violence GHG Greenhouse gas HCI Human Capital Index HIES Household Income Expenditure Survey IA Implementing agency IBRD International Bank for Reconstruction and Development ICR Implementation Completion and Results Report ICT Information and communication technology IDA International Development Association IFC International Finance Corporation IMF International Monetary Fund IPF Investment project financing IRU International Road Transport Union ISR Implementation Status and Results Report km Kilometers kW Kilowatts kWh Kilowatt hours Mbps Megabits per second MIGA Multilateral Investment Guarantee Agency MOF Ministry of Finance iii MTDMS Medium-Term Debt Management Strategy MW Megawatts MWh Megawatt hours NBV National Bank of Vanuatu NCD Non-communicable disease NDC Nationally Determined Contribution NEOC National Emergency Operations Center NPL Non-performing loan NZMFAT New Zealand Ministry of Foreign Affairs and Trade NZ$ New Zealand dollar ODA Official Development Assistance P4R Program for Results PACER Pacific Agreement on Closer Economic Relations PAIP Pacific Aviation Investment Program PASO Pacific Aviation Safety Office PCRAFI Pacific Catastrophe Risk Assessment and Financing Initiative PEARL Pacific Early Age Readiness and Learning PER Public Expenditure Review PERMU Public Enterprise Review and Monitoring Unit (PERMU) PF Procurement Framework PF4 Pacific Facility 4 PFTAC Pacific Financial Technical Assistance Centre PIC9 Nine Pacific Island Countries (the Republic of Kiribati, the Republic of the Marshall Islands (RMI), the Federated States of Micronesia (FSM), the Republic of Nauru, the Republic of Palau, the Independent State of Samoa, the Kingdom of Tonga, Tuvalu, and the Republic of Vanuatu) PICBP Pacific Islands Capacity Building Program PICs Pacific Island Countries PLP-ESS Pacific Learning Partnership for Environmental and Social Standards PLR Performance and Learning Review PLS Pacific Labour Scheme PMU Project Management Units PNA Parties to the Nauru Agreement PPA Programmatic Preparation Advance PPP Purchasing power parity PREP Pacific Resilience Program PRIF Pacific Region Infrastructure Facility PROP Pacific Islands Regional Oceanscape Program PV Photovoltaic RERF Revenue Equalization Reserve Fund RMI Republic of the Marshall Islands RPF Regional Partnership Framework SAT Samoan tala SME Small and medium enterprise SPC Pacific Community SWP [Australian] Seasonal Workers Programme TAE Total Allowable Effort TBC To be confirmed TBU Fua’amotu Airport TC Tropical Cyclone TRW Bonriki Airport iv TSCP Tonga Transport Sector Consolidation Project UK United Kingdom USA United States of America US$ United States dollar VAV Vava’u Airport VDS Vessel Day Scheme VLI Bauerfield Airport WBG World Bank Group IBRD IFC MIGA Vice President: Victoria Kwakwa Snezana Stoiljkovic Hiroshi Matano Director: Michel Kerf Vivek Pathak Merli Baroudi Task Team Leaders: Marie Michelle Milissa Day Eugeniu Croitor Leonardo Manzanillo Daniel Street Lasse Melgaard v CONTENTS I. INTRODUCTION ...................................................................................................................................... 1 II. MAIN CHANGES IN COUNTRY CONTEXT .................................................................................................. 2 CHANGES IN POVERTY REDUCTION AND SHARED PROSPERITY .......................................................................................... 2 KEY MACROECONOMIC AND DEBT DEVELOPMENTS ....................................................................................................... 2 KEY POLITICAL AND SOCIAL DEVELOPMENTS ................................................................................................................ 3 NATURAL DISASTERS AND EMERGENCIES OVER THE RPF PERIOD ...................................................................................... 3 NEW OR EMERGING COUNTRY/DEVELOPMENT ISSUES ................................................................................................... 5 III. SUMMARY OF PROGRAM IMPLEMENTATION ......................................................................................... 7 OVERVIEW OF PROGRESS TOWARD ACHIEVING RPF OBJECTIVES ..................................................................................... 7 Focus Area 1: Fully exploiting available economic opportunities—On track ................................................ 7 Focus Area 2: Enhancing access to employment opportunities—On track ................................................... 8 Focus Area 3: Protecting incomes and livelihoods—On track ....................................................................... 8 Focus Area 4: Strengthening the enablers of growth opportunities—On track ............................................ 9 IDA18 Policy Commitments and Corporate Priorities .................................................................................. 11 PORTFOLIO OVERVIEW........................................................................................................................................... 12 World Bank.................................................................................................................................................. 12 International Finance Corporation .............................................................................................................. 14 OVERVIEW OF IMPLEMENTATION CHALLENGES ........................................................................................................... 16 Operating environment ............................................................................................................................... 16 Fiduciary management ............................................................................................................................... 17 Project management................................................................................................................................... 18 RESPONDING TO IMPLEMENTATION CHALLENGES IN THE PIC9 ....................................................................................... 18 Bolstering implementation capacity ........................................................................................................... 18 Using new instruments available during IDA18 .......................................................................................... 21 Leveraging evolving partnerships in the Pacific .......................................................................................... 21 IV. EMERGING LESSONS FROM PORTFOLIO AND PROGRAM IMPLEMENTATION AND PERFORMANCE ...... 23 WHAT HAS WORKED WELL .................................................................................................................................... 23 Selectivity .................................................................................................................................................... 23 Increased World Bank staffing across the Pacific, combined with the establishment of CSUs ................... 24 Proactive review of individual country portfolios ........................................................................................ 24 A pragmatic approach to the application of fiduciary requirements in the Pacific..................................... 26 Close collaboration with development partners ......................................................................................... 26 WHAT NEEDS IMPROVEMENT ................................................................................................................................. 27 Project readiness and design....................................................................................................................... 27 Monitoring and evaluation ......................................................................................................................... 27 Working with regional organizations to improve project performance ...................................................... 28 A final consideration: The need for more intensive support for safeguards ............................................... 29 V. ADJUSTMENTS TO THE REGIONAL PARTNERSHIP FRAMEWORK ........................................................... 29 VI. RISKS TO THE REGIONAL PARTNERSHIP FRAMEWORK PROGRAM ........................................................ 29 ANNEX 1. UPDATED RPF RESULTS FRAMEWORK ............................................................................................ 31 ANNEX 2. MATRIX OF CHANGES TO THE ORIGINAL RPF RESULTS FRAMEWORK ............................................ 44 ANNEX 3. PROGRESS TOWARD ORIGINAL RPF OBJECTIVES ............................................................................ 63 ANNEX 4. PROGRESS TOWARD REVISED RPF OBJECTIVES .............................................................................. 88 ANNEX 5. NATURAL DISASTERS THAT OCCURRED PRIOR TO AND DURING THE RPF PERIOD ....................... 109 ANNEX 6. COUNTRY PROGRAMS OF IDA-ELIGIBLE PIC9 COUNTRIES ............................................................ 112 REPUBLIC OF KIRIBATI .......................................................................................................................................... 112 REPUBLIC OF THE MARSHALL ISLANDS (RMI) ........................................................................................................... 112 vi FEDERATED STATES OF MICRONESIA (FSM) ............................................................................................................. 112 INDEPENDENT STATE OF SAMOA ............................................................................................................................ 113 KINGDOM OF TONGA........................................................................................................................................... 113 TUVALU ............................................................................................................................................................ 113 REPUBLIC OF VANUATU........................................................................................................................................ 114 PACIFIC ISLANDS (REGIONAL) ................................................................................................................................ 114 TABLES TABLE 1. LIKELIHOOD OF NATURAL DISASTERS ................................................................................................................... 4 TABLE 2. HUMAN CAPITAL INDEX DATA FOR FOUR PIC9 COUNTRIES ...................................................................................... 6 TABLE 3. PROGRESS TOWARD ORIGINAL RPF OBJECTIVES .................................................................................................... 7 TABLE 4. PIC9 PORTFOLIO TRENDS (FY17–19) .............................................................................................................. 13 TABLE 5. AUSTRALIA—TOTAL OFFICIAL DEVELOPMENT ASSISTANCE TO THE PIC9 (AU$ MILLION) ............................................. 22 TABLE 6. NEW ZEALAND—TOTAL OFFICIAL DEVELOPMENT ASSISTANCE TO THE PIC9 (NZ$ MILLION) ........................................ 22 TABLE 7. PREVIOUS AND CURRENT RISK RATINGS DERIVED FROM THE SYSTEMATIC OPERATIONS RISK RATING TOOL ...................... 30 FIGURE FIGURE 1. THE CENTRAL SUPPORT UNIT (CSU) MODEL IN THE PACIFIC ................................................................................ 19 BOX BOX 1. KEY FINDINGS AND LESSONS OF RECENT COUNTRY PORTFOLIO REVIEWS ...................................................................... 24 vii THE PIC9: THE REPUBLIC OF KIRIBATI, THE REPUBLIC OF THE MARSHALL ISLANDS, THE FEDERATED STATES OF MICRONESIA, THE REPUBLIC OF NAURU, THE REPUBLIC OF PALAU, THE INDEPENDENT STATE OF SAMOA, THE KINGDOM OF TONGA, TUVALU, AND THE REPUBLIC OF VANUATU PERFORMANCE AND LEARNING REVIEW OF THE REGIONAL PARTNERSHIP FRAMEWORK I. INTRODUCTION 1. This Performance and Learning Review (PLR) of the World Bank Group (WBG) Regional Partnership Framework (RPF) for nine Pacific Island Countries (PIC9) for Fiscal Year (FY) 17-21 (Report No. 100997-EAP) identifies key regional and country developments since the adoption of the RPF, assesses progress toward the achievement of RPF objectives, draws lessons from program and portfolio implementation, proposes adjustments to WBG engagement in the region for the remainder of the RPF period, and extends the RPF period by 2 years to FY23. 2. The nine countries included in the present RPF are the Republic of Kiribati, the Republic of the Marshall Islands (RMI), the Federated States of Micronesia (FSM), the Republic of Nauru,12 the Republic of Palau, the Independent State of Samoa, the Kingdom of Tonga, Tuvalu, and the Republic of Vanuatu. The RPF is structured around four Focus Areas: (i) fully exploiting the available economic opportunities; (ii) enhancing access to employment opportunities; (iii) protecting incomes and livelihoods; and (iv) strengthening the enablers of growth opportunities (such as macroeconomic management, infrastructure, and knowledge). 3. This PLR confirms that the FY17–21 RPF continues to be relevant and well aligned with PIC9 development priorities. Achievement of the RPF objectives is broadly on track following strong, timely delivery of scaled-up development support through the eighteenth replenishment of the International Development Association (IDA18), as well as implementation of the International Finance Corporation (IFC) 3.0 approach in the Pacific, combined with delivery of a robust portfolio of Advisory Services and Analytics (ASAs) and IFC advisory work. Out of eleven RPF objectives, five have been achieved and three are on track. Three objectives are on track but delayed: (i) addressing the education and skills gap; (ii) strengthened resilience to natural disasters and climate change; and (iii) increased access to basic services and improved connective infrastructure. 4. Delays in achieving objectives are largely related to the challenges of implementing infrastructure projects. Such projects routinely encounter procurement issues deriving from thin client capacity as well as the remoteness of PIC9 countries, which complicates timely delivery of goods and services by contractors. Implementation also continues to be influenced by issues related to safeguards (especially surrounding land use) and the impacts of natural disasters (especially if resources are diverted from development to reconstruction). The wide variation in progress among the nine countries in implementing infrastructure projects has complicated the aggregate assessment of progress toward RPF objectives, but at the same time, the overall assessment has yielded an array of substantive lessons to inform the design and implementation of projects and programs in support of RPF objectives. 1 Note that Nauru is not a member of IFC and that Tuvalu joined in 2019. 2 Note that Kiribati, RMI, Nauru, Tonga, and Tuvalu are not members of MIGA. 5. Considering these circumstances, and recognizing that 14 of 50 projects in the active portfolio were approved only in FY19 and that 15 more projects are in the pipeline for FY20, this PLR extends the RPF period by two years to FY23. The two additional years will facilitate three substantial accomplishments. First, the extension will give projects more time to make progress in implementation, especially projects only recently approved by the World Bank Board. Second, the extension will enable the WBG to continue providing intensified implementation support and focused capacity building to clients. Third, it will ensure that the Bank draws key lessons from implementation of the significantly expanded IDA18 portfolio to set the stage for future engagement. An additional consideration is that five of the PIC9 countries are expected to hold elections between now and FY21, and an extended RPF will allow time to engage with new governments following the elections. 6. This PLR proposes no changes to the Focus Areas of the RPF, but it does propose revisions to four objectives, primarily to refine and narrow their scope. Adjustments are also proposed at the indicator level, including the revision of 22 indicators, the addition of 10 indicators, and the removal of 6 indicators. 3 The substance of the revised indicators does not change; the revisions consist only of adjustments in wording, the addition/removal of relevant countries, or changes in targets/timing. The 10 new indicators are proposed mostly to capture results of recently approved projects. The 6 dropped indicators were either not tracked by the relevant projects or were replaced by new indicators, reflecting how pipeline projects have materialized. To streamline the results framework, all supplementary progress indicators were dropped. II. MAIN CHANGES IN COUNTRY CONTEXT Changes in Poverty Reduction and Shared Prosperity 7. At the start of the RPF period, data on the incidence of poverty were available for six of the PIC9, showing negligible extreme poverty (2011 PPP US$1.90 per day) in Samoa (0.8%), Tonga (1.1%), and Tuvalu (3.3%) and a higher incidence in Kiribati (14.1%), Vanuatu (14.7%), and FSM (17.4%). No Household Income Expenditure Survey (HIES) data were available for Palau, Nauru, and RMI, but other data sources suggested that poverty levels in Palau would resemble those in Samoa and Tonga, and the level in RMI would be similar to FSM. Since the publication of the RPF, new HIES data have become available for Samoa (2012–13 and 2018–19), Tonga (2015–16), and Tuvalu (2015–16). The data show little movement in extreme poverty and other internationally comparable poverty measures. Tonga’s 2015–16 poverty rate was 1%, a 0.1 percentage point drop from 2009–10, while poverty in Samoa ticked up slightly from 0.8% in 2008–09 to 1.1% in 2012–13. Inequality as measured by the Gini Index also showed little movement. Any further analysis is complicated by infrequent data collection, but updates are expected as several PIC9 countries are conducting a HIES (RMI, Kiribati, and Vanuatu) or plan to do so within the next two years (Nauru, Palau, FSM, Tuvalu, and Tonga). Key Macroeconomic and Debt Developments 8. The economies of the small PICs continue to be driven primarily by fishing, agriculture, and tourism, as well as the construction of public infrastructure, including infrastructure installed in response to natural disasters such as Tropical Cyclone (TC) Pam, which hit Vanuatu and Tuvalu in 2015, and TC Gita, which hit Tonga and Samoa in early 2018. Revenue from fishing licenses has driven budget surpluses in Kiribati, Tuvalu, and the North Pacific countries, while prudent fiscal policy has helped Samoa and Tonga to move toward more balanced budgets. Countries that have benefited from increased revenues in recent years have experienced pressure to increase spending, and several countries are grappling with the question of how to balance spending now (including spending on critical development needs) versus saving for the future. Many recent drivers of higher revenues may 3 Excluding supplementary progress indicators. 2 not persist. For instance, revenues from fishing license fees can vary greatly from year to year; they are subject to structural shifts arising from cyclic El Niño patterns and climate change. Vanuatu has seen a sharp increase in revenue from economic citizenship 4 schemes in recent years, but because external demand (and domestic political appetite) for these schemes is inherently volatile, they should not be regarded as a stable source of revenue over the longer term. Overall, ongoing budgetary prudence will be necessary in the small PICs to secure long-term fiscal sustainability. 9. Debt sustainability is a related challenge. The seven small PICs that receive IDA financing (in other words, excluding Nauru and Palau), are subject to IDA’s Non-Concessional Borrowing Policy. Of these seven, six are rated as having a high risk of debt distress. Only Vanuatu is classified as having a moderate risk of debt distress, although its external public debt has risen sharply since 2014, partly because the government needed to finance reconstruction after TC Pam. Samoa and Tonga have been reclassified from a moderate to a high risk of debt distress since the RPF was adopted, although these reclassifications primarily resulted from changes in methodology to account more accurately for the average annualized cost of natural disasters in long-term growth and fiscal balance projections. While public debt tends to be lower in PICs than in other emerging regions of the world, the small PICs have structural characteristics that limit their capacity to carry debt, including their modest long-term economic growth prospects and marked vulnerability to natural disasters. Several PICs have developed debt management strategies that provide rules related to contracting new debt. Even so, scope remains to strengthen public investment management frameworks to ensure that spending on capital works in particular is efficient and effective. Key Political and Social Developments 10. The PIC9 exhibit a diverse array of political profiles, population size, development status, and potential for instability. Governments have broadly been stable in recent years, with intermittent but unsuccessful leadership challenges during the period under review. 11. Five general elections have been held in the PIC9 since the RPF was approved: Tonga (November 16, 2017), FSM (March 19, 2019), Nauru (August 24, 2019), Tuvalu (September 9, 2019), and RMI (November 18, 2019). The election in Tonga did not occasion a major shift in the country’s direction or development agenda, and it had no substantive impact on the strategic alignment of country priorities with the RPF. Similarly, no major shift from the RPF is expected in FSM, although the new government is yet to confirm any new development priorities. The latest election in Nauru is not expected to impact the RPF, given that the Bank’s ability to provide International Bank for Reconstruction and Development (IBRD) resources to the country is still constrained. It remains to be seen whether recent changes in the Tuvalu government will require an adjustment in the Bank program. 12. The rest of the PIC9 are set to hold elections over the next two years: Kiribati (early 2020), Vanuatu (April 2020), Palau (November 2020), and Samoa (no later than March 2021). Natural Disasters and Emergencies over the RPF Period 13. The defining features of the PIC9 are their extreme remoteness, small size, geographic dispersion, environmental fragility, and high degree of exposure to a volatile mix of economic shocks, climate change, and natural disasters. Although the likelihood of being struck by a severe 5 natural disaster in a given year varies by country (Table 1), the Pacific has generally seen an increase in natural 4 These programs offer Vanuatu citizenship to foreigners in exchange for a one-time financial contribution. 5 “Severe” as it refers to a statistically significant impact on GDP growth. 3 disasters since 2000. 6 Because frequent natural disasters with economy-wide impacts limit private sector investment, the public sector will continue to play a major role in development investment throughout the PIC9. 14. TC Gita, a Category 5 cyclone, hit Tonga in February Table 1. Likelihood of natural disasters 2018. It directly affected an estimated 80% of the Country Likelihooda (%) population, with damages totaling 38% of gross domestic Kiribati 10.8 RMI 16.2 product (GDP) (US$164.2 million). Agriculture incurred FSM 24.3 significant losses (US$41 million), as did housing (US$50.1 Palau 2.7 million), with over 800 homes destroyed and a further Samoa 27.0 4,000 damaged. Public buildings including health facilities Tonga 29.7 and schools were affected as well. The post-disaster rapid Tuvalu 16.2 needs assessment undertaken by the government of Tonga Vanuatu 56.8 Source: Lee, Zhang, and Nguyen 2018. with support from the World Bank and other development a “Likelihood” refers to the probability that at least partners estimated that 75% of schools on the main island one natural disaster will occur in a given year. were damaged, leaving thousands of students without classrooms, and that water, sanitation, and health facilities needed to be rebuilt or repaired. 7 TC Gita also reached Samoa, where its impact was not as severe; there was an estimated US$3.7 million in damages to the power grid and a 0.1% slowdown in GDP growth. 15. Among the PIC9, Vanuatu has experienced the most natural disasters during the RPF period so far. Volcanic eruptions on Ambae Island in September 2017, and again in March 2018, prompted the evacuation of 11,000 residents as ashfall contaminated water supplies, destroyed crops, and cut off road access. The displacement of the Ambae population put heavy pressure on the resources of the adjacent island, Maewo. Volcanic activity in southeastern Ambrym also forced 70 families to move in December 2018. Vanuatu was in the path of TC Donna in May 2017, which affected 1,000 people and 180 households, and of TC Oma in February 2019 which resulted in people being evacuated in Torba, Samna, and Malmapa as flash floods and rain damaged both homes and crops. 8 16. Other natural disasters affecting the PIC9 during the RPF period include heavy rains and prolonged floods in the island capital and southern islands of Kiribati in January 2019, where homes and drinking water sources were damaged, and Typhoon Wutip in FSM, which struck the islands of Chuuk and Yap in February 2019 and resulted in US$2 million in damages to infrastructure and the loss of 106 homes. These events illustrate the regularity with which environmental and climate shocks throughout the PIC9 present substantial risks to long-term fiscal health, growth, and productivity, particularly where capacity for disaster relief and recovery is low. Resources often need to be diverted from development to reconstruction. 17. An ongoing measles epidemic has also claimed 70 lives in Samoa from October 2019, mostly children below the age of 4. Close to 5,000 cases have been identified by December 2019. A State of Emergency was declared on November 15, 2019 for 30 days. 6Lee, D., H. Zhang, and C. Nguyen. 2018. “The Economic Impact of Natural Disasters in Pacific Island Countries: Adaptation and Preparedness.” IMF Working Paper. Washington, DC: International Monetary Fund (IMF). Available at: https://www.imf.org/ en/Publications/WP/Issues/2018/05/10/The-Economic-Impact-of-Natural-Disasters-in-Pacific-Island-Countries-Adaptation-and-45826 7Government of Tonga. 2018. “Post-Disaster Rapid Assessment.” Available at: https://www.gfdrr.org/sites/default/files/publication/ tonga-pdna-tc-gita-2018.pdf 8 Government of the Republic of Vanuatu. 2019. “Tropical Cyclone Oma: NEOC Situation Update 2.” Available at: https://reliefweb.int/ sites/reliefweb.int/files/resources/02-ndmo-vanuatu-tc-oma-situation-update-18-Feb-2019.pdf 4 New or Emerging Country/Development Issues 18. Although total Official Development Assistance (ODA) and fisheries revenue across the PIC9 have increased since FY17, sustainable economic growth remains elusive. The PIC9 continue to be highly exposed to a range of external shocks and face limited prospects for fostering economies of scale. The internal dispersion of populations across scattered islands makes it difficult to reduce the costs of basic public services. As a number of vital foreign revenue streams come to an end (such as the Compact Sector Grants, scheduled to be phased out in FY23 in the North Pacific) 9 and the Australian Regional Processing Center in Nauru is scaled down, the PIC9 are facing considerable medium-term challenges for maintaining government revenue, fiscal buffers, and long-term sustainability. 19. FSM is the first PIC to undertake a Climate Change Policy Assessment (CCPA) as part of the International Monetary Fund (IMF) Article IV mission. The CCPA is a joint initiative by the IMF and the World Bank to assist small states to understand and manage the expected economic impact of climate change, while safeguarding long-run fiscal and external sustainability. The CCPA for FSM explores the possible impact of climate change and natural disasters, takes stock of the country’s climate response plans, and assesses the macroeconomic and fiscal implications of FSM’s planned response. It suggests reforms to strengthen the national climate response strategy and identifies policy gaps and resource needs. A CCPA is also planned for Tonga in early 2020. Meanwhile, RMI is the first (and currently only) country to have submitted its second Nationally Determined Contributions (NDC) to the 2015 Paris Agreement, which includes increased commitments on greenhouse gas (GHG) emissions reduction targets. RMI is also preparing a National Adaptation Plan and adopting a gender-responsive and human rights-based approach in NDC-related planning, programming, and implementation. The Bank is providing support in selected areas of NDC implementation through the Pacific Resilience Program (PREP, P155257 and P160096) and the RMI Sustainable Energy Development Project (P160910). The RPF will continue to provide a framework for the Bank to engage in building countries’ resilience against environmental and climate shocks, and to facilitate and promote increased ambition and action on climate change. 20. Most Pacific countries have also completed the first layer of digital connectivity (in other words, the “first mile”), such as laying of undersea cables. Through the Pacific Regional Connectivity Program, people in Kiribati, FSM, Samoa, Tonga, and Tuvalu are being connected to internet that is cheaper, faster, and more reliable. The next phase of engagement by the Bank will leverage this improved connectivity and focus on reducing remaining access gaps and identifying opportunities for digital economy and digital government (service delivery) development. For example, the Samoa Connectivity Project (P128904) has been restructured to include a new component on digital identification and digital government platform design. The Tonga Digital Government Support Project (P154943) was recently approved. The Digital RMI (P171517) and Digital FSM (P170718) projects are under preparation and will focus on terrestrial infrastructure investments to improve connectivity and mobilize investments in digital services so that people can access and unlock critical public and private sector services. 21. Challenges in human development persist. A child born in the PIC9 today will be, on average, 50.4% as productive when s/he grows up as she could be if she enjoyed complete education and full health, according to the Human Capital Index (HCI). The HCI, which is a component of the World Bank’s Human Capital Project, measures the amount of human capital that a child born today can expect to attain by age 18—specifically, by comparing the productivity of the next generation of workers to a 9 The USA intends to begin negotiations on certain provisions of the Compacts with RMI and FSM, and to begin Compact Review discussions with Palau. In preparation for FY23, the Bank provided analysis of the effectiveness and efficiency of public spending and recommendations to support improved budget formulation and execution as part of a Public Expenditure Review (PER) for FSM in FY17 and is currently preparing a PER for RMI. 5 benchmark of complete education and full health. The index has been developed for 157 countries, including 4 of the PIC9 to date (Table 2). Globally, these four are ranked in the second-lowest quartile, and all score below the average for the East Asia and Pacific (EAP) Region (0.61). Among lower-middle- income countries, Kiribati and Vanuatu rank slightly lower than the average for their income group (0.48). Tonga and Tuvalu also score lower than the average for their income group (the upper-middle- income group) (0.58). Demand for projects in human development is increasing among the PIC9. The Skills and Employment for Tongans Project (P161541) and RMI Multisectoral Early Childhood Development Project (P166800) were approved in FY19, and the Tuvalu Early Learning Project (P171681) has been a late addition to the IDA18 pipeline. Guided by the four Focus Areas of the RPF, the Bank is consulting with the PIC9 countries regarding the IDA19 pipeline, and a further emphasis on human development is expected. 22. For example, a programmatic ASA, Expanding Labor Mobility and Social Protection in the Pacific Islands (P171638), is underway and expected to inform policymaking and development assistance relating to short-term migration and social protection in selected PICs. In a context where domestic employment is not growing rapidly enough to absorb new entrants into the labor market, an important focus of this ASA will be to discern how labor mobility can provide Pacific Islanders with a means to gain employment and income where such opportunities are not available domestically. The ASA will also examine adaptive social protection, in which social protection systems are integrated with disaster risk management and adaptation to climate change. This work will include the development of tools and mechanisms to link social assistance programs and systems with disaster response, such as supporting the establishment of beneficiary registries to make them more disaster- responsive, preparation of hazard and vulnerability maps to identify and support the poorest populations for policy decision-making, and promotion of literacy for climate change and resilience. These activities will help strengthen the Bank’s engagement and dialogue with client countries to facilitate the inclusion of labor mobility and social protection into future development policy operations (DPOs). Table 2. Human Capital Index data for four PIC9 countries Learning- Probability Expected Adult Healthy Harmonized adjusted Country HCIa/rankb of survival years of survival growth (not test scorese years of to age 5c school d rateg stunted)h schoolf Kiribati 0.479/105 95 11.6 383 7.1 81 NA Tonga 0.512/95 98 10.9 376 6.5 87 92 Tuvalu 0.554/83 98 11.9 387 7.4 NA 90 Vanuatu 0.471/108 97 10.6 356 6.1 87 72 Source: World Bank Human Capital Project, https://www.worldbank.org/en/publication/human-capital. Note: NA indicates that data are not available. a The HCI calculates the contributions of health and education to worker productivity; the final index score ranges from 0 to 1. b Rank is out of 157 countries. c Calculated by subtracting the under-5 mortality rate from 1 (under-5 mortality rates are retrieved from the UN Interagency Group for Child Mortality Estimates, supplemented with data provided by World Bank staff). d Calculated as the sum of age-specific enrollment rates between ages 4 and 17. e Scores retrieved from the Global Database on Education Quality, which harmonizes scores across major international student achievement testing programs, and where 300 is minimal attainment and 625 is advanced attainment. f Calculated by multiplying the estimates of expected years of school by the ratio of most recent harmonized test scores to 625, where 625 corresponds to advanced attainment. g Calculated by subtracting the mortality rate for 15–60 year-olds from 1. h Calculated by subtracting stunting rates from 1 (stunting rates retrieved from the UNICEF-WHO-World Bank Joint Malnutrition Estimates, supplemented with data provided by World Bank staff). 6 III. SUMMARY OF PROGRAM IMPLEMENTATION Overview of Progress Toward Achieving RPF Objectives 23. As summarized in Table 3, achievement of the RPF objectives under all four Focus Areas is broadly on track, considering the strong, timely delivery of the IDA18 scale-up and the implementation of the IFC 3.0 approach in the Pacific, combined with delivery of a robust portfolio of World Bank ASAs and IFC advisory work. Table 3. Progress toward original RPF objectives Number of RPF Objective Indicatorsa Overall On track, Objective No status Total Achieved On track with progress delays Focus Area 1. Fully exploiting available economic opportunities On track 5 3 2 0 0 Improved management of oceanic and coastal fisheries On track 2 1 1 Increased incomes from agriculture Achieved 2 2 Expanded tourism opportunities On track 1 1 On track, Focus Area 2. Enhancing access to employment opportunities with 7 5 0 1 1 delays Broadened opportunities for access to labor markets Achieved 1 1 Addressing education and skills gap Delayed 4 2 1 1 Addressing gender inequality and gender-based violence Achieved 2 2 On track, Focus Area 3. Protecting incomes and livelihoods with 5 3 0 2 0 delays Strengthened resilience to natural disasters and climate change Delayed 3 1 2 Strengthening health systems and addressing NCDsb Achieved 2 2 On track, Focus Area 4. Strengthening the enablers of growth opportunities with 17 6 3 6 2 delays Frameworks to improve fiscal management developed and maintained Achieved 3 3 Increased access to basic services and improved connective infrastructure Delayed 12 3 1 6 2 Address knowledge gaps On track 2 2 a Excluding supplementary progress indicators. b Non-communicable diseases. Focus Area 1: Fully exploiting available economic opportunities—On track 24. The combined challenge of small size, remoteness from major markets, and internal dispersion increases the costs of private production and public administration, lowers the return to market activities, and narrows the feasible set of economic opportunities for the PIC9. Given low growth and limited employment opportunities, the PIC9 need to fully exploit the set of economic opportunities available to them. This Focus Area specifically emphasizes the objectives of supporting the improved management of oceanic and coastal fisheries, increasing incomes from agriculture, and expanding tourism opportunities, which are essential activities to PIC9 economies. The achievement of these objectives is on track. For example, 100% of the oceanic purse seine tuna catch within the waters of participating countries (RMI, FSM, and Tuvalu) continues to be managed under the Vessel Day Scheme (VDS) 10 with enhanced support from the World Bank Pacific Islands Regional Oceanscape Program (PROP). A similar project was approved in FY19 for Tonga (Tonga Pathway to Sustainable Oceans, P164941) and in early FY20 for Samoa (Samoa Agriculture and Fisheries Productivity and 10The Parties to the Nauru Agreement (PNA) Vessel Day Scheme (VDS) sets an overall Total Allowable Effort (TAE) limit on the number of days fishing vessels can be licensed to fish in PNA Exclusive Economic Zones (EEZs) per year. Each country is allocated a share of the TAE for use in its zone each year. These VDS days can be traded between countries in cases where a country has used up all its days while another has spare days.” See https://www.pnatuna.com/vds. 7 Marketing Project, P165873). Kiribati is also anticipated to join the PROP countries later in FY20. Under the Samoa Agriculture Competitiveness Enhancement Project (P115351), the value of fruit and vegetable sales by growers increased by 68%, and the value of sales by livestock producers increased by 46%, both exceeding RPF targets. Under an IFC project to expand tourism opportunities in Vanuatu, the government and private sector have adopted several recommendations to increase growth of the Chinese tourism market. At the halfway point of the project, targets have been reached or exceeded, with further steady growth projected. Focus Area 2: Enhancing access to employment opportunities—On track 25. Because access to employment is central to improving the well-being of PIC9 populations, this Focus Area emphasizes objectives related to broadening opportunities for access to labor markets, closing educational attainment and skills gaps among the poor, and addressing gender inequality and gender-based violence (GBV). Achievement of these objectives is on track, notwithstanding implementation delays arising from school reconstruction under the Vanuatu Infrastructure Reconstruction and Improvement Project (P156505). Data collected from the Pacific Labor Mobility Programmatic ASA (P155609) have been used to inform reforms to the Australian Seasonal Workers Programme (SWP) and present a strong business case for hiring Pacific workers to Australian employers currently using other sources of labor. Limits on the number of Pacific workers eligible to participate in the SWP have since been lifted, which is expected to improve uptake of the SWP by Australian industry. The Australian government has also established a new multi-year scheme for semi-skilled workers from the Pacific, consistent with arguments made in support of such schemes in the Pacific Possible report on labor mobility. 11 The Pacific Labor Mobility Programmatic ASA (P155609) was also a valued resource for IFC in partnering with the Tonga Development Bank on the Ave Pa’anga Pau remittance voucher, which reduced the cost and improved the efficiency of sending remittances between New Zealand and Tonga. 12 Meanwhile, the Pacific Early Age Readiness and Learning ASA (PEARL, P145154) successfully piloted a community intervention in Tonga to improve school readiness; an impact evaluation showed improvements in children’s numeracy, literacy, and reading scores. Tuvalu subsequently designed and implemented a similar model in its preschools with support from PEARL. A reading intervention piloted in Tonga provided Grade 1 and 2 teachers with training, coaching, and materials to teach children to read using scripted lessons. The program led to better reading outcomes for children: compared to children in control schools, children in treatment schools displayed an improvement of 11.3% in reading comprehension by the end of Grade 2. Similar pilots were carried out in Kiribati and Tuvalu. As a result of this work, Tuvalu allocated a portion of its IDA18 allocation to finance an early learning project scheduled for delivery in FY20 (Tuvalu Early Learning Project, P171681). Another ASA focuses on preventing, mitigating, and addressing GBV and violence against children in transport projects in the Pacific (GBV and Violence Against Children—Awareness and Mitigation, P166879). A gender analysis informed 90% of the IDA projects in the active portfolio, and 69% have a gender indicator. Focus Area 3: Protecting incomes and livelihoods—On track 26. Protecting the incomes and livelihoods of the poor is particularly important in the context of climate change, frequent natural disasters, and economic shocks. The objectives emphasized in this Focus Area, which have mostly been achieved, are to strengthen resilience to natural disasters and climate change, as well as to strengthen health systems and address non-communicable diseases (NCDs). To strengthen resilience, participating PICs (RMI, Samoa, Tonga, and Vanuatu) received 11Curtain, Richard, Matthew Dornan, Jesse Doyle, and Stephen Howes. 2016. “Pacific Possible: Labour mobility: The ten billion dollar prize.” Pacific Possible, Australian National University, and World Bank, Washington, DC. Available at: http://pubdocs.worldbank.org/ en/555421468204932199/pdf/labour-mobility-pacific-possible.pdf. 12 IFC is working on extending the remittance program to Australia in partnership with other Pacific Island banks. 8 payment 13 within a month of the occurrence of an insured event through the Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI). Multi-hazard early warning systems have been established and are operational in Samoa, increasing the coverage of hazard forecast and warning messages from 50% to 84% of the population at risk. Progress in Tonga has been delayed, however, partly due to delays in procurement of key consultants, shortcomings in contract monitoring and work planning, as well as the impact of TC Gita, which led to an emergency scaling up of the project to rebuild and retrofit schools. Conditional cash transfer programs are also being developed in RMI (P166800) and Tonga (P161541). Both programs are developing poverty-based targeting systems so that vulnerable and poor people can be easily identified, not only for social assistance programs but also for other programs, including disaster response. In addition, an evaluation is underway to assess the cash transfer top-ups received by social assistance beneficiaries in Tonga after TC Gita. Lastly, data are being collected to develop poverty and hazard maps and conduct a vulnerability mapping analysis that will assist with disaster preparedness. Meanwhile, to strengthen health systems, Kiribati and Vanuatu completed annual analyses of public expenditures on health and used the results to inform the health policy dialogue. To improve health and nutrition outcomes and reduce the incidence of NCDs, DPOs in Samoa supported the introduction of excise taxes on sugary and salty products. A DPO in Tonga supported implementation of key fiscal measures to reduce consumption of alcohol, cigarettes, and fatty, salty, and sugary foods and beverages, and increase consumption of healthy alternatives. Focus Area 4: Strengthening the enablers of growth opportunities—On track 27. The objectives of this Focus Area emphasize developing and maintaining frameworks to improve fiscal (macroeconomic) management, increasing access to basic services and improving connective infrastructure, and addressing knowledge gaps. The achievement of these objectives is largely on track. In Kiribati, a DPO series and technical assistance from the World Bank Treasury enabled the government to make significant gains in managing its sovereign wealth fund, the Revenue Equalization Reserve Fund (RERF). The RERF is now managed in accordance with international benchmarks, with substantially reduced costs (0.08% of fund value in 2018, compared with 2% in 2015). In 2018, the government of Kiribati also successfully completed the transfer of RERF assets to new custodians, following a competitive international selection process, and adopted a new set of investment objectives to maximize the benefits of the RERF for current and future generations. Meanwhile in Tuvalu, oversight of the banking sector increased significantly in FY19 with multiple on- site examinations of credit risk, operational risk, and overall governance and strategy. 28. More progress remains to be made in closing digital connectivity and transport infrastructure gaps in the PIC9 during the remainder of the RPF period. Achievement of this objective is broadly on track given delivery of the IDA18 pipeline so far, but implementation will require sustained and intensive support from the Bank to ensure timely and satisfactory progress to the end of the RPF period. For example, the rehabilitation/upgrading of airport terminals (Kiribati and Tuvalu) and runways (Tonga, Tuvalu, and Vanuatu) is on track but delayed, as is installation of navigation and safety aids for aviation (Kiribati, Samoa, Tonga, Tuvalu, and Vanuatu). Implementation delays mostly arise from delays in procurement, which occur partly because procurement capacity in client countries is thin and partly because the remoteness of these locations affects the ability of contractors to deliver goods on time. As a result, the achievement or successful revalidation of regulatory certification of safety and security in project airports has also been delayed. 29. Delays notwithstanding, the various Pacific Aviation Investment Program (PAIP) projects and the Pacific Aviation Safety Office (PASO) Reform Project (P145057) are ensuring better connectivity 13 As this is a regional insurance pool, the indicator is reported for all four participating countries as a group, although not every country experienced an insured event during the reporting period. 9 through international aviation, which is a regional public good essential for PICs. These efforts promote wider, more sustainable growth across the region through investments in infrastructure, improvements in aviation safety and security, the development of aviation legislation and a platform for regional coordination, and the enhancement of capabilities that lead to stronger, more resilient connectivity. More specifically, PAIP provides support to harmonize regional aviation policy and standards and to ensure regional compatibility of safety and security infrastructure and equipment, sometimes procured for several countries under a single package. While investment and support under PAIP occur mostly at the country level, the impacts extend beyond national boundaries, because they relate to activities or operations with a regional (even international) footprint, mainly targeting international airports. As a result, beyond creating local employment, the improved operations in airports and airlines resulting from PAIP investments have generated wider network effects, enhanced access to distant markets for local producers, and spurred a significant increase in tourism. 30. In parallel, Bank support to PASO has been instrumental in enabling this regional safety and security oversight organization to overcome its early financial problems and strengthen its capabilities. PASO has now established a pool of regional aviation inspectors and supported its country members to update legislation and improve regulatory oversight from a regional perspective. PASO’s services are more accessible and more widely used by its member states. Capacity across the region has improved through the analysis and prioritization of training needs and the provision of training in specific areas of aviation expertise. PASO serves as a platform for coordination and dialogue at the regional level, from technicians to decision-makers, and with regional stakeholders such as the Asian Development Bank (ADB), Australia, New Zealand, and other donors. Quarterly meetings of the Program Steering Committee (comprising at least one high-level representative of each participating country) provide another forum for participating countries to create synergies, exchange experiences across the region, and support each other technically. 31. To enhance digital connectivity, Samoa has installed 1,385 kilometers of fiber optic cable (against a target of 1,300 kilometers), which increased access to internet services from the baseline of 27 per 100 people to 60 per 100 people. The price of wholesale international capacity fell from the US$1,500 baseline to US$107. Tonga expanded access to internet services from the baseline of 1 per 100 people to 50 per 100 people, reducing the price of wholesale international capacity from the US$495 baseline to US$155. The recently completed Telecommunications and Information and Communication Technology (ICT) Project in Kiribati (P126324) has introduced competition and led to a reduction in prices for consumers, leading to good uptake of services. The recent expansion of mobile/mobile broadband services to four remote outer islands of Kiribati has enabled those populations to connect with the rest of the world. Social media, video streaming services, and messaging services such as Viber and Facebook Messenger to connect to the diaspora are very popular among users, especially young people, throughout Kiribati. Backhaul by satellite remains a bottleneck, but it will be eliminated through the East Micronesia Cable System 14 supported under the Kiribati Connectivity Project (P159632) and the FSM Connectivity Project (P130592). Progress on connectivity has been slower in these two countries, where disbursements have been low and implementation was delayed by protracted negotiations among the East Micronesia Cable partners (particularly in FSM and Nauru) and the organizational and management capacity constraints faced by the newly established cable operator. Because the Tuvalu Connectivity Project (P159395) was approved only in January 2019, it is too early to report on progress. 32. Finally, Kiribati moved ahead with renewable solar energy infrastructure by installing a photovoltaic (PV) system and connecting it to the grid, to which it will contribute an estimated 1,165,000 kilowatt hours (kWh) each year. To replace costly imported diesel with renewable energy, 14 With ADB co-financing for Nauru. 10 solar PVs with a total capacity of 729 kilowatts (kW) were installed across four sites on the South Tarawa energy grid; now 8.1% of the current energy generation mix comes from this renewable source, against an end target of 7%. The installation of renewable energy in Tuvalu was slowed by two sets of difficulties beyond the implementing agency's control: challenges in accessing suitable land for project sites and issues in finalizing the Solar PV Facility contract. IFC and IDA—via the Private Sector Window—are also collaborating on a proposed US$50 million risk-sharing facility with a regional bank for commercial financing of renewable energy and small infrastructure in eight PIC markets, including Timor-Leste. The risk-sharing facility includes up to US$5 million from the IDA18 Private Sector Window as well as support from the government of New Zealand. IDA18 Policy Commitments and Corporate Priorities 33. In addition to progressing well toward the RPF objectives, several of the PIC9 are also well on track to meet selected IDA18 policy commitments under the IDA18 Special Themes. 15 For example, under the Governance and Institutions Special Theme, the Bank aims to strengthen domestic resource mobilization. In Tonga, the tax to GDP ratio has increased by over five percentage points of GDP from FY14 to FY19, reflecting the government’s commitment to improving domestic revenue generation and fiscal resilience, including through DPO-supported reforms to: (i) review tax exemptions and investment incentives; (ii) increase excise rates on fuel and unhealthy foods; (iii) strengthen tax recovery and compliance; and (iv) introduce a set of transparent fiscal anchors with targets for revenue, debt, and the wage bill. Meanwhile, the Country Economic Memorandum and Public Expenditure Review (PER) currently under preparation in RMI will support the government in determining a prioritized list of reforms to strengthen long-term fiscal sustainability, including specific measures to increase tax collection (via both policy reform and enhanced compliance with existing policy) and to address regressive and distortionary aspects of the tax system. Similarly, the PER for FSM (completed in FY17) highlights the need to enhance domestic revenue mobilization and encourages the government to review the tax system and the composition of tax revenues, evaluate sin tax options, and enact tax administration reforms, including tax roll management. To this end, the ongoing Public Financial Management Project (P161969) in FSM is supporting the procurement of a new Financial Management Information System and a new Revenue Management System and working on strengthening capacity in the Customs and Tax Administration. The outcomes of the project include improved efficiency of tax administration and enhanced taxpayer compliance. 34. Citizen engagement and beneficiary feedback are also a priority for improving governance and institutions. In RMI, for example, citizen engagement and beneficiary feedback are being integrated into the delivery of public services. The RMI Strengthening Budget Execution and Financial Reporting Systems Project (P163131) includes an online mechanism for the public to provide feedback directly to the Ministry of Finance with the goal of improving the transparency of government budgeting and spending. The RMI Early Childhood Development and Nutrition Project (P166800), which is based on a model of inclusive, adaptive management of activities, strongly emphasizes outreach and awareness-raising. The project’s monitoring and evaluation methodology facilitates adjustments in education, health, and gender affairs programs based on feedback from beneficiaries and the broader public. 35. Digital transformation is viewed in the Pacific as a key enabler in building open, effective, and accountable governance institutions. When implemented well, digital technologies can transform the lives of citizens and the functions of government while enhancing social and civil inclusion for all, especially women. Digital improvements in government functions will also enhance the working 15 The Special Themes intend to deepen and catalyze focus and results in critical areas. These Special Themes will continue under IDA19, which will cover the remainder of the RPF period. 11 environment for civil servants. For example, the application of digital technologies to the delivery of government services can significantly improve effectiveness, efficiency, transparency, and accountability by: (i) making services available directly to users, saving time and effort; (ii) enabling government to monitor service delivery performance; (iii) facilitating citizen engagement; and (iv) facilitating access to data and information. In the PIC9, the Bank provides support to develop the foundation of digital government in Tonga and, on a smaller scale, in Samoa. The Bank is also undertaking a regional ASA to identify opportunities to develop the foundations of digital government from a shared services or regional perspective. 36. In alignment with the IDA18 Gender and Development Special Theme, the Digital FSM (P170718) project to be delivered in FY20 includes a gender assessment and analysis to identify gender gaps and/or concerns relevant to the context in which each project operates. The gender assessment comprises: (i) a desk-based literature review; (ii) a series of in-country stakeholder consultations and focus group discussions to identify potential gender gaps; and (iii) the formulation of specific project actions that respond to those gaps. The gender assessment process has been designed to further inform, support, and provide an evidence base for the work of the national gender office in FSM. The Digital FSM project includes funding for the gender office to play a key role in project implementation, monitoring, and evaluation, not only to support the gender mainstreaming that is being undertaken in the project setting but also to ensure the ongoing collection of data to track progress toward reducing gender gaps. The gender office could also act as a conduit for ongoing community consultation—for example, through activities related to digital literacy, entrepreneurship, and online safety—and in this way provide a valuable avenue for tracking community awareness in relation to project objectives. The Bank will provide ongoing capacity support to make certain that a framework is in place for the national gender office to carry out this work, including assistance in recruiting consultants and technical support. The Digital RMI (P171517) project, which is planned for IDA19 delivery will have similar activities and measures. 37. Finally, the Bank has committed to integrating beneficiary feedback in 100% of projects financed by IBRD/IDA through investment project financing (IPF). In this regard the Bank is lagging in the PIC9, where a beneficiary feedback indicator was included in only 85% of the 26 projects approved and assessed from FY17 to FY19. The Bank is surpassing corporate targets on climate change and gender in the PIC9, however. The average climate co-benefit of approved and assessed PIC9 projects from FY17 to FY19 is 45%, exceeding the corporate target of 35%. At the same time, 82% of IDA projects approved in the PIC9 in FY17 were gender-tagged. Gender tagging indicates that gender gaps identified for a given project have been directly linked to specific project actions designed to close those gaps, which are then tracked in the results framework. In FY18, 80% of IBRD/IDA projects approved in the PIC9 were gender-tagged, and this share was roughly maintained at 78% in FY19, consistently exceeding the corporate annual target of 55%. Portfolio Overview World Bank 38. Lending. The World Bank delivered 39 projects in the PIC9 16 with a total net commitment of US$525 million from July 1, 2017 to June 30, 2019, including 3 regional projects. The overall commitment comprises US$339.9 million in national IDA 17 and additional financing leveraged from the regional IDA window (US$127.7 million), the Crisis Response Window (US$20 million), the global matching fund for Catastrophe Deferred Drawdown Options (Cat-DDOs) (US$4.35 million), and trust 16 Excluding Nauru and Palau, which are not eligible for IDA financing. 17 Includes US$48 million in FY17, US$66.9 million in FY18, and US$225 million in FY19. 12 funds (US$33.1 million). The current outlook for FY20 puts the PIC9 on track for full utilization of national IDA18 allocations. 39. Active portfolio. As of June 30, 2019, the PIC9 portfolio had 50 active projects 18 amounting to US$908.2 million, including 9 regional projects with a total net commitment of US$64.8 million. Disbursements increased from US$66.3 million in FY17 to US$126.6 million in FY18 and maintained a similar pace in FY19 at US$110.9 million (Table 4). The disbursement ratio at the end of FY18 leapt to 26.5% from 14.7% in FY17 and was broadly maintained in FY19, closing at 25.8%. On average, the PIC9 disbursement ratio over the RPF period has been higher than disbursement across the broader Pacific region (that is, across the PIC9, Fiji, Papua New Guinea, and Solomon Islands), and it has also surpassed the EAP target of 20%. Table 4. PIC9 portfolio trends (FY17–19) FY17 FY18 FY19 Portfolio and disbursements Number of active projects 44 45 50 Net commitments (US$ million) 665.70 714.56 908.16 Total disbursements (US$ million) 210.58 296.12 322.78 Disbursements in FY (US$ million) 66.34 126.59 110.88 Disbursement (%, IPF only)a 14.7 26.5 25.8 Portfolio riskiness Number of actual problem projects 7 7 6 Problem projects (%) 15.9 15.6 12.0 Number of potential problem projects 1 4 3 Number of projects at risk 8 11 9 Projects at risk (%) 18.2 24.4 18.0 Commitments at risk (US$ million) 141.48 108.07 211.14 Commitments at risk (%) 21.3 15.1 23.2 Proactivity (%) 75.0 85.7 85.7 Source: BI Portal as of July 2019. a IPF is investment project financing. 40. Problem projects and proactivity. Proactivity in the PIC9 has also consistently exceeded proactivity in the broader Pacific portfolio throughout the RPF period. From FY17 to FY19, proactivity has been 100% across the PIC9, excluding regional projects. When regional projects are included, proactivity drops to 85.7%, which is still well above the 80% EAP target. As of June 30, 2019, three of the six PIC9 problem projects were regional projects.19 A major conclusion of this review, discussed in Section IV, is that the Bank must continue to deepen its understanding of regional organizations— their nature, political economy, and modes of engagement with the Bank—to determine the most effective arrangements for close collaboration in the governance and implementation of regional projects. 41. Restructurings. From FY17 to FY19, 35 restructurings were undertaken for 26 projects, including 9 for regional projects. The majority (66%) entailed extensions ranging from five months to two years. More than half of those extensions were arranged when a month or less of project life remained, which suggests that restructuring could have been more proactive. The reasons for extensions varied, but extensions commonly sought to accommodate implementation delays due to thin client capacity (particularly if the implementing agency had limited experience with World Bank projects) and remoteness, which hampered the timely delivery of goods and services by contractors. A large proportion of restructurings entailed changes to the results framework (37%) and legal covenants (34%). Six projects had two or more restructurings within FY17–19, suggesting that the 18 The active portfolio includes IDA and large recipient-executed trust funds > US$5 million. 19The two P-codes for the Tonga Pacific Resilience Program (P154840 and P156334) refer to the same project, but Bank reporting systems count them separately. If this inconsistency were corrected, the PIC9 would have only five problem projects, three of them regional. 13 initial restructuring inadequately addressed the needs of the project. The discussion of country portfolio reviews in Section IV highlights lessons and recommendations related to these concerns. Both the country portfolio reviews and this learning review underscore the need for substantially strengthening project monitoring and evaluation. 42. ASAs. From FY17 to FY19, 23 ASAs were completed, including the Pacific Labor Mobility Programmatic ASA (P155609) and PEARL (P145154); as noted, PEARL led Tuvalu to request preparation of the Tuvalu Early Learning Project (P171681) for FY20 delivery. Other completed ASAs included the provision of technical assistance in debt management to selected countries, which consisted of debt management performance assessments and support to prepare medium-term debt strategies. For example, the Bank reviewed the structure and functions of Samoa’s Debt Management Unit, which currently sits within the Aid Coordination and Debt Management Division of the Ministry of Finance, and provided recommendations to improve its effectiveness. The Bank also reviewed implementation of Samoa’s Public Debt Management Reform Plan (January 2013), reviewed the Medium-Term Debt Management Strategy (MTDMS) 2016–20, and commented on a draft On-Lending Policy prepared by the Debt Management Unit. In Vanuatu, the Bank supported preparation of an updated MTDMS and provided advice to ensure consistency between the MTDMS and other reforms related to debt management, including ongoing reforms to public financial management legislation and regulations. In RMI, the Bank assisted the government to complete a money-laundering and terrorism-financing risk assessment. A program of health ASAs assisted the participating countries (Kiribati, Samoa, Tonga, and Vanuatu) and development partners to improve health service outcomes through more efficient, equitable, and quality expenditure. These ASAs have built a broader base of evidence to inform decision-makers in participating countries and the wider region on strategies for sustainably improving the management, financing, and delivery of healthcare. A second iteration of this ASA program is underway and is facilitating continuous dialogue with governments on public financial management and service delivery in the health sector. Ongoing work under a project for Improving Data Dissemination and Use in Pacific Islands Countries (P164889) is expected to inform the design of Pacific regional statistics projects in Kiribati, Tonga, and the Pacific Community (SPC), which are planned for FY20 delivery. 43. Broadly speaking, the ASA portfolio has strongly supported policy dialogue and/or downstream lending, or at a minimum it has informed project preparation and/or ongoing project implementation. An additional 22 ASAs are expected to be completed in FY20, including work on digital development, further building and mainstreaming disaster and climate resilience, and expanding labor mobility and social protection. International Finance Corporation and Multilateral Investment Guarantee Agency 44. The IFC has made no new investments in the PIC9 to date, although several investments are in the pipeline, including the infrastructure risk-sharing facility in six of the PIC9, retail in Samoa, and a hotel in Tonga. 20 IFC’s continued presence via an equity stake in the National Bank of Vanuatu (NBV) from 2013 to present helped NBV to stabilize after Cyclone Pam and achieve improved financial performance (FY18 and FY19). Despite investment challenges, IFC engagement has begun to produce strong development outcomes in the financial, trade, and tourism sectors. In the financial services sector, IFC partnered with the Tonga Development Bank to develop the Ave Pa’anga Pau remittance voucher, which can be sent between New Zealand and Tonga. As of June 2019, the cost of sending remittances using the voucher was 4.59%, compared to the average cost of 9.66% for the corridor, resulting in a savings of 5.07% for nearly 2,000 Tongan users. IFC is now working with the Tonga Development Bank to replicate this voucher in Australia. IFC’s support to the Bankers Association of 20 The IFC also assessed several prospective investments that ultimately did not meet its criteria, such as telecommunications in Kiribati, port infrastructure in RMI, and agriculture in Vanuatu. 14 Vanuatu (BAV) is progressing after BAV endorsed IFC’s Domestic Debit Card Interoperability and a number of banks—BRED (Vanuatu) Limited, Bank South Pacific, Australia and New Zealand Bank, and NBV—agreed on draft terms and conditions to help local banks link automated teller machines. This reform represents a first in the Pacific and a major improvement in banking services in Vanuatu. Technical support to Samoa and Vanuatu provided jointly by the WBG/IFC payments team under the Finance, Competitiveness, and Innovation Global Practice has introduced reforms in the area of payments and helped build the legal framework and financial infrastructure for national payment systems. Samoa enacted the National Payment System Act in 2014 and is working on the regulations and guidance for implementation. The draft National Payment System Bill in Vanuatu is expected to be approved in 2020. The implementation of the Automated Transfer System and the Central Securities Depository System was launched in Samoa in March and is expected to go live in May 2020, and Vanuatu’s systems are expected to go live by end of 2020. IFC also helps banks in Vanuatu to reach bilateral agreements to implement card interoperability and comprehensive credit reporting. 45. IFC’s tourism engagement in Vanuatu has supported meaningful change in the sector with technical support and strong implementation from the Vanuatu Tourism Office, surpassing targets on recommendations implemented. The change in international tourist (non-resident) arrivals is on track to reach the target of 10,000 by 2024 because of IFC support to develop the China and cruise markets. IFC, Australia, and Carnival Australia (an industry partner) provided Vanuatu with the first cruise impact data through the “Assessment of the Economic Impact of Cruise Tourism to Vanuatu.” 21 IFC and World Bank teams collaborate on project design and joint interface with governments to identify private investment opportunities in the sector and to ensure that regulatory and public infrastructure investments are informed by the tourism lens. 46. IFC’s work in trade facilitation reform has now reached seven of the PIC9 markets. Work in Samoa has so far focused on a trial of the ePhyto system. This electronic system for transmission and receipt of phytosanitary certificates reduces clearance times for exports and imports and improves the integrity of biosecurity management. In Vanuatu, trade facilitation reform focuses on preparing for the introduction of a single window for trade, which will allow all trade-related documents and clearances to be processed through a single portal, reducing the cost and time to trade. Diagnostics on current practice in trade facilitation have been undertaken in Kiribati, RMI, FSM, and Palau, with a further diagnostic planned for Tuvalu. The results will assist these countries in developing reform programs and will also inform work proposed by IFC to assist signatories to the PACER (Pacific Agreement on Closer Economic Relations) Plus free trade agreement to achieve the best value from the agreement. 47. In April 2019, IFC initiated a gender program to expand female labor force participation through targeted interventions across the PIC9 that increase the awareness among Pacific businesses of the business case for gender and equality and provide access to tools that help businesses to attract, retain, and promote female employees. This program will: (i) provide deep-dive gender advisory support to two firms; (ii) partner with the Pacific Islands Forum Fisheries Agency to improve women’s employment in fisheries; and (iii) establish a platform for companies across the Pacific to receive support for addressing GBV as a workplace issue. 48. Meanwhile, the Multilateral Investment Guarantee Agency (MIGA) is continuing to explore opportunities to support cross-border private sector investment through its political risk insurance product. MIGA is also working in close coordination with the Bank and IFC to look for opportunities to make use of the support of the IDA Private Sector Window when applicable. 21 Australian Department of Foreign Affairs and Trade, Carnival Australia, and International Finance Corporation (IFC). 2014. “Assessment of the Economic Impact of Cruise Ships to Vanuatu.” Available at: https://www.ifc.org/wps/wcm/connect/656e8666-c426-47f3-9804- ea233524125f/Assessment+of+the+Economic+Impact+of+Cruise+Ships+to+Vanuatu+REPORT.pdf?MOD=AJPERES&CVID=kFruDWL 15 Overview of Implementation Challenges 49. From FY17, the World Bank has undertaken five portfolio reviews in the PIC9 (one each in RMI, Samoa, and Vanuatu, and two in Tonga) to identify and address project implementation issues in the active portfolio. A comprehensive picture of common challenges across the portfolio emerges from these reviews and several other sources: Implementation Completion and Results Reports (ICRs) for projects that have closed during the current RPF period, Implementation Status and Results Reports (ISRs) and Restructuring Papers from the active portfolio, ongoing monitoring of the portfolio, and the continuing dialogue between the Pacific Country Management Unit (CMU) and clients. This section details the most significant implementation challenges arising over the review period; it is followed by a section describing the actions and strategies pursued in response. The discussion lays the groundwork for Section IV, which is a broader synthesis of lessons emerging from this performance review, focusing on what has worked well and what needs improvement. Operating environment 50. Fragility. The PIC9 are all vulnerable to the effects of climate change and natural disasters, but the World Bank classifies FSM, Kiribati, RMI, and Tuvalu as fragile states based on especially high levels of vulnerability. Since FY17, eight natural disasters have struck the PIC9, with four affecting Vanuatu alone. The most severe natural disaster over the RPF period so far has been TC Gita, which mainly affected Tonga and Samoa, as mentioned. 51. Severe natural disasters can significantly delay the implementation of projects. Implementing agencies, where capacity is already thin, experience considerable stress in redirecting resources to disaster response. Vanuatu’s Increasing Resilience to Climate Change and Natural Hazards Project (P112611) was restructured 22 to redirect some activities to support post-disaster recovery, while the Tonga Pacific Resilience Project (P154840/P156334) used a Contingency Emergency Response Component (CERC) and allocated additional resources to the recovery effort with support from the Crisis Response Window. Based on the learning from operations implemented in the PIC9, more PIC9 projects now include a CERC, and future projects are more likely to feature a CERC as well. 52. Economic geography. Structural barriers to development in the PIC9 include their remoteness from major markets, fragmented geographies, and small populations. High transport costs inevitably raise the unit costs for most productive activities and the provision of public services. Most civil works investments in the PIC9 are of comparatively small value, and because they are located in remote areas, access is logistically complex and time-consuming. For those reasons, opportunities in the Pacific are not always particularly attractive for international or regional contractors, while the technical requirements or size of the investments tend to surpass the capacity of national contractors. Development of the private sector is highly constrained by these geographic and market realities, as well as by the weak administrative environment. These same conditions hamper project implementation in general and procurement in particular. The number of suppliers in the market is limited, operating costs are extremely high, and appropriately skilled national and international consultants are few and costly to hire. 53. Because private sector investment opportunities in the PICs are limited by remoteness, small scale, and limited management capacity, IFC has focused it engagement in the PIC9 on ASAs. As discussed, this work has emphasized improvements in trade facilitation and financial infrastructure and has explored opportunities offered by regional platforms such as the risk-sharing facility for renewable energy. 22 Restructuring was done partly to reduce the scope of standalone activities related to agriculture and water supply and to integrate them, where possible, into the micro-projects aimed at enhancing the resilience and adaptive capacity of communities affected by TC Pam and other vulnerable communities. 16 Fiduciary management 54. Safeguards. Land is a critical resource in PICs, particularly in the South Pacific where many people rely on some level of farming for subsistence. Land scarcity is particularly acute in the atoll countries where rising sea levels are reducing the total land mass and urbanization is growing on the larger islands. Most PICs also have communal land tenure systems in which land is held within the community or family. Land rights often are intertwined with formal governance structures and social hierarchies. One consequence of communal land tenure is that property rights for certain parcels are not clearly defined; another is that customary decision-making processes can limit the transfer of ownership or access to land. Such issues have delayed the implementation of projects and added to their complexity. Eminent domain exists within the legal framework for land administration in PICs, but it is rarely used out of consideration for customary decision-making processes related to land tenure. Voluntary land donation or negotiated lease arrangements (including payment of compensation) are preferred over compulsory acquisition. 55. Beyond land issues, the implementation of environmental and social safeguards more generally is stymied by limited capacity within Project Management Units (PMUs) and among supervision engineers and contractors. The number of local environmental and social safeguards professionals available to work on projects in most PICs is very low, and deploying international safeguards specialists on an intermittent basis does not always have the desired effect due to the absence of regular oversight and follow-up. Capacity in the region is increasing, however. The Bank is developing a network of local practitioners to informally share experiences and good practices. In addition, through an approach developed jointly with development partners, international safeguards advisors have been recruited into Central Support Units (CSUs) in RMI, FSM, and Tonga. These advisors have been of great value to individual projects by providing support to implement safeguards and build PMU capacity. They have played an even more important and effective role at the portfolio level, however, by building strategic relationships with implementing agencies, regulators, local service suppliers, and other stakeholders. The CSU in Samoa will recruit a safeguards advisor later this year. The CSUs are described in detail in the next section (“Responding to Implementation Challenges”) and in Section IV, which also highlights the need for intensive support for clients to comply with safeguards under the Bank’s new Environmental and Social Framework. 56. Financial management (FM). Wherever possible, the World Bank seeks to use country FM systems, with due consideration of local FM capacity and institutions. The FM systems of most of the PIC9 are sufficiently robust to comply with World Bank project policies. Even so, many projects encounter thin capacity or a shortage of skilled staff, along with high staff turnover and limited training opportunities, all of which restrict effective fiduciary management on the ground. Other common FM issues include lapses in internal control procedures, especially in projects involving multiple implementing agencies with weak coordination and collaboration mechanisms. As a result, poor data input and inconsistent application of accounting principles reduce the quality or timeliness of audit reports and Interim Financial Reports. Over FY17–19, 66% of audits were submitted after the due date (four months late, on average). Section IV outlines pragmatic options for complying with fiduciary requirements where staff capacity and numbers are limited. 57. Procurement. Inadequate procurement capacity, poor work planning, and weak contract management by implementing agencies are key implementation challenges. When procuring services, terms of reference take longer to prepare than initially planned, so the timely preparation of terms of reference is now a focus of procurement support. The procurement of goods and civil works suffers from similar issues in the preparation of technical specifications and cost estimates. Once procurement is completed—that is, once contracts are signed—ineffective contract management tends to delay implementation and reduce the quality of outputs. In some larger civil works contracts, delays have caused defect liability periods to extend beyond project closing dates. Remoteness and 17 underdeveloped local construction and supply industries compound procurement problems, as mentioned. The World Bank has rolled out its Systematic Tracking of Exchanges in Procurement system in the region, which should make it easier for implementing agencies to monitor procurement progress, but poor connectivity is limiting the system’s adoption in some countries, such as Tuvalu and Kiribati. Section IV outlines efforts to develop guidance and more streamlined options for managing procurement where staff capacity and numbers are limited. Project management 58. Project management capacity. A scarcity of professional project managers in the Pacific makes it extremely difficult not only to fill core positions but to retain expertise in project teams. Many projects experience high staff turnover and a recurrent shortage of the skills needed for effective and efficient project implementation. Remote countries usually take longer than anticipated to hire skilled technical international consultants, and many such consultants do not complete their full contract term. The cost of international consultants is also a relatively high expense in project budgets. 59. Prior experience with multilateral development banks. An implementing agency that has not previously worked on a project with the World Bank or ADB usually faces a steep learning curve with its initial project, and implementation delays are common. Less experienced implementing agencies often require more intensive support during the first years of implementation to develop a practical command of World Bank FM, procurement, and safeguards requirements. 60. Monitoring and evaluation. As mentioned, 66% of the restructurings in the PIC9 portfolio in the period under review entailed extensions to the project closing date. Another common reason for restructuring was to revise the results framework. Several ICRs noted ambiguity in the indicators as well as concerns about the methodology for determining indicators. These issues stem partly from inadequacies in baseline data that lead to incorrect assumptions and targets. Across the portfolio, the collection of data for project monitoring remains a challenge. The use of unclear or complex data collection methodologies is compounded by staff turnover. Some PMUs noted that the infrastructure or skills are not available to develop a Management Information System to enable easier monitoring and evaluation of investments. Responding to Implementation Challenges in the PIC9 61. During the RPF period, as the Pacific CMU learned more about the structural challenges for project implementation in the PIC9 operating environment, it adopted measures to respond to those challenges. The CMU bolstered implementation capacity, made use of the new instruments that have become available during IDA18, and become highly engaged in leveraging the evolving partnerships in the Pacific region. 62. IFC strengthened support for implementation by appointing a Resident Representative to the WBG office in Suva, Fiji to oversee IFC operations in Fiji, Kiribati, Samoa, Tonga, and Tuvalu, as well as a senior resource in Sydney who is responsible for RMI, FSM, Palau, and Vanuatu. A country-based staff member is proposed for Vanuatu. In Samoa, IFC has engaged a consulting firm as its business advisor whose main responsibility is to source and facilitate business opportunities for IFC to consider. Bolstering implementation capacity 63. Strengthening country systems. As noted, the World Bank utilizes country FM systems wherever possible, with due consideration of local capacity. Because country systems are used extensively for financial management of World Bank–supported projects in the PIC9, client country staff learn to effectively apply their own financial management requirements to projects, which helps build sustainable in-country capacity. For example, the Supreme Audit Institution of the client country 18 is responsible for auditing all Bank–financed projects. In RMI and FSM, World Bank projects are included in government annual financial statements, which means that only one yearly audit report is issued, covering all projects, rather than issuing multiple project audit reports, which stretches client capacity. For most countries, aid is “on-budget” and scrutinized by Parliament, and the projects follow the government’s FM regulations. To varying degrees, the PIC9 also use government accounting and treasury systems for projects, although project reporting remains largely outside the country systems. Further, the Bank has supported Kiribati, Samoa, and Tuvalu in improving public procurement systems through DPOs. Activities have included updating legislation on public procurement as well as relevant implementing rules, regulations, and manuals, among others, to support the establishment and/or improvement of the national procurement system. Public procurement reform has also been embedded in the RMI Strengthening Budget Execution and Financial Reporting Systems Project (P163131), including: (i) updating and modernizing the Procurement Code and issuing its Implementing Rules and Regulations; (ii) creating and strengthening the Public Procurement Office; (iii) standardizing procurement documents, forms, and templates; (iv) developing a generic procurement manual that can be adapted for use by various procuring entities; and (v) training. 64. To strengthen safeguards capacity, the Bank entered into a Pacific Learning Partnership for Environmental and Social Standards (PLP-ESS) with the ADB, the Secretariat of the Pacific Regional Environment Program, and the University of the South Pacific in April 2019. Through this partnership, training will be delivered through several modalities across several locations to best address the capacity-building needs of the PIC9, including coaching (on-the-job training), twinning, mentoring, and online training. A new course at the University of the South Pacific, focusing on good international industry practice for environmental and social risk assessment and management, will be used for targeted formal training, along with the Learning Centre in Manila, Philippines. A training and technical support consultant for PLP-ESS will work closely with partners to undertake largely field based capacity building in environmental and social risk management in PICs. 65. Establishment of CSUs. As noted, to strengthen project readiness and support implementation, the Bank is supporting RMI, FSM, Samoa, and Tonga to establish CSUs that consolidate core functions such as FM, procurement, safeguards, communications, monitoring, and evaluation within national Departments or Ministries of Finance (Figure 1). Staffed with experienced and knowledgeable experts in these areas, CSUs aim to build the in-house capacity of implementing agencies (and thus mitigate risks stemming from limited client capacity). CSUs will also increase cost and time efficiencies for clients, as the same pool of experts located in national Departments or Ministries of Finance will support all active and pipeline projects in the World Bank portfolio and may eventually support other donor-financed projects. The structure of each CSU is tailored to the country context. Figure 1. The Central Support Unit (CSU) model in the Pacific Note: DOF/MOF is Departments or Ministries of Finance; IAs are implementing agencies; EA is the executing agency. 19 66. The CSU model is expected to have a number of other benefits aside from making full-time international expertise available within a country (versus a fly-in, fly-out modality for projects). For instance, the CSU will make it possible to share cross-cutting resources throughout the portfolio, decreasing fragmentation and using IDA resources more efficiently. The CSU should enable a deeper understanding of country systems and increase the Bank’s ability to align to those systems. It will also help to standardize approaches and procedures, and ensure consistency across the portfolio and equal treatment of World Bank–financed project staff. Training and capacity building in government institutions can be sustained over a longer period, and the loss of knowledge and data after a project closes will be reduced. Another advantage of the CSU model is that it allows for twinning of national staff in functions usually carried out by international consultants. 67. The establishment of CSUs is moving forward. The two CSUs in the North Pacific are almost fully staffed and in the early stages of implementation. The experience has been positive so far; knowledge of the country context and government systems is increasing, and some bottlenecks have already been removed. Support for project preparation by CSU staff is embedding knowledge of project preparation into government early in the process, and the knowledge and early engagement of the CSU have helped to facilitate more pragmatic project designs (in line with the lesson in Section IV on improving project readiness and design). The Tonga CSU has similarly started providing support services to PMUs. Recruitment for the Samoa CSU is underway. 68. Proactive and targeted capacity building. The Pacific Islands Capacity Building Program (PICBP), a structured client capacity-building program supported by the Bank, focuses on improving the speed and quality of project implementation in PICs. Under PICBP, a Pacific-wide learning needs assessment highlighted the need to build core competencies in the following areas: World Bank guidelines and processes, project management, procurement, FM, monitoring and evaluation, and safeguards (a need reinforced by the lessons emerging from this review). Expected proficiency levels have been differentiated between all project staff and specialists in each area of expertise. Initial course materials were piloted in training delivered to 205 government and PMU staff as part of the in-country portfolio reviews in Samoa, Tonga, and Vanuatu. The first official PICBP pilot was conducted in RMI in October 2019, followed by a second run in Tonga in November 2019. In addition to the PICBP, the Bank’s procurement, FM, and safeguards teams also continue to provide intensive and targeted fiduciary training to clients. Enhanced operational support from the Pacific CMU from an increased number of operations analysts and operations officers also provides opportunities for one-on-one coaching and mentoring of government and PMU staff across the portfolio. 69. Policy reforms in support of implementation in key areas. In the PIC9 countries, policy reforms supported through budget support engagements and advisory work have also helped strengthen implementation in priority sectors. For example, DPOs and ASAs in Samoa and Vanuatu with a strong focus on climate change and disaster risk resilience have helped inform and bolster implementation of a range of measures to build resilience. In Samoa, a technical analysis led by the World Bank in 2012 led to revisions in the National Building Code, while the budget support process helped to develop the associated implementation guidelines, which were approved by the Cabinet. In Vanuatu, a stand-alone DPO with a Cat-DDO (P168749) to be delivered in FY20 is expected to not only to strengthen the financial capacity of the government to respond and recover in a timely manner following a disaster, but also to support risk-informed land and settlement development, with minimum standards for disaster risk reduction, through the approval of the National Land Subdivision Policy by the Council of Ministers. In Tonga, a DPO series that concluded in FY19 supported health policy actions to address NCDs, including the implementation of key fiscal measures to incentivize reduced consumption of alcohol, cigarettes, and fatty, salty, and sugary foods and beverages, and increased consumption of healthy alternatives. 20 Using new instruments available during IDA18 70. Programmatic Preparation Advances (PPAs) and project-specific preparation advances. The Bank has made strategic use of the PPA since it was introduced in 2017, and the Pacific CMU was the first unit in the Bank to use the new instrument. PPAs support activities that help clients: (i) systematically identify priority operations (such as the formulation of sector-wide strategies); (ii) ensure the readiness of implementing agencies to undertake specific operations by enabling them to considerably advance project preparation, prior to Board approval; and (iii) strengthen agencies that affect the quality of project preparation, implementation, and monitoring (for instance, by establishing CSUs). PPAs are currently active for Kiribati, FSM, Samoa, and Tonga. In addition to PPAs, the PIC9 can also access traditional project-specific preparation advances. These advances have facilitated efficient project preparation in the Pacific CMU, with preparation time from concept to approval of IPF in the Pacific taking 12–13 months, faster than the EAP average of 15 months. 71. Catastrophe Deferred Drawdown Options. IDA’s first ever “hybrid” budget support operation, which combined a regular DPO with a Cat-DDO, was approved for Samoa in November 2018. Cat-DDOs provide immediate liquidity to countries in the aftermath of a significant natural disaster, while longer-term recovery funding is mobilized. This structure is particularly appropriate for small island developing states such as the PIC9, given: (i) the importance of policy reforms to address vulnerability to natural disasters and climate change; (ii) the need for financing that disburses quickly and with certainty in the aftermath of a natural disaster, in addition to traditional budget support; and (iii) in an environment where capacity is thin, the efficiency gains of working with one operation (rather than two separate operations), one set of prior actions, and one set of reporting requirements, both for the government and for the Bank. A similar hybrid operation is currently under preparation for Tuvalu. Vanuatu is using a portion of its IDA18 allocation for a standalone Cat-DDO. Leveraging evolving partnerships in the Pacific 72. Some of the largest bilateral partners in the Pacific are Australia, New Zealand, China, Japan, the European Union, and the USA. The WBG works very closely with Australia and New Zealand in the region. Total ODA from Australia to the PIC9 has been estimated at AU$171.8 million for 2018–19 (Table 5) and at NZ$347 million from New Zealand for the three-year period of 2015–18 (Table 6). 73. Pacific Facility 4 (PF4). Support to the PIC9 from Australia and New Zealand is channeled primarily through PF4, a multi-donor trust fund established in July 2014. PF4 leverages the Bank’s substantial lending capacity, technical and development expertise, and strong fiduciary and accountability systems to support fit-for-purpose analytical work and scaled-up projects in the Pacific. Australia and New Zealand initially committed to providing AU$20 million and NZ$3.8 million in core funding, respectively, from July 2014 to June 2018. The trust fund has been extended to June 2022, with Australia committing an additional AU$22 million in core funding and New Zealand an additional NZ$24.6 million. Core contributions through PF4 have complemented the Bank budget and have been instrumental in ensuring that client countries have been able to maximize the impact of the substantial increase in IDA funding. PF4 has supported the timely delivery of the IDA18 scale-up by directly contributing to the preparation of selected IDA18 investments, including the RMI Early Childhood Development and Nutrition Project (P166800), the RMI and FSM Maritime Investment Projects (P161382, P163922), the Samoa Agriculture and Fisheries Productivity and Marketing Project (P165873), the Tonga Pathway to Sustainable Oceans (P164941), and the Tuvalu Telecommunications and ICT Development Project (P159395). 21 Table 5. Australia—Total official development assistance to the Table 6. New Zealand—Total official development PIC9 (AU$ million) assistance to the PIC9 (NZ$ million) 2019–20 2018–19 total 2019–20 total 2015–18 total 2018–21 total bilateral Country Australian ODA Australian ODA Country New Zealand New Zealand budget estimate estimate ODA ODA allocation estimate Kiribati $27.4 $27.3 $20.2 Kiribati $57.78 $91.00 RMI RMI FSM $9.5 $8.4 $5.0 FSM $3.42 Palau Palau Samoa $34.0 $32.0 $23.6 Samoa $80.09 $79.77 Tonga $28.9 $26.6 $17.6 Tonga $79.28 $64.77 Tuvalu $9.0 $9.3 $6.6 Tuvalu $30.48 $38.33 Vanuatu $63.0 $66.2 $41.9 Vanuatu $95.97 $76.99 74. PF4 has also enabled the Bank to be responsive to client requests for ASAs. The fund has supported the Pacific Labor Mobility Programmatic ASA (P155609) and the programmatic Pacific Health Analytical and Technical Assistance (2015–18). It currently supports the new program of health ASAs (Pacific Health Analytical and Technical Assistance 2018–22, P166032), as well as work related to violence awareness and mitigation (GBV and Violence Against Children—Awareness and Mitigation, P166879) and digital development (Pacific Digital Opportunities, P170396), among other efforts. 75. Australia–Pacific Islands Partnership Trust Fund (APIP). APIP is a programmatic, multi-sector, single-donor trust fund established with Australia in December 2015 to support Bank programs across the 12 PICs 23 that are members of the World Bank. This fund complements PF4 and builds on the strong partnership established through the Pacific Region Infrastructure Facility (discussed below). Commitments from Australia through APIP directly support RPF project activities as well as associated implementation support costs in Kiribati, Palau, Samoa, and Tonga in various sectors. For example, APIP currently supports the Palau Telecommunications Reform (P160504), the Samoa Connectivity Project (P128904), the Samoa Enhanced Road Access Project (P145545), the Skills and Employment for Tongans Project (P161541), which includes establishment of the Tonga CSU), and additional financing to the Tonga Pacific Resilience Program (P158480). 76. Pacific Region Infrastructure Facility (PRIF) and the PRIF Trust Fund. PRIF is a coordination facility for principal development partners in the region that also provides technical assistance, research, and knowledge products on key infrastructure issues to PICs. 24 There is also, a PRIF Trust Fund, which is a multi-donor trust fund administered by the World Bank that aims to improve both the quality and quantity of infrastructure support in PICs. The trust fund was initiated in 2009 by the Australian Department of Foreign Affairs and Trade (DFAT), and the New Zealand Ministry of Foreign Affairs and Trade (NZMFAT) joined 2014. In addition to supporting advisory and knowledge services, the PRIF trust fund provides infrastructure financing that blends funding from PRIF grants, multilateral loans, PIC government budgets, and private sector equity/loans to finance the costs of providing sustainable infrastructure services. PRIF has been, and continues to be, a key donor coordination mechanism in the region, which ensures that multilateral and bilateral support to PICs is well targeted and does not duplicate or conflict with the work of other development partners. 77. Australia–New Zealand–IFC Pacific Partnership. IFC’s second Pacific Partnership was signed with Australia for A$20 million in January 2017, and with New Zealand in May 2017 for US$3 million. The new five-year partnership delivers interventions across the following three strategic priority areas: (i) accelerating access to infrastructure; (ii) leveraging existing business through direct and indirect 23 PIC9, Fiji, Papua New Guinea, and Solomon Islands. 24 See https://www.theprif.org/. 22 investments (primarily in manufacturing, agribusiness, and services), exploring small and medium enterprise (SME) linkages, and risk-sharing with partner banks; and (iii) enabling market opportunities through improving access to and reducing costs of payment systems, mobile banking, remittances, and ICT; lowering the cost and complexity of doing business (investment policy, trade facilitation, systems simplification); and intervening at the sector or thematic levels (gender, tourism). These three strategic priority areas map closely to the central findings of the WBG Systematic Country Diagnostic and RPF and are directly derived from the IFC Pacific Strategy. 78. Renewed international interest in the Pacific. In November 2018, Australia, Japan, and the USA signed the Trilateral Partnership for Infrastructure Investment in the Indo-Pacific, which aims to “mobilize and support the deployment of private sector investment capital to deliver major new infrastructure projects, enhance digital connectivity and energy infrastructure, and achieve mutual development goals in the Indo-Pacific.” 25 This combined effort reflects the renewed emphasis on engaging in the Pacific region, which was signaled in Australia’s 2017 Pacific Step Up 26 and New Zealand’s 2018 Pacific Reset. 27 The USA joined PRIF in December 2018 to support infrastructure development across the Pacific and to better coordinate its ODA in the region. In June 2019, the United States Department of Defense released its Indo-Pacific Strategy Report, 28 which explicitly states that the Indo-Pacific region is a top priority for US security and development. Meanwhile, China’s engagement in the region is actioned primarily through bilateral mechanisms and the Belt and Road Initiative, which is the primary vehicle for China’s global development agenda. 79. Another key player coming into the region, the UK, is expanding its overseas network (which includes nine additional Commonwealth Posts) and rolling out its latest Pacific Uplift Strategy. The UK recently established new diplomatic posts in Samoa, Tonga, and Vanuatu. It has committed US$88 million to the Commonwealth Clean Oceans Alliance, 29 a new initiative to fight plastic pollution in the Pacific and other oceans. Tuvalu has also received a new diplomatic post, with Australia becoming the second government with a diplomatic mission there (the first being Taiwan, China). IV. EMERGING LESSONS FROM PORTFOLIO AND PROGRAM IMPLEMENTATION AND PERFORMANCE What Has Worked Well Selectivity 80. In the past, the World Bank Pacific portfolio included a proliferation of small trust-funded projects. 30 Such projects require at least the same level of fiduciary and implementation support as regular IBRD, IDA, and large trust-funded operations, if not more. Implementation of a large number of small projects seriously stretched client capacity. To address this issue and reduce fragmentation within the Pacific portfolio, the Pacific CMU applied a US$5 million minimum to all operations and restricted its IDA18 pipeline to four IPFs and one DPO series per country, facilitated by frontloading 25The Governments of Australia, Japan, and the United States of America. 2018. Joint Statement of The Governments of Australia, Japan, and the United States of America on the Trilateral Partnership for infrastructure investment in the Indo-Pacific. Available at: https://www.pm.gov.au/media/joint-statement-governments-australia-japan-and-united-states 26 Australian Department of Foreign Affairs and Trade. 2017. Foreign Policy White Paper. Canberra. Available at: https://www.fpwhitepaper.gov.au/ 27New Zealand Ministry of Foreign Affairs and Trade. 2018. Strategic Intentions. Wellington. Available at: https://www.mfat.govt.nz/ assets/MFAT-Corporate-publications/MFAT-Strategic-Intentions-2018-2022.pdf 28 United States Department of Defense. 2019. Indo-Pacific Strategy Report: Preparedness, Partnerships, and Promoting a Networked Region. Washington, DC. Available at: https://media.defense.gov/2019/Jul/01/2002152311/-1/-1/1/department-of-defense-indo-pacific- strategy-report-2019.pdf 29 See https://bluecharter.thecommonwealth.org/action-groups/marine-plastic-pollution/. 30 Recipient-executed trust funds < US$5 million. 23 (in some cases, exceptionally) of IDA18 resources. It is expected that these parameters will be tightened to three IPFs and one DPO series per country in IDA19, although the Bank makes exceptions for projects of strategic or critical importance to clients. For example, the following additional financings of less than US$5 million were included in the pipeline: Tuvalu Aviation Investment Project Additional Finance (P163856) and Samoa Enhanced Road Access Project Additional Finance (P165943) in FY18, and the PREP projects in RMI (P166974), Samoa (P167152), and Tonga (P167166), as well as the Samoa Aviation Investment Project Additional Finance (P169279), in FY19. Increased World Bank staffing across the Pacific, combined with the establishment of CSUs 81. Considering the fragile context, inherent challenges in the operating environment, and capacity constraints in the PIC9, strong project preparation and implementation support from the World Bank was central to ensure that the push to deliver the IDA18 scale-up did not slow implementation. The Bank increased its regional presence in the Pacific from 108 staff in FY17 to 125 by the end of FY19 and opened a new South Pacific Hub in Suva, Fiji. An operations officer is now based in Pohnpei in FSM, where plans to open a liaison office are underway. The Pacific CMU has six dedicated liaison officers in the Pacific (one shared with the ADB), in addition to more operations analysts, operations officers, fiduciary specialists, and technical specialists based in the region to provide direct assistance to client countries. Operations staff in particular are able to provide more intensive, hands-on, and real-time implementation support across the portfolio. IFC’s reorganization resulted in a prolonged vacancy in Vanuatu, but as noted, a Resident Representative has been assigned in Fiji as well as a senior resource in Sydney. A local hire is proposed to be engaged in Vanuatu. 82. The CSUs are also showing promise, with in-country capacity already increasing. In RMI and FSM for example, the CSUs ensure a consistent procurement approach and quality assurance across World Bank–financed projects. The CSUs have also arranged for a pool of procurement specialists to be available under framework agreements to meet all project procurement demands during surge periods. Meanwhile, the Tonga CSU is quickly becoming an important focal point for comprehensive solutions on public procurement matters under World Bank–financed projects. For example, in August 2019 the CSU hosted the first Business Opportunities Seminar in Tonga, which not only provided information to local companies on upcoming opportunities but reviewed strategies for winning government contracts. The Bank has since received requests for support to establish CSUs in Kiribati and Tuvalu. Proactive review of individual country portfolios 83. Since FY17, the Pacific CMU has systematically undertaken in-country reviews of the PIC9 portfolio. As noted, portfolio reviews in four PIC9 countries (RMI, Samoa, Tonga, and Vanuatu) are complete. These reviews examine the performance of the Bank’s active portfolio in each country and identify critical cross-cutting issues within the portfolio. Box 1 presents a selection of lessons from the reviews. The reviews are a significant step toward improving operational efficiency in current and future projects in the Pacific, through frank discussion and close collaboration with client countries. The portfolio reviews have also provided an opportunity for the Bank to deliver targeted capacity building to clients to address key issues identified as impeding project implementation. Such training has served as a precursor to the PICBP, leading to the first official PICBP course, which was held in RMI in October 2019, following the portfolio review. Box 1. Key findings and lessons of recent country portfolio reviews Land issues require a high level of planning, monitoring, and timely action. Complications in land ownership and management can increase the risk of implementation delays. The availability of land is often uncertain (particularly in atoll states), social tensions are potentially associated with land acquisition, and clients and the World Bank must invest significant time in managing these risks. Land issues require a high level of intervention 24 and monitoring, and projects need to ensure timely action and sequencing of activities, particularly in relation to land compensation. The early design and identification of land requirements is an important factor in mitigating the risk of delays, as well as strong participation and input from relevant land ministries. Ongoing and inclusive stakeholder engagement is also essential to help manage these risks. For example, in Vanuatu land ownership issues prevented the implementing agency of the Increasing Resilience to Climate Change and Natural Hazards Project (P112611) from accessing the seismic monitoring station at the mount of the Yasur Volcano. The issue was resolved through consultations with the landowners through the provincial authorities and the Nikoletan Council of Chiefs. A presentation described the project, emphasized the importance of the station for monitoring risks posed by the volcano, and raised awareness of disaster preparedness in the surrounding communities. Following the consultation, the project was granted access to use the land indefinitely for the monitoring station. Procurement should be strategic rather than transactional. In a number of instances, project management and work programming failed to consider the timing and sequencing of activities and to assign sufficient time and resources to manage the related procurement processes, especially for design, works, and supervision. Significant delays in key procurement activities delayed implementation and caused original disbursement estimates and actual disbursements to diverge. When procurement activities are treated as transactional rather than strategic, they can lead to inadequate terms of reference, technical specifications, and approaches to market, as well as to numerous contract variations. Unsatisfactory documentation requires procurement submissions to undergo several revisions, so procurement takes longer than ordinarily expected. In Tonga, as a result of delayed procurement under projects related to aviation, Cyclone Ian, and transport sector consolidation, the defects liability period for several works extended beyond the project closing date, meaning that the government was then responsible for costs and resources associated with monitoring and managing the defects liability period. Proactive, strategic contract management would ease implementation, improve the quality of project inputs, and reduce costs. Several projects across the country portfolios under review showed no evidence of formal contract management planning. Because many contracts were managed reactively rather than proactively, contract performance and compliance were often suboptimal. In some cases, contracts expired before the expected output was delivered; in others, payments were not made in accordance with the terms of the contract, resulting in overpayment and potentially ineligible expenditures that exposed government to adverse financial impacts. In Samoa, for example, poor contract administration and understanding of contract variations meant that the Enhancing the Climate Resilience of Coastal Resources and Communities Project (P126596) undertook an entirely new procurement process for consultants instead of extending contracts for current consultants whose performance had been satisfactory. In Vanuatu, many contracts under the Increasing Resilience to Climate Change and Natural Hazards Project (P112611) reached their time or value limits before the deliverable was provided. As a result of poor contract administration, consultants routinely claimed 28 days per month, reaching the contract ceiling before the end of the contract period. A clear understanding of contact provisions and remedies, as well as the close monitoring of contract performance and payment, is critical for effective project implementation. Monitoring and evaluation require systematic attention. Work plans, both formal and informal, and sequencing of project activities often were not aligned with yearly targets in project results frameworks, and implementing agencies frequently treated results monitoring as an afterthought. To address this concern in Vanuatu, it was recommended that the government undertake regular Project Steering Committee meetings to provide an opportunity for looking closely at the results frameworks and achievement of results across projects. The portfolio reviews raised awareness among counterparts about using project restructuring to adjust project results frameworks. Clarify the government’s position at the outset to limit the impacts of changes in government direction on project implementation and outcomes. Vested interests of influential stakeholders may affect work planning and budgets, and frequent changes in government direction can slow project implementation and undermine activities. For example, the Tonga Transport Sector Consolidation Project (P096931) shifted from using force accounts to using private contractors, then reverted to force accounts, and then reverted once again to private contracting when a new minister was appointed. These shifts exacerbated delays in procurement and the completion of works. To the extent possible, it is important to minimize the impacts of changes in government on projects by clarifying the government’s position before/during project preparation. 25 Avoid budget shortfalls through better project costing and budget monitoring. The underestimation of project costs requires projects to seek additional financing to cover budget shortfalls. The portfolio reviews found that project budgets were often tight, with no contingencies, and that close monitoring and reporting were required, especially as projects neared closing. Budget shortfalls can be minimized by building physical, price, and currency contingencies into project budgets at the outset and ensuring that project management and FM staff are able to monitor and manage these contingencies. Ensure that stakeholders are aware of project benefits, impacts, and grievance redress options. Citizen awareness and communication campaigns are important to achieve project development objectives. Across and within projects, ensure consistency of messaging to facilitate stakeholders’ understanding of project benefits and impacts. Sometimes a greater effort is needed to improve beneficiaries’ and stakeholders’ understanding of grievance redress mechanisms and how to use them. A pragmatic approach to the application of fiduciary requirements in the Pacific 84. Financial management. Considering FM capacity constraints in the PIC9, a general approach now applied in the region is to require interim financial reports to be submitted on a six-monthly rather than quarterly basis. The option also exists to extend the audit submission period from the usual six months to a longer period, if this alternative aligns with the country’s own legal requirements; for example, RMI and FSM allow nine months for the submission of audits. Finally, the Bank uses an exception to set a “fixed date” for the first audit of a new project, which can cover a period longer than the usual 12 months. For instance, if a project is approved in March and the reporting period ends in June, rather than requiring an audit after only three months, the Bank can stipulate in the legal agreements that the first audit will cover a 15-month period and subsequent audits will occur annually thereafter, which reduces the burden on clients. 85. Procurement. Noting that thin procurement capacity and poor work planning by implementing agencies are key issues in the PIC9, the Bank has prepared and provided detailed Procurement Implementation Guidance to implementation agencies in PIC9. This guidance note provides detailed descriptions of steps and procedures for implementing procurement activities and templates for preparing procurement documents in accordance with Bank requirements. To date, about 27 projects have also been prepared and approved under the new Procurement Framework (PF) in the PIC9. It is expected that another 13 projects will be delivered within FY20 under the new PF. Use of the Project Procurement Strategy for Development is providing implementing agencies with a better understanding of procurement planning during project preparation. The PF also focuses the Bank’s prior review on high-value/high-risk contracts, so that the Bank can better use its resources to handle the increased portfolio in the Pacific, provide more assistance to PMUs in preparing procurement arrangements, and build capacity. For example, the prior review threshold for individual consultants was increased from US$50,000 to US$200,000 (high risk), US$300,000 (substantial risk), and US$400,000 (moderate risk). Procurement method thresholds were similarly increased; the shopping threshold for civil works is now US$1 million, which is the highest in the Bank. These steps provide more flexibility for the PIC9 to simplify the procurement process and contracts. The PF also provides more flexibility for streamlining procurement arrangements, including for projects co- financed with other donors through Alternative Procurement Arrangements (discussed later) or joint procurement, to reduce the load on clients and simplify procurement. Close collaboration with development partners 86. The WBG works closely with Australia, New Zealand, ADB, and other key development partners on macroeconomic policy and public FM issues in the region, for example through quarterly meetings of the technical working group on economic policy reform and through the annual Friends of Pacific Budget Support meetings. Providers of budget support to the Pacific take a coordinated approach and agree on joint policy matrices to minimize the burden of required policy actions on 26 clients. In addition, the Pacific Financial Inclusion Donor Group meeting and the semi-annual Private Sector Development donor group meetings are active and regular coordination platforms. The Bank, IFC, and development partners will continue this approach. Regular discussions with budget support partners are valuable for sharing information and jointly developing a “Pacific approach” to budget support that maximizes development impact while minimizing transaction costs for clients. Similar technical working groups enhance collaboration for fisheries, gender, and health (for example, the Pacific Health Quintilateral+ Group). 87. The Pacific CMU also continues to streamline processes with development partners. For example, the World Bank and ADB agreed to jointly prepare the South Tarawa Water Supply Project (P162938) and the Kiribati Outer Islands Transport Infrastructure Investment Project (P165838) to minimize duplication, transaction costs, and complexity for the client. The Alternative Procurement Arrangements specified under the World Bank PF allow the World Bank to rely on and apply ADB procurement rules and procedures, and for ADB to take the lead in providing implementation support and monitoring of procurement activities for these projects. The World Bank and ADB will also adopt a common approach to address each donor’s respective environmental and social requirements, as well as technical supervision arrangements. 88. Other kinds of close collaboration with development partners are facilitated by various formal and informal coordination mechanisms in the Pacific, both at the regional and individual country level. Country-level coordination mechanisms differ, and so does their effectiveness, yet regional coordination among the key traditional development partners in the Pacific is generally excellent. The most successful regional mechanisms, such as Friends of Pacific Budget Support, Pacific Financial Inclusion Donor Group, and PRIF, benefit from substantial investments in time and/or funding by development partners, a strong focus on substantive dialogue and deliberation (as opposed to mere information sharing), and frequent and/or lengthy meetings of working-level practitioners who can identify and solve critical operational as well strategic issues. What Needs Improvement Project readiness and design 89. The World Bank could take more steps to improve project readiness before implementation begins. Such steps include continued and strategic use of PPAs and project-specific preparation advances, as well as sustained support to CSUs. Project implementation (and monitoring, as discussed next) also suffer if activities are vaguely defined. While the Bank has made strides in improving the selectivity of its interventions in the PIC9, project designs need to ensure that project development objectives, procurement plans, and expectations are realistic about the results that can be achieved over the course of implementation. Selectivity will also continue to be important at the portfolio level, especially if the IDA19 replenishment is of a similar magnitude to IDA18. Considering the structural challenges in the PIC9 operating environment, which include limited client capacity and the high levels of risk and vulnerability related to natural disasters, selectivity will remain essential for minimizing the fragmentation and reducing the complexity of individual country portfolios. Monitoring and evaluation 90. The World Bank could also take steps to monitor progress more closely once projects are underway, as monitoring and evaluation remain weak across projects in the PIC9. The Bank should continue to provide intensive capacity building to PMUs and CSUs in these areas, not only through the PICBP, but also through more targeted and in-depth training. Additional operational support from the Pacific CMU may include one-on-one mentoring of PMU staff, which could be undertaken during regular implementation support missions. Close and intensive implementation support on fiduciary issues also remains essential in the PIC9. 27 Working with regional organizations to improve project performance 91. The nine regional projects active at the end of FY19 represented 18% of the portfolio with respect to the number of operations. As noted, three of the nine projects are regarded as problem projects. In March 2018, the Pacific CMU undertook an internal review of its regional projects, which found: • An incomplete understanding of the nature of regional organizations. The Bank assumed that regional organizations would be the most appropriate implementing agencies for projects that were regional in scope. At the outset, however, the Bank did not fully appreciate the considerable variation across regional organizations in legal structures, mandates, skill sets, sources of funding, and ways of working, or the extent to which the operational processes of some organizations differed from those of the Bank. These differences have had a profound impact on project ownership, which in turn has affected the timeliness and quality of implementation, as well as the sustainability of project benefits, to varying degrees. • A limited appreciation of the political economy in the regional space. The Bank also regarded all regional organizations as playing a broadly convening and uniformly influential role in the region. Different regional organizations have different memberships and different political economies, however, and not all of these members are necessarily members of the Bank. When regional organizations are expected to provide a service to Bank client countries through a project but cannot provide the same service to their other members, relationships between/among the regional organization and its membership are affected. • A need to improve regional organizations’ understanding of the World Bank operational model and modalities of support. The Bank’s operational model, policies, and procedures are specifically tailored to governments as recipients of Bank support. Many regional organizations in the Pacific have experienced other modes of engagement with the Bank, however. For example, they have operated as contractors under Bank-executed work, as contractors under work executed by governments that were recipients of Bank support, or as a direct implementing agency. Each of these modes has different requirements, but these differences are not always clear to the regional organizations, which expect to operate in the same manner under each modality. 92. In light of these findings, the Bank is re-evaluating its approach to regional organizations. Efforts to deal more proactively with regional projects in problem status have markedly improved, rising from 0% in FY17 to 50% in FY18 and nearly 67% in FY19. Notably, the Bank has stepped up its engagement with senior management in client regional organizations, which is facilitating better understanding on both sides of how best to work together to achieve project development outcomes, without stretching each other’s mandates. This engagement is also encouraging greater project ownership and increased attention to implementation progress and performance. Nevertheless, the Bank needs to continue to more thoughtfully consider the most suitable governance and implementing arrangements for regional projects in the Pacific, which will require further and closer collaboration with client regional organizations. 93. The IFC has faced challenges in building an investment pipeline, including weak governance, market remoteness, small scale and associated high cost structure, and the limited number of sponsors that meet the economic and social standards and process requirements of IFC. For that reason, IFC is developing regional or platform investments with regional banks and companies with a presence in more than one market. IFC has selected potential partners in commercial renewable energy, climate change mitigation, and sustainable agriculture, recognizing that although the 28 opportunities are not investment-ready, selective upstream engagement will help IFC do more in future. A final consideration: The need for more intensive support for safeguards 94. Safeguards is an area that does not necessarily require improvement but rather requires more intensive support to adapt to the requirements of the Bank’s new Environmental and Social Framework (ESF). The ESF is applied to IPFs with concept decision notes dated after October 1, 2018, including technical assistance projects and Programs for Results (P4Rs) with IPF components. The Bank is mindful that for several years the new ESF and the Bank’s previous safeguards policies will be in effect in the Pacific portfolio. Given thin capacity in the PIC9, the Pacific CMU anticipates that client countries may require more intensive support to ensure compliance with the correct safeguards requirements. V. ADJUSTMENTS TO THE REGIONAL PARTNERSHIP FRAMEWORK 95. The RPF remains relevant and valid at this juncture. The PIC9 are still seeking WBG support for the objectives set out in the RPF. That said, in light of the lessons discussed here and in recognition of the relatively long time needed for implementation to deliver results in the region, this review recommends extending the RPF period by two years to FY23. The extension would: (i) give projects more time for implementation, especially projects only recently approved by the World Bank Board; (ii) enable the Bank to continue providing intensified implementation support and focused capacity building to clients, which is critical to ensure that the expected push for delivery under the forthcoming IDA19 cycle does not slow implementation of the active portfolio; and (iii) ensure that the Bank draws key lessons from the implementation of the significantly expanded IDA18 portfolio to set the stage for future engagement. Given that five of the PIC9 are also expected to hold elections between now and FY21, the extended RPF will also allow sufficient time to engage with new governments following the elections. 96. The PLR also makes two types of adjustments to the RPF results framework: (i) revisions to four objectives, primarily to refine and narrow their scope, and (ii) adjustments to indicators, including revisions to 22 indicators, the addition of 10 indicators, and the removal of 6 indicators.31 The revised indicators reflect no changes in substance—only adjustments in wording, the addition/removal of relevant countries, or changes in targets/timing. New indicators are proposed mostly to capture expected results from recently approved projects. Selected indicators have been dropped because they were not being tracked by the relevant projects, or because they were replaced by new indicators, based on how pipeline projects have materialized. To streamline the results framework, all supplementary progress indicators were dropped. VI. RISKS TO THE REGIONAL PARTNERSHIP FRAMEWORK PROGRAM 97. The risk ratings for the RPF program are unchanged. The overall risk continues to be rated as Substantial. Key risks still include: (i) exogenous macroeconomic shocks; (ii) political and governance risk; (iii) the risk of recurring natural disasters of increased frequency and intensity; and (iv) implementation and capacity constraints. See the summary in Table 7. 31 Excluding supplementary progress indicators. 29 Table 7. Previous and current risk ratings derived from the Systematic Operations Risk Rating Tool Risk category Previous ratings Current ratings Political and governance High High Macroeconomic Substantial Substantial Sector strategies and policies Moderate Moderate Technical design of project or program Moderate Moderate Institutional capacity for implementation and sustainability Substantial Substantial Fiduciary Substantial Substantial Environment and social High High Stakeholders High High OVERALL SUBSTANTIAL SUBSTANTIAL 30 ANNEX 1. UPDATED RPF RESULTS FRAMEWORK FOCUS AREA 1. Fully exploiting available economic opportunities Objective 1.1. Improved management of oceanic and coastal fisheries supported RPF Indicators Key World Bank Group Activities Management of Fisheries Management of Fisheries Purse seine tuna catch in relevant countries encompassed within the VDS of the Ongoing total annual allocation (%) - P151760: PROP RMI - P151754: PROP FSM Baseline Target - P165873: Samoa Agriculture and Fisheries Productivity and Marketing Project FSM 89% 100% - P164941: Tonga Pathway to Sustainable Oceans (09/2016) (06/2023) - P151780: PROP Tuvalu RMI 90% 100% (09/2016) (09/2020) Pipeline Tuvalu 94% 100% - P165821: PROP Kiribati (09/2016) (06/2023) Number of additional coastal fisheries legally managed by stakeholders in each country, with support from the government Baseline Target Tuvalu 0 7 (09/2016) (06/2023) Objective 1.2. Increased incomes from agriculture RPF Indicators Key World Bank Group Activities Increased Incomes from Agriculture Increased Incomes from Agriculture Percentage increase in the value of sales of fruit and vegetable growers Ongoing participating in the Matching Grant Program - P165873: Samoa Agriculture and Fisheries Productivity and Marketing Project Baseline Target Closed Samoa 36% 40% - P115351: Samoa Agriculture Competitiveness and Enhancement Project 31 (03/2016) (03/2018) Percentage increase in the value of sales of livestock producers participating in the Matching Grant Program Baseline Target Samoa 21% 30% (03/2016) (03/2018) Increased average value of sales of fruit and vegetable growers and livestock producers (SAT) Baseline Target Samoa 3,999 4,400 (07/2019) (06/2023) Objective 1.3. Expanded tourism opportunities RPF Indicators Key World Bank Group Activities Expanded Tourism opportunities Expanded Tourism opportunities Change in tourist (non-resident) international arrivals from China, both air and Ongoing cruise tourism - 602286: Solomon Island, Vanuatu, and Pacific Island Tourism (IFC) Baseline Target Vanuatu 0 8,500 (2017) (2023) Increase in sales revenue from businesses implementing IFC recommendations (US$) Baseline Target Vanuatu 0 5,000,000 (2017) (2023) 32 FOCUS AREA 2. Enhancing access to employment opportunities Objective 2.1. Broadened opportunities for access to labor markets RPF Indicators Key World Bank Group Activities Labor Mobility Labor Mobility Increase the number of Pacific seasonal workers participating in the Seasonal Ongoing Worker Programme (SWP) and Pacific Labour Scheme (PLS) annually over the RPF - P161541: Skills and Employment for Tongans period. - P171638: Expanding Labor Mobility and Social Protection in the Pacific Islands ASA Workers from PICs (excluding Timor-Leste) Closed Baseline Target - P155609: Pacific Labor Mobility Programmatic ASA SWP 4,266 8,532 (2015–16) (2020–21) PLS 0 1,000 (2017) (2020–21) Objective 2.2. Addressing education and skills gap RPF Indicators Key World Bank Group Activities School Readiness and Early Grade Literacy School Readiness and Early Grade Literacy Pilot of school readiness interventions completed Closed - P145154: Pacific Early Age Readiness and Learning ASA Baseline Target Tonga No Yes Pipeline (2016) (2019) - P171681: Tuvalu Early Learning Project Tuvalu No Yes (2016) (2019) Pilot of the early grade literacy program completed Baseline Target Kiribati No Yes 33 (2016) (2019) Tonga No Yes (2016) (2019) Tuvalu No Yes (2016) (2019) Enhanced Skills Development Enhanced Skills Development Number of beneficiaries enrolled in a certificate-level qualification Ongoing - P161541: Skills and Employment for Tongans Baseline Target Tonga 0 600 (08/2018) (06/2023) Number of beneficiaries in work ready pool Baseline Target Tonga 0 1,600 (08/2018) (06/2023) Objective 2.3. Addressing gender inequality RPF Indicators Key World Bank Group Activities Gender Gender Percentage of new IBRD/IDA projects (approved from FY17) in the PIC9 portfolio Ongoing that are gender-tagged - FY17–19 pipeline - 603990: SI and PIC WINVest (IFC) Baseline Target % projects 72% ≥66% Pipeline (06/2018) (06/2023) - FY20–23 pipeline Number of people directly benefiting from entities’ improved labor policies 34 Baseline Target Number of 0 5,000 people (2016) (2022) FOCUS AREA 3. Protecting incomes and livelihoods Objective 3.1. Strengthened resilience to natural disasters and climate change RPF Indicators Key World Bank Group Activities Disaster and Climate Resilience Disaster and Climate Resilience Direct project beneficiaries Ongoing - P155257: PREP RMI Baseline Target - P154839: PREP Samoa RMI 7,000 13,000 - P154840: PREP Tonga (09/2016) (11/2022) - P155256: PREP Vanuatu Samoa 38,000 100,000 (11/2016) (06/2023) Tonga 24,000 60,000 (11/2016) (06/2023) Increased coverage of hazard forecast and warning messages to population at risk Baseline Target Samoa 50% 80% (11/2016) (11/2022) Tonga 30% 70% (11/2016) (06/2023) Participating PICs have received payment within a month of the occurrence of a covered (insured) event Baseline Target RMI 0 100% (11/2016) (06/2023) Samoa 0 100% (11/2016) (06/2023) 35 Tonga 0 100% (11/2016) (06/2023) Vanuatu 0 100% (11/2016) (11/2020) Objective 3.2. Strengthening health systems and addressing NCDs RPF Indicators Key World Bank Group Activities Health Health Annually completed/updated health public expenditure analysis used to inform Ongoing policy dialogue - P166800: RMI Multisectoral Early Childhood Development Project - P166032: Pacific Health Programmatic ASA Baseline Target - P164382: Samoa Health P4R Kiribati Yes Yes - DPOs supporting health reforms in Samoa and Tonga (12/2016) (06/2018) Samoa No Yes (12/2016) (06/2018) Tonga No Yes (12/2016) (06/2018) Vanuatu Yes Yes (12/2016) (06/2018) Number of beneficiaries receiving health/nutrition promotion Baseline Target RMI 0 TBC (06/2019) Samoa 0 TBC (06/2019) 36 FOCUS AREA 4. Strengthening the enablers of growth opportunities (macroeconomic management, infrastructure, and addressing knowledge gaps) Objective 4.1. Frameworks to improve fiscal management developed and maintained RPF Indicators Key World Bank Group Activities Improved Macroeconomic Management Improved Macroeconomic Management Kiribati. Revenue Equalization Reserve Fund is managed according to the Ongoing prevailing market standards with substantially reduced costs - DPO series in Kiribati, Samoa, Tonga, and Tuvalu Baseline: Costs of 0.2% (12/2015) Target: Costs of no more than 0.08% (12/2018) Samoa. Revenue buoyancy increases from recent average levels. Baseline: Average ratio of domestic revenue to GDP = 24.8% (FY12–16) Target: Average domestic revenue to GDP > 26% (FY18–21) Tonga. Improve wagebill affordability Indicator: Public wagebill as a proportion of domestic revenue Baseline: 57% (06/2014) Target: 53% or lower (07/2019) Tuvalu. The oversight of the banking sector is increased Baseline: No regular monitoring reports (01/2015) Target: Monitoring reports are produced regularly, including information on non- performing loans (NPLs), and tabled to the Cabinet for information (12/2019) Improved Access to Financial Services Improved Access to Financial Services Number of transactions supported via the Ave Pa’anga Pau (APP) remittance Ongoing voucher, New Zealand–Tonga - P585727: Technical Assistance Pacific Payments Project (IFC) Baseline Target Tonga 0 7,000 (07/2016) (06/2022) Number of transactions supported via APP Australia–Tonga Baseline Target 37 Tonga 0 2,000 (01/2019) (06/2022) Objective 4.2. Increased access to basic services RPF Indicators Key World Bank Group Activities Basic Services Basic Services Generation capacity of energy constructed or rehabilitated (MW) Ongoing - P160910: RMI Sustainable Energy Development Project Baseline Target - P165183: FSM Sustainable Energy Development and Access Project FSM 0.0 12.2 - P165183: Sustainable Energy Development Project (10/2016) (11/2022) - P144573: Tuvalu Energy Sector Development Project Kiribati 0 kW 549 kW - P150908/P160658: Vanuatu Rural Electrification Projects I and II (03/2013) (10/2018) RMI 0 5 Pipeline (12/2017) (12/2022) - P162938: South Tarawa Water Supply Project Tuvalu 0.0 0.75 (12/2016) (09/2020) Closed Vanuatu 0.00 4.5 - P112615: Kiribati Adaptation Phase III (closed) (09/2017) (06/2022) - P148560: FSM Energy Sector Development Project - P121878: Kiribati Grid Connected Solar PV Project Number of people provided with access to improved water sources Baseline Target Kiribati 5,000 29,000 (07/2016) (06/2023) Objective 4.3. Improved connective infrastructure RPF Indicators Key World Bank Group Activities Connective Infrastructure – Aviation Connective Infrastructure – Aviation Regulatory certification of safety and security at project airports achieved Ongoing - P143408: Samoa Aviation Investment Project Baseline Target - P128939: Tonga Aviation Investment Project 38 Kiribati No Yes - P128940: Tuvalu Aviation Investment Project (Bonriki (12/2016) (12/2018) - P154149: Vanuatu Aviation Investment Project Airport – TRW) Closed Kiribati No Yes - P128938: Kiribati Aviation Investment Project (Cassidy (12/2016) (12/2018) Airport – CXI) Tonga No Yes (Fua’amotu (12/2016) (12/2019) Airport – TBU) Tonga No Yes (Vava’u (12/2016) (12/2019) Airport – VAV) Tuvalu No Yes (Funafuti (10/2016) (06/2020) Airport – FUN) Regulatory certification of safety and security at project airports maintained Baseline Target Samoa Yes Yes (Faleolo (07/2016) (06/2020) Airport - APW) Vanuatu Yes Yes (Bauerfield (12/2016) (06/2019) Airport – VLI) Airport terminals/runways upgraded or rehabilitated Baseline Target 39 Kiribati No Yes (Bonriki (12/2016) (06/2019) Terminal) Kiribati No Yes (Cassidy (12/2016) (06/2019) Terminal) Tonga No Yes (Fua’amotu (12/2016) (12/2019) Runway) Tonga No Yes (Vava’u (12/2016) (12/2019) Runway) Tuvalu No Yes (Funafuti (12/2016) (06/2020) Runway) Tuvalu No Yes (Funafuti (12/2016) (06/2020) Terminal) Vanuatu No Yes (Bauerfield (12/2016) (06/2018) Runway) Connective Infrastructure – Improved Roads Connective Infrastructure – Improved Roads Direct project beneficiaries (male/female) Ongoing - P126504: Samoa Enhancing the Climate Resilience of West Coast Road Baseline Target - P145545: Samoa Enhanced Road Access Project Kiribati 50,100 60,000 - P165782: Samoa Climate Resilient Transport Project (07/2017) (06/2018) - P161539: Tonga Climate Resilient Transport Project Vanuatu 0 14,000 - P156505: Vanuatu Infrastructure Reconstruction and Improvement Project (03/2016) (06/2021) Closed Roads constructed or rehabilitated (km) - P122151: Kiribati Road Reconstruction Project - P096931: Tonga Transport Consolidation Project Baseline Target 40 Kiribati 38.28 38.5 Pipeline (06/2016) (06/2018) - P167382: Vanuatu Climate Resilient Transport Project Samoa 2.3 32 (08/2017) (08/2022) Tonga 29.5 60 (09/2016) (12/2022) Vanuatu 0 65 (10/2019) (12/2022) Number of km of roads under regular road maintenance Baseline Target Kiribati 34.8 56 (06/2016) (06/2018) Tonga 462 462 (09/2016) (06/2018) Water crossings constructed/rehabilitated Baseline Target Samoa 1 5 (06/2016) (08/2022) Vanuatu 0 4 (10/2019) (12/2022) Connective Infrastructure – Maritime Connective Infrastructure – Maritime Climate-resilient maritime investments constructed/rehabilitated and operational Ongoing - P161382: RMI Maritime Investment Project Baseline Target - P163922: FSM Maritime Investment Project Tonga 0% 100% - P161540: Tuvalu Maritime Investment in Climate Resilient Operations (09/2018) (12/2022) Tuvalu 0% 80% (Nanumaga) (01/2019) (01/2023) Tuvalu 0% 80% 41 (Funafuti) (01/2019) (01/2023) Connective Infrastructure – ICT Connective Infrastructure – ICT Increased access to internet services (number of subscribers per 100 people) Ongoing - P159632: Kiribati Connectivity Project Baseline Target - P130592: FSM Connectivity Project Kiribati 15 45 - P128904: Samoa Connectivity Project (12/2016) (05/2022) - P159395: Tuvalu Connectivity Project FSM 2.8 40 (05/2018) (01/2020) Closed Samoa 27 55 - P113184: Tonga Connectivity Project (06/2015) (07/2020) Tonga 25 40 (08/2016) (07/2018) Tuvalu 2,800 3,500 (10/2018) (11/2021) Reduced internet wholesale bandwidth price (US$/Mbps) Baseline Target Kiribati 700 250 (12/2016) (05/2022) FSM 1,800 700 (05/2018) (01/2020) Samoa 1,500 400 (06/2015) (07/2020) Tonga 495 150 (08/2016) (07/2018) Tuvalu 750 350 (10/2018) (12/2021) 42 Objective 4.4. Support closing of gaps in poverty data RPF Indicators Key World Bank Group Activities Addressing Knowledge Gaps Addressing Knowledge Gaps Most recent HIES data available for poverty analysis in PIC9 are less than five years Pipeline old. - P171380: Statistical Innovation and Capacity Building in Kiribati - P171377: Statistical Innovation and Capacity Building in Tonga Years since - P168122: Statistical Innovation and Capacity Building in the Pacific (SPC) Latest completion Target - P164889: Improving Data Dissemination and Use in Pacific Islands Countries HIES of latest next HIES (ASA) HIES FSM 2013/14 5 2021/22 Ongoing Kiribati 2006 13 2019/20 - P163131: RMI Public Financial Management Improvement Project RMI 2002 17 2019/20 - P166346: A Review of Spatial Development Issues in Pacific Island Countries Samoa 2018/19 0 TBC (ASA) Tonga 2015/16 3 2020/21 Tuvalu 2015/16 3 2020/21 Vanuatu 2010 9 2019/20 43 ANNEX 2. MATRIX OF CHANGES TO THE ORIGINAL RPF RESULTS FRAMEWORK FOCUS AREA 1. Fully exploiting available economic opportunities Objective 1.1. Improved management of oceanic and Revised. 1.1. Improved management of oceanic and Revised to narrow down the scope of the objective. coastal fisheries coastal fisheries supported Original RPF Indicators Revised RPF Indicators Rationale for Change Management of Fisheries Management of Fisheries Management of Fisheries Percentage of oceanic tuna catch within a country’s waters Revised. Purse seine tuna catch in relevant countries Adjusted wording. that is encompassed within the VDS 32 or a compatible encompassed within the VDS of the total annual allocation system (%) Baseline Target Baseline Target FSM 89% 100% FSM 89% 100% (09/2016) (09/2020) (09/2016) (06/2023) RMI 90% 100% RMI 90% 100% (09/2016) (09/2020) (09/2016) (09/2020) Tuvalu 94% 100% Tuvalu 94% 100% (09/2016) (09/2020) (09/2016) (06/2023) Number of additional coastal fisheries legally managed by Revised. Number of additional coastal fisheries legally Dropped RMI from the table. stakeholders in each country, with support from the managed by stakeholders in each country, with support government from the government Baseline Target Baseline Target RMI 0 24 Tuvalu 0 7 (09/2016) (09/2020) (09/2016) (06/2023) Tuvalu 0 7 (09/2016) (09/2020) 32 The VDS succeeds previous methods to curb overfishing by trading vessel days fishing at sea in places that are subject to the PNA. The indicator covers PIC9 where the PROP is currently being implemented (RMI, FSM, and Tuvalu). 44 Supplementary Progress Indicator Supplementary Progress Indicator Supplementary Progress Indicator A similar system to the VDS is introduced for managing Dropped. Dropped to streamline the results framework. access to the two long-line fisheries (tropical long-line fishery and southern albacore long-line fishery) Baseline Target FSM No Yes (09/2016) (09/2020) RMI No Yes (09/2016) (09/2020) Tuvalu No Yes (092016) (09/2020) Objective 1.2. Increased incomes from agriculture Original RPF Indicators Revised RPF Indicators Rationale for Change Increased Incomes from Agriculture Increased Incomes from Agriculture Increased Incomes from Agriculture Percentage increase in the value of sales of fruit and No change. Percentage increase in the value of sales of No change. vegetable growers participating in the Matching Grant fruit and vegetable growers participating in the Matching Program Grant Program Baseline Target Baseline Target Samoa 36% 40% Samoa 36% 40% (03/2016) (03/2018) (03/2016) (03/2018) Percentage increase in the value of sales of livestock No change. Percentage increase in the value of sales of No change. producers participating in the Matching Grant Program livestock producers participating in the Matching Grant Program Baseline Target Baseline Target Samoa 21% 30% Samoa 21% 30% (03/2016) (02/2018) (03/2016) (02/2018) 45 New. Increased average value of sales of fruit and New indicator consistent with the relevant project. vegetable growers and livestock producers (SAT) Baseline Target Samoa 3,999 4,400 (07/2019) (06/2023) Supplementary Progress Indicator Supplementary Progress Indicator Supplementary Progress Indicator Client days of training provided to farmers (male/female) Dropped. Dropped to streamline the results framework. on technologies and practices for more resilient agriculture Baseline Target Samoa 0 300 (03/2016) (02/2017) Objective 1.3. Expanded tourism opportunities Original RPF Indicators Revised RPF Indicators Rationale for Change Expanded tourism opportunities Expanded tourism opportunities Expanded tourism opportunities Change in tourist (non-resident) international arrivals both Revised. Change in tourist (non-resident) international Revised to limit indicator to changes in international air and cruise tourism (Indicative) arrivals from China, both air and cruise tourism tourist arrivals from China only. Baseline and target revised to reflect this change. Samoa dropped from the project Baseline Target Baseline Target scope. Samoa 131,000 145,000 Vanuatu 0 8,500 (09/2016) (09/2020) (2017) (2023) Vanuatu 108,000 130,000 (09/2016) (09/2020) New. Increase in sales revenue from businesses New indicator consistent with ongoing project. implementing IFC recommendations (US$) Baseline Target Vanuatu 0 5,000,000 46 (2017) (2023) FOCUS AREA 2. Enhancing access to employment opportunities Objective 2.1 Broadened opportunities for access to labor markets Original RPF Indicators Revised RPF Indicators Rationale for Change Labor Mobility Labor Mobility Increase the number of Pacific seasonal workers Revised. Increase the number of Pacific seasonal workers Though attribution is difficult to establish, a focus on the participating in the SWP annually over the RPF period. participating in the SWP and PLS annually over the RPF total number of workers coming to Australia under the SWP period. and the new PLS is appropriate, given the important role the Baseline Target Bank’s ASA work has played in informing the establishment (06/2016) (06/2021) Workers from PICs (excluding Timor-Leste) and design of such schemes. A focus on numbers from Kiribati 11 20 Baseline Target individual countries is not appropriate, as an employer’s Nauru 17 30 SWP 4,266 8,532 choice of workers from different PICs is very much outside Samoa 185 330 (2015–16) (2020–21) the control of the Bank, and the Bank’s regional ASA work Tonga 2,179 3,900 PLS 0 1,000 does not explicitly seek to increase numbers from a specific Tuvalu 7 10 (2017) (2020–21) country. Vanuatu 567 1,000 Objective 2.2 Addressing education and skills gap Original RPF Indicators Revised RPF Indicators Rationale for Change School Readiness and Early Grade Literacy School Readiness and Early Grade Literacy School Readiness and Early Grade Literacy Number of early childhood care and education (ECCE) and Revised. Pilot of school readiness interventions completed Revised for clarity. Added Tonga. Dropped Kiribati as it did school readiness interventions completed not participate in the pilot. Baseline Target Baseline Target Tonga No Yes Kiribati 0 1 (2016) (2019) (06/2016) (06/2017) Tuvalu No Yes Tuvalu 0 1 (2016) (2019) (06/2016) (06/2017) 47 Number of early grade reading improvement interventions Revised. Pilot of the early grade literacy program Revised for clarity. Added Tonga. completed completed Baseline Target Baseline Target Kiribati 0 1 Kiribati No Yes (06/2016) (06/2017) (2016) (2019) Tuvalu 0 1 Tonga No Yes (06/2016) (06/2017) (2016) (2019) Tuvalu No Yes (2016) (2019) Supplementary Progress Indicators Supplementary Progress Indicators Supplementary Progress Indicator Production of country diagnostic reports on ECCE services Dropped. Dropped to streamline the results framework. and early grade reading levels Baseline Target Samoa 0 2 (03/2016) (06/2018) Increased Access to Education Increased Access to Education Increased Access to Education Number of schools reconstructed and upgraded to higher Dropped. More appropriately considered a supplementary progress structural safety standards indicator, and such indicators are being dropped to streamline the results framework. Baseline Target Vanuatu 0 40 (03/2016) (06/2021) Enhanced Skills Development Enhanced Skills Development Enhanced Skills Development Number of beneficiaries graduating from pre-employment Dropped. Replaced with new indicator for Tonga that is more aligned training (tracked by gender) with the relevant project. 48 Baseline Target Tonga 0 40 (08/2018) (06/2021) New. Number of beneficiaries enrolled in a certificate-level New indicator consistent with the relevant project. qualification Baseline Target Tonga 0 600 (08/2018) (06/2023) New. Number of beneficiaries in work ready pool New indicator consistent with the relevant project. Baseline Target Tonga 0 1,600 (08/2018) (06/2023) Supplementary Progress Indicator Supplementary Progress Indicator Supplementary Progress Indicator Percentage of beneficiaries who report an increase in Dropped. Dropped to streamline the results framework. knowledge, skills, and confidence to participate in the labor market Baseline Target Male 0 60% (08/2018) (06/2021) Female 0 60% (08/2018) (06/2021) Objective 2.3 Addressing gender inequality and gender- Revised. 2.3. Addressing gender inequality Dropped the reference to gender-based violence, as based violence activities and expected results in this area are not well defined. Original RPF Indicators Revised RPF Indicators Rationale for Change Gender Gender Gender 49 Percentage of active IDA projects in the country portfolio Dropped. Dropped, as this information is also captured by the that are gender informed gender tag indicator below. Baseline Target % projects 66% 66% (06/2018) (06/2021) Percentage of all projects under implementation that have Revised. Percentage of new IBRD/IDA projects (approved Revised to more clearly refer to projects added to the one or more gender related indicators in the results from FY17) in the PIC9 portfolio that are gender-tagged active PIC9 portfolio after approval of the RPF, and for framework consistency with the corporate gender-tagging process. Baseline Target Baseline Target % projects 72% ≥66% % projects 72% ≥66% (06/2018) (06/2021) (06/2018) (06/2021) New. Number of people directly benefiting from entities’ New indicator consistent with ongoing project. The project improved labor policies addresses gender/labor issues in the workplace and is expected to benefit both men and women. Results will be Baseline Target disaggregated by gender, but as clients are still being Number of 0 5,000 identified, it is not possible to indicate the proportion of people (2016) (2022) men/women at this time. Supplementary Progress Indicator Supplementary Progress Indicator Supplementary Progress Indicator Stock-take and analysis of GBV in the PIC9 and Dropped. Dropped to streamline the results framework. identification of specific WBG activities on GBV 50 FOCUS AREA 3. Protecting incomes and livelihoods Objective 3.1 Strengthened resilience to natural disasters and climate change Original RPF Indicators Revised RPF Indicators Rationale for Change Disaster and Climate Resilience Disaster and Climate Resilience Disaster and Climate Resilience Direct project beneficiaries Revised. Direct project beneficiaries The target for Samoa was increased. Timing of targets for Samoa and Tonga adjusted. Added RMI. Baseline Target Baseline Target Samoa 38,000 75,000 RMI 7,000 13,000 (11/2016) (11/2020) (09/2016) (11/2022) Tonga 24,000 60,000 Samoa 38,000 100,000 (11/2016) (11/2020) (11/2016) (10/2023) Tonga 24,000 60,000 (11/2016) (06/2023) Increased coverage of hazard forecast and warning Revised. Increased coverage of hazard forecast and Timing of targets for Samoa and Tonga adjusted. messages to population at risk warning messages to population at risk Baseline Target Baseline Target Samoa 50% 80% Samoa 50% 80% (11/2016) (11/2020) (11/2016) (11/2022) Tonga 30% 70% Tonga 30% 70% (11/2016) (11/2020) (11/2016) (06/2023) Participating PICs have received payment within a month Revised. Participating PICs have received payment within a Adjusted wording. Timing of targets for RMI, Samoa, and of the occurrence of a covered (insurance) event. month of the occurrence of a covered (insured) event Tonga adjusted. Baseline Target Baseline Target RMI 0 100% RMI 0 100% (11/2016) (11/2020) (11/2016) (06/2023) Samoa 0 100% Samoa 0 100% (11/2016) (11/2020) (11/2016) (06/2023) Tonga 0 100% Tonga 0 100% (11/2016) (11/2020) (11/2016) (06/2023) 51 Vanuatu 0 100% Vanuatu 0 100% (11/2016) (11/2020) (11/2016) (11/2020) Supplementary Progress Indicator Supplementary Progress Indicator Supplementary Progress Indicator Multi-hazard early warning systems are established and Dropped. Dropped to streamline the results framework. operating Baseline Target Samoa No Yes (11/2016) (11/2020) Tonga No Yes (11/2016) (11/2020) Objective 3.2 Strengthening health systems and addressing NCDs Original RPF Indicators Revised RPF Indicators Rationale for Change Health Health Annually completed/updated health public expenditure Revised. Annually completed/updated health public Table revised to include Tonga. analysis used to inform policy dialogue expenditure analysis used to inform policy dialogue Baseline Target Baseline Target Kiribati Yes Yes Kiribati Yes Yes (12/2016) (06/2018) (12/2016) (06/2018) Samoa No Yes Samoa No Yes (12/2016) (06/2018) (12/2016) (06/2018) Vanuatu Yes Yes Tonga No Yes (12/2016) (06/2018) (12/2016) (06/2018) Vanuatu Yes Yes (12/2016) (06/2018) 52 Timely and accurate production of monthly, quarterly, and Dropped. Dropped as this is not being undertaken under the relevant annual financial reports to inform annual business plan and programmatic ASA. budget Baseline Target Vanuatu No Yes (12/2016) (06/2018) New. Number of beneficiaries receiving health/nutrition New indicator consistent with the relevant projects. promotion Baseline Target RMI 0 TBC (06/2019) Samoa 0 TBC (06/2019) FOCUS AREA 4. Strengthening the enablers of growth opportunities (macroeconomic management, infrastructure, and addressing knowledge gaps) Objective 4.1 Frameworks to improve fiscal management developed and maintained Original RPF Indicators Revised RPF Indicators Rationale for Change Improved Macroeconomic Management Improved Macroeconomic Management Improved Macroeconomic Management Kiribati. Revenue Equalization Reserve Fund is managed No change. No change. according to the prevailing market standards with substantially reduced costs Baseline: Costs of 0.2% (12/2015) Target: Costs of no more than 0.08% (12/2018) New. Samoa. Revenue buoyancy increases from recent New indicator consistent with the relevant projects. average levels. Baseline: Average ratio of domestic revenue to GDP = 24.8% (FY12–16) Target: Average domestic revenue to GDP > 26% (FY18–21) Tonga. Improve wagebill affordability No change. No change. 53 Indicator: Public wagebill as a proportion of domestic revenue Baseline: 57% (06/2014) Target: 53% or lower (07/2019) Tuvalu. The oversight of the banking sector is increased No change. No change. Baseline: No regular monitoring reports (01/2015) Target: Monitoring reports are produced regularly, including information on NPLs, and tabled to the Cabinet for information (12/2019) Improved Access to Financial Services Improved Access to Financial Services New. Number of transactions supported via APP New New indicator consistent with the relevant projects. Zealand–Tonga Baseline Target Tonga 0 7,000 (07/2016) (06/2022) New. Number of transactions supported via APP Australia– New indicator consistent with the relevant projects. Tonga Baseline Target Tonga 0 2,000 (01/2019) (06/2022) Objective 4.2 Increased access to basic services and Revised.4.2. Increased access to basic services Revised to split the original objective in two. improved connective infrastructure RPF Objective Indicator Revised RPF Indicators Rationale for Change Basic Services Basic Services Basic Services Generation Capacity of Renewable Energy (other than Revised. Generation capacity of energy constructed or Revised to capture generation capacity of all energy hydropower) constructed rehabilitated (MW) infrastructure constructed or rehabilitated. The baseline 54 and target for Tuvalu were adjusted for consistency with Baseline Target Baseline Target most recent ISR information. Added FSM, Kiribati (active Tuvalu 0.00 MW 1.13 MW FSM 0.0 12.2 during RPF period), RMI, and Vanuatu. (12/2016) (03/2019) (10/2016) (11/2022) Kiribati 0 kW 549 kW (03/2013) (10/2018) RMI 0 5 (12/2017) (12/2022) Tuvalu 0.0 0.75 (12/2016) (09/2020) Vanuatu 0.00 4.5 (09/2017) (06/2022) Number of people provided with access to improved water Revised. Number of people provided with access to Revised target for consistency with the current Project sources improved water sources Appraisal Document. Baseline Target Baseline Target Kiribati 0 62,000 Kiribati 5,000 29,000 (06/2016) (32,000 (07/2016) (06/2023) female) (06/2021) Objective 4.2 Increased access to basic services and Revised. 4.3. Improved connective infrastructure Revised to split the original objective in two. improved connective infrastructure Original RPF Indicators Revised RPF Indicators Rationale for Change Connective Infrastructure – Aviation Connective Infrastructure – Aviation Connective Infrastructure – Aviation Regulatory certification of safety and security at project Revised. Regulatory certification of safety and security at Revised to differentiate between project airports achieving airports project airports achieved regulatory certification for the first time and project airports maintaining their existing certification/s. 55 Baseline Target Baseline Target Kiribati No Yes x 2 Kiribati No Yes (12/2016) airports (Bonriki (12/2016) (12/2018) (12/2018) Airport – Samoa Yes Yes – TRW) (07/2016) revalidation Kiribati No Yes (06/2019) (Cassidy (12/2016) (12/2018) Tonga No Yes x 2 Airport – 12/2016) airports CXI) (12/2018) Tonga No Yes Tuvalu No Yes (Fua’amotu (12/2016) (12/2019) (10/2016) (09/2017) Airport – Vanuatu Yes Yes – TBU) (12/2016) revalidation Tonga No Yes (06/2019) (Vava’u (12/2016) (12/2019) Airport – VAV) Tuvalu No Yes (Funafuti (10/2016) (06/2020) Airport – FUN) Revised. Regulatory certification of safety and security at project airports maintained Baseline Target Samoa Yes Yes (Faleolo (07/2016) (06/2020) Airport - APW) Vanuatu Yes Yes (Bauerfield (12/2016) (06/2019) Airport – VLI) 56 Airport terminals/runways upgraded or rehabilitated Revised. Airport terminals/runways upgraded or Table revised to more clearly identify terminals/runways rehabilitated that are being upgraded or rehabilitated. Added Tonga and Baseline Target Tuvalu. Kiribati No Both Baseline Target (Bonriki (12/2016) terminals Kiribati No Yes and upgraded (Bonriki (12/2016) (06/2019) Cassidy (12/2018) Terminal) terminals Kiribati No Yes Vanuatu No Bauerfield (Cassidy (12/2016) (06/2019) (Bauerfield (12/2016) runway Terminal) runway) rehabilitated Tonga No Yes (06/2018) (Fua’amotu (12/2016) (12/2019) Runway) Tonga No Yes (Vava’u (12/2016) (12/2019) Runway) Tuvalu No Yes (Funafuti (12/2016) (06/2020) Runway) Tuvalu No Yes (Funafuti (12/2016) (06/2020) Terminal) Vanuatu No Yes (Bauerfield (12/2016) (06/2018) Runway) Supplementary Progress Indicator Supplementary Progress Indicator Supplementary Progress Indicator Navigation and safety aids fully operational Dropped. Dropped to streamline the results framework. Baseline Target Kiribati 10% 100% (06/2016) (12/2018) Samoa 0% 100% (07/2016) (06/2018) 57 Tonga 70% 100% (12/2016) (12/2018) Tuvalu 75% 100% (10/2016) (06/2017) Vanuatu 0% 100% (12/2016) (06/2017) Original RPF Indicators Revised RPF Indicators Rationale for Change Connective Infrastructure – Improved Roads Connective Infrastructure – Improved Roads Connective Infrastructure – Improved Roads Direct project beneficiaries (male/female) Revised. Direct project beneficiaries (male/female) Added Kiribati (active during RPF period). Baseline Target Baseline Target Vanuatu 0 14,000 Kiribati 50,100 60,000 (03/2016) (7,000 (07/2017) (06/2018) female) Vanuatu 0 14,000 (06/2021) (03/2016) (06/2021) Roads rehabilitated (km), rural Revised. Roads constructed or rehabilitated (km) Revised to remove differentiation between rural and non- rural roads, as roads in PICs are difficult to strictly classify Baseline Target Baseline Target as one or the other. Baselines and targets adjusted for Kiribati 3.48 5.80 Kiribati 38.28 38.5 consistency with most recent ISR information and to (06/2016) (06/2018) (06/2016) (06/2018) account for new projects. Added Samoa and Vanuatu Tonga 24.5 35 Samoa 2.3 32 (pipeline). (09/2016) (06/2018) (08/2017) (08/2022) Tonga 29.5 60 Roads rehabilitated (km), non-rural (09/2016) (12/2022) Vanuatu 0 65 Baseline Target (10/2019) (12/2022) Kiribati 34.8 56 (06/2016) (06/2018) Samoa 2 33 (06/2016) (04/2019) 58 Tonga 5 5 (09/2016) (06/2018) Number of km of roads under regular road maintenance No change. Number of km of roads under regular road No change. maintenance Baseline Target Baseline Target Kiribati 34.8 56 Kiribati 34.8 56 (06/2016) (06/2018) (06/2016) (06/2018) Tonga 462 462 Tonga 462 462 (09/2016) (06/2018) (09/2016) (06/2018) Bridges rehabilitated to improved standards Revised. Water crossings constructed/rehabilitated Revised to capture water crossings other than bridges, e.g., fords. Added Vanuatu (pipeline). Baseline Target Baseline Target Samoa 0 6 Samoa 1 5 (06/2016) (04/2019) (06/2016) (08/2022) Vanuatu 0 4 (10/2019) (12/2022) Supplementary Progress Indicator Supplementary Progress Indicator Supplementary Progress Indicator Climate-resilient policies, codes, and standards for road Dropped. Dropped to streamline the results framework. construction and maintenance developed and adopted by government Baseline Target (FY17) (FY20) Samoa Identified Adopted Original RPF Indicators Revised RPF Indicators Rationale for Change Connective Infrastructure – Maritime Connective Infrastructure – Maritime Connective Infrastructure – Maritime 59 Regulations in place with improved monitoring Dropped. Replaced with new indicator that is more aligned with the enforcement and compliance mechanisms relevant projects. Baseline Target (06/2016) (06/2021) Tonga No Yes Tuvalu No Yes Supplementary Progress Indicator Supplementary Progress Indicator Supplementary Progress Indicator Number of maritime assets improved for Dropped. Dropped to streamline the results framework. safety/resilience/access (tentative) Baseline Target (06/2016) (06/2021) Tonga 0 3 Tuvalu 0 3 New. Climate-resilient-maritime investments New indicator consistent with the relevant projects. constructed/rehabilitated and operational Baseline Target Tonga 0% 100% (09/2018) (12/2022) Tuvalu 0% 80% (Nanumaga) (01/2019) (01/2023) Tuvalu 0% 80% (Funafuti) (01/2019) (01/2023) 60 Original RPF Indicators Revised RPF Indicators Rationale for Change Connective Infrastructure – ICT Connective Infrastructure – ICT Connective Infrastructure – ICT Access to broadband Internet Services (number of Revised. Increased access to internet services (number of Revised for clarity and to remove the differentiation subscribers per 100 people %) subscribers per 100 people) between fixed and mobile internet services, which the relevant projects are not monitoring/capturing. Baselines Fixed Fixed Baseline Target and targets adjusted for consistency with most recent ISR Baseline Target Kiribati 15 45 information. Added Samoa and Tonga (active during RPF (06/2016) (06/2021) (12/2016) (05/2022) period). Dropped Palau (no engagement). Kiribati 2 10 FSM 2.8 40 FSM 2 3 (05/2018) (01/2020) Palau 2 3 Samoa 27 55 Tuvalu 3 10 (06/2015) (07/2020) Tonga 25 40 Mobile Mobile (08/2016) (07/2018) Baseline Target Tuvalu 2,800 3,500 (06/2016) (06/2021) (10/2018) (11/2021) Kiribati 55 60 FSM 1 35 Palau 1 35 Tuvalu 30 45 Reduction in internet wholesale bandwidth price Revised. Reduced internet wholesale bandwidth price Adjusted wording. Baselines and targets adjusted for (international bandwidth cost/Mbps (US$) (US$/Mbps) consistency with most recent ISR information. Added Samoa and Tonga (active during RPF period). Dropped Baseline Target Baseline Target Palau (no engagement). Kiribati 950 <500 Kiribati 700 250 (06/2016) (06/2021) (12/2016) (05/2022) FSM 900 141 FSM 1,800 700 (06/2016) (06/2021) (05/2018) (01/2020) Palau 650 400 Samoa 1,500 400 (06/2016) (06/2021) (06/2015) (07/2020) Tuvalu 1,000 <600 Tonga 495 150 (06/2016) (06/2021) (08/2016) (07/2018) Tuvalu 750 350 (10/2018) (12/2021) 61 Objective 4.3. Address knowledge gaps Revised. 4.4. Support closing of gaps in poverty data Revised to narrow down the scope of this objective. Original RPF Indicators Revised RPF Indicators Rationale for Change Addressing Knowledge Gaps Addressing Knowledge Gaps Addressing Knowledge Gaps Most recent HIES data available for analyzing poverty in Revised. Most recent HIES data available for poverty Revised for clarity and to include other PIC9 countries RMI and Kiribati are less than five years old analysis in PIC9 are less than five years old. where the Bank has engagement. Baseline Target Years since Kiribati No Yes completion Target Latest HIES (06/2016) (06/2021) of latest next HIES RMI No Yes HIES (06/2016) (06/2021) FSM 2013/14 5 2021/22 Kiribati 2006 13 2019/20 RMI 2002 17 2019/20 Samoa 2018/19 0 TBC Tonga 2015/16 3 2020/21 Tuvalu 2015/16 3 2020/21 Vanuatu 2010 9 2019/20 Study completed on outer island challenges, including an Dropped. Dropped as outside the scope of the revised objective. examination of service delivery, infrastructure, migration, connectivity, etc. Baseline Target Studies No Yes completed (06/2016) (06/2021) 62 ANNEX 3. PROGRESS TOWARD ORIGINAL RPF OBJECTIVES FOCUS AREA 1. Fully exploiting available economic opportunities Objective 1.1. Improved management of oceanic and coastal fisheries RPF Objective Indicator Supplementary Progress Indicator Progress to Date WBG Program Management of Fisheries Management of Fisheries Management of Fisheries Management of Fisheries Percentage of oceanic tuna catch within a Achieved. To date, 100% of oceanic tuna Ongoing country’s waters that is encompassed catch within participating countries’ waters - P151760: PROP RMI within the VDS 33 or a compatible system are encompassed within the VDS or a - P151754: PROP FSM compatible system. - P165873: Samoa Agriculture and Fisheries Baseline Target Productivity and Marketing Project RMI 90% 100% Progress Target - P164941: Tonga Pathway to Sustainable (09/2016) (09/2020) RMI 100% 100% Oceans FSM 89% 100% (06/2019) (09/2020) - P151780: PROP Tuvalu (09/2016) (09/2020) FSM 100% 100% Tuvalu 94% 100% (06/2019) (09/2020) Pipeline (09/2016) (09/2020) Tuvalu 100% 100% - P165821: PROP Kiribati (06/2019) (09/2020) Number of additional coastal fisheries On track. The Tuvalu target was met and legally managed by stakeholders in each exceeded ahead of schedule. Progress was country, with support from the government also made in RMI, but the relevant indicator was restructured to focus on communities, as one community could potentially manage more than one fisheries area. Baseline Target Progress Target RMI 0 24 RMI Not Not (09/2016) (09/2020) applicable applicable 33 The VDS succeeds previous methods to curb overfishing by trading vessel days fishing at sea in places that are subject to the PNA. The indicator covers PIC9 where the PROP is currently being implemented (RMI, FSM, and Tuvalu). 63 Tuvalu 0 7 Tuvalu 9 7 (09/2016) (09/2020) (06/2019) (09/2020) A similar system to the VDS is introduced On track. The target for FSM has been for managing access to the two long-line achieved, while an electronic monitoring fisheries (tropical long-line fishery and system for the tropical long-line fisheries southern albacore long-line fishery) has been piloted in RMI. Tuvalu is addressing this issue regionally through its involvement in setting quotas and target reference points through the Western and Central Pacific Fisheries Commission. Achievement of this indicator in Tuvalu by 2019 will depend on regional outcomes. Baseline Target Progress Target RMI No Yes RMI Yes Yes (09/2016) (09/2020) (06/2019) (09/2020) FSM No Yes FSM Yes Yes (09/2016) (09/2020) (06/2019) (09/2020) Tuvalu No Yes Tuvalu No Yes (09/2016) (09/2020) (06/2019) (09/2020) Objective 1.2. Increased incomes from agriculture RPF Objective Indicator Supplementary Progress Indicator Progress to Date WBG Program Increased Incomes from Agriculture Increased Incomes from Agriculture Increased Incomes from Agriculture Increased Incomes from Agriculture Percentage increase in the value of sales of Achieved. The target in Samoa was Ongoing fruit and vegetable growers participating in exceeded by completion of the relevant - P165873: Samoa Agriculture and Fisheries the Matching Grant Program project. Growers participating in the Productivity and Marketing Project Matching Grant Program reported a 68% increase in the value of fruit and vegetable Closed sales, compared to the target of 40%. A - P115351: Samoa Agriculture 2018 market survey found that between Competitiveness and Enhancement 2013 and 2017, the absolute volume of Project 64 local fruits sold increased by 28%, and the volume of local vegetables sold increased by 85%. Baseline Target Progress Target Samoa 36% 40% Samoa 68% 40% (03/2016) (03/2018) (12/2018) (03/2018) Percentage increase in the value of sales of Achieved. The target in Samoa was livestock producers participating in the exceeded by completion of the relevant Matching Grant Program project. Livestock producers participating in the Matching Grant Program increased the value of their livestock sales by 46%, compared to the target of 30%. Baseline Target Progress Target Samoa 21% 30% Samoa 46% 30% (03/2016) (03/2018) (12/2018) (03/2018) Client days of training provided to farmers Achieved. The relevant project did not (male/female) on technologies and specifically monitor the number of client practices for more resilient agriculture days of training, but by project closure 230 farmers had received training on improved agricultural production practices, and 882 farmers had received training on improved animal husbandry practices. If each training session with each farmer is counted as a “client day,” it is estimated that at least 1,112 client days of training were provided, as some farmers attended more than one training session. Baseline Target Progress Target Samoa 0 300 Samoa ≥ 1,112 300 (03/2016) (02/2017) (12/2018) (02/2017) 65 Objective 1.3. Expanded tourism opportunities RPF Objective Indicator Supplementary Progress Indicator Progress to Date WBG Program Expanded Tourism Opportunities Expanded Tourism Opportunities Expanded Tourism Opportunities Expanded Tourism Opportunities Change in tourist (non-resident) On track. The indicator has been refined to Ongoing international arrivals both air and cruise report changes in international tourist - 602286: Solomon Island, Vanuatu and tourism (Indicative) arrivals from China only. The baseline (0) Pacific Island Tourism (IFC) and target (10,000) have been adjusted accordingly, and Samoa has been dropped from the project scope. The government and private sector in Vanuatu have taken up project recommendations to grow the China market. Targets were already reached halfway through the project, and further steady growth was projected. Baseline Target Baseline Progress Samoa 131,000 145,000 Samoa Not Not (09/2016) (09/2020) applicable applicable Vanuatu 108,000 130,000 Vanuatu 0 6,154 (09/2016) (09/2020) (2017) (2019) FOCUS AREA 2. Enhancing access to employment opportunities Objective 2.1 Broadened opportunities for access to labor markets RPF Objective Indicator Supplementary Progress Indicator Progress to Date WBG Program Labor Mobility Labor Mobility Labor Mobility Labor Mobility Increase the number of Pacific seasonal Achieved in part. The Bank has provided a Closed workers participating in the SWP annually clear sense of the development impacts of - P155609: Pacific Labor Mobility over the RPF period. the SWP, as well as a roadmap for how Programmatic ASA those impacts can be further maximized 66 Baseline Target moving forward. Data collected under the (06/2016) (06/2021) ASA were used to inform reforms to the Kiribati 11 20 SWP and to present a strong business case Nauru 17 30 for hiring Pacific workers to Australian Samoa 185 330 employers currently using alternative Tonga 2,179 3,900 sources of labor. The SWP has since been Tuvalu 7 10 uncapped, and other reforms have been made to simplify participation by Vanuatu 567 1,000 employers. These changes are expected to have an impact on industry uptake of the SWP. Notwithstanding challenges in attributing increased numbers to the ASA, employment opportunities for Pacific seasonal workers could be considered to have been enhanced as a result of the programmatic task. Objective 2.2 Addressing education and skills gap RPF Objective Indicator Supplementary Progress Indicator Progress to Date WBG Program School Readiness and Early Grade Literacy School Readiness and Early Grade Literacy School Readiness and Early Grade Literacy School Readiness and Early Grade Literacy Number of ECCE and school readiness Achieved. Pilots of the school readiness Closed interventions completed intervention under PEARL were completed - P145154 - Pacific Early Age Readiness and in Tonga and Tuvalu. Kiribati did not Learning participate in this pilot. Baseline Target Progress Target Kiribati 0 1 Kiribati 0 0 (06/2016) (06/2017) (06/2017) (06/2017) Tuvalu 0 1 Tonga 1 1 (06/2016) (06/2017) (06/2017) (06/2017) Tuvalu 1 1 (06/2017) (06/2017) 67 Number of early grade reading Achieved. Pilots of the early grade literacy improvement interventions completed program under PEARL were completed in Kiribati, Tonga, and Tuvalu. Baseline Target Progress Target Kiribati 0 1 Kiribati 1 1 (06/2016) (06/2017) (06/2017) (06/2017) Tuvalu 0 1 Tonga 1 1 (06/2016) (06/2017) (06/2017) (06/2017) Tuvalu 1 1 (06/2017) (06/2017) Production of country diagnostic reports on Achieved. Several reports on school ECCE services and early grade reading readiness and early grade reading were levels completed for various countries as show below, exceeding the target, which was limited to Samoa. Number of baseline surveys on school readiness and data analysis reports completed Baseline Target Progress Target Samoa 0 1 (2016) (2017) (06/2016) (06/2018) Kiribati 1 1 Samoa 1 1 Tonga 2 2 Tuvalu 1 1 Number of early grade reading assessments and data analysis reports completed Progress Target (2016) (2017) Kiribati 1 1 68 Samoa 1 1 Tonga 6 6 Tuvalu 1 1 Increased Access to Education Increased Access to Education Increased Access to Education Increased Access to Education Number of schools reconstructed and On track, with delays. The first four schools Ongoing upgraded to higher structural safety to be reconstructed in Vanuatu are well- - P154840: PREP Tonga standards advanced and expected to be completed by - P156505: Vanuatu Infrastructure the second half of calendar year (CY) 2019. Reconstruction and Improvement Project Contracts for another 13 schools have been signed with construction expected to be completed by the end of CY19. Baseline Target Progress Target Vanuatu 0 40 Vanuatu 0 40 (03/2016) (06/2021) (05/2019) (06/2021) Enhanced Skills Development Enhanced Skills Development Enhanced Skills Development Enhanced Skills Development Number of beneficiaries graduating from Percentage of beneficiaries who report an No progress. Implementation of the Ongoing pre-employment training (tracked by increase in knowledge, skills and relevant project in Tonga (approved August - P161541: Skills and Employment for gender) confidence to participate in the labor 2018) is still in the very early stages. Tongans market Baseline Target Baseline Target Tonga 0 40 Male 0 60% (08/2018) (06/2021) (08/2018) (06/2021) Female 0 60% (08/2018) (06/2021) 69 Objective 2.3 Addressing gender inequality and gender-based violence RPF Objective Indicator Supplementary Progress Indicator Progress to Date WBG Program Gender Gender Gender Gender Percentage of active IDA projects in the Achieved. A gender analysis was done for country portfolio that are gender-informed 90% of IDA projects under implementation. Baseline Target Progress Target % projects 66% 66% % projects 90% 66% (06/2018) (06/2021) (06/2019) (06/2021) Percentage of all projects under Achieved. Of all projects under implementation that have one or more implementation to date, 69% have a gender-related indicators in the results mechanism to track gender outcomes. framework Baseline Target Progress Target % projects 72% ≥66% % projects 69% ≥66% (06/2018) (06/2021) (06/2019) (06/2021) Stock-taking and analysis of GBV in the PIC9 Achieved in part. In addition to the stock- and identification of specific WBG activities taking and analysis of GBV completed as on GBV part of the development of the PIC9 RPF, an ASA is being undertaken on preventing, mitigating, and addressing GBV and violence against children in the Pacific in transport projects, with support from the State and Peace Building Fund. 70 FOCUS AREA 3. Protecting incomes and livelihoods Objective 3.1 Strengthened resilience to natural disasters and climate change RPF Objective Indicator Supplementary Progress Indicator Progress to Date WBG Program Disaster and Climate Resilience Disaster and Climate Resilience Disaster and Climate Resilience Disaster and Climate Resilience Direct project beneficiaries On track, with delays. The target in Samoa Ongoing has been exceeded, while progress has - P155257: PREP RMI been delayed in Tonga due partly to the - P154839: PREP Samoa impacts of TC Gita. - P154840: PREP Tonga - P155256: PREP Vanuatu Baseline Target Progress Target Samoa 38,000 75,000 Samoa 82,400 75,000 (11/2016) (11/2020) (02/2019) (11/2020) Tonga 24,000 60,000 Tonga 24,000 60,000 (11/2016) (11/2020) (04/2019) (11/2020) Increased coverage of hazard forecast and On track, with delays. The target in Samoa warning messages to population at risk has been exceeded. In Tonga, designs for the Emergency Operating Centers and Met/National Emergency Management Office Buildings have just been completed. Baseline Target Progress Target Samoa 50% 80% Samoa 84% 80% (11/2016) (11/2020) (02/2019) (11/2020) Tonga 30% 70% Tonga 30% 70% (11/2016) (11/2020) (04/2019) (11/2020) Participating PICs have received payment Achieved. 34 Participating PICs have within a month of the occurrence of a received payment within a month of the covered (insurance) event. occurrence of a covered (insurance) event. 34 Not all four countries have experienced an insured event during the reporting period, but as this is a regional insurance pool, the indicator is reported for the participating countries as a group. 71 Baseline Target Progress Target RMI 0 100% RMI 100% 100% (11/2016) (11/2020) (02/2019) (10/2023) Samoa 0 100% Samoa 100% 100% (11/2016) (11/2020) (02/2019) (10/2020) Tonga 0 100% Tonga 100% 100% (11/2016) (11/2020) (04/2019) (10/2020) Vanuatu 0 100% Vanuatu 100% 100% (11/2016) (11/2020) (04/2019) (11/2020) Multi-hazard early warning systems are On track, with delays. In Samoa, the established and operating existing early warning system and the design of a new multi-hazard system has been assessed. The system will include hydrological stations, a seismic station, and equipment to be procured for the new National Emergency Operations Center (NEOC) building. Construction of the NEOC started in March 2019 with some delays due to heavy rainfall. The Cabinet has decided to move ahead with a new building for the Seismic Operations Center on the current site. A design and supervision contract is expected to be signed by September 2019. Progress has been delayed in Tonga due partly to the impacts of TC Gita. Baseline Target Progress Target Samoa No Yes Samoa Yes Yes (11/2016) (11/2020) (02/2019) (11/2020) Tonga No Yes Tonga No Yes (11/2016) (11/2020) (04/2019) (11/2020) 72 Objective 3.2 Strengthening health systems and addressing NCDs RPF Objective Indicator Supplementary Progress Indicator Progress to Date WBG Program Health Health Health Health Annually completed/updated health public Achieved. In Kiribati and Vanuatu, the Ongoing expenditure analysis used to inform policy annual expenditure trend analysis has been - P166800: RMI Multisectoral Early dialogue completed each year and used to inform Childhood Development Project policy dialogue. Samoa completed a public - Pacific Health Programmatic ASA expenditure review in 2018. - P164382: Samoa Health P4R - DPOs supporting health reforms in Samoa Baseline Target Progress Target and Tonga Kiribati Yes Yes Kiribati Yes Yes (12/2016) (06/2018) (06/2019) (06/2018) Samoa No Yes Samoa No Yes (12/2016) (06/2018) (12/2018) (06/2018) Vanuatu Yes Yes Vanuatu Yes Yes (12/2016) (06/2018) (06/2019) (06/2018) In addition, DPOs in Samoa have supported: (i) the introduction of excise taxes for sugary and salty products to improve health and nutrition outcomes and reduce the incidence of NCDs; (ii) the increase of excise taxes on alcoholic and sweetened beverages and tobacco; (iii) the approval of an Alcohol Control Bill to minimize harmful effects from the consumption and abuse of alcohol; and (iv) improvements to pharmaceutical procurement and inventory management, to increase the efficiency and reduce the costs of procurement, and to help prevent stock-outs and reduce wastage. In Tonga, a DPO has supported the implementation of key fiscal measures to 73 incentivize reduced consumption of alcohol, cigarettes, and fatty, salty, and sugary foods and beverages, and increased consumption of healthy alternatives. This aim was achieved through changes to excise taxes and import duties. Timely and accurate production of Achieved. Financial reporting in Vanuatu monthly, quarterly, and annual financial has been completed as planned. reports to inform annual business plan and budget Baseline Target Progress Target Vanuatu No Yes Vanuatu Yes Yes (12/2016) (06/2018) (06/2019) (06/2018) FOCUS AREA 4. Strengthening the enablers of growth opportunities (macroeconomic management, infrastructure, and addressing knowledge gaps) Objective 4.1 Frameworks to improve fiscal management developed and maintained RPF Objective Indicator Supplementary Progress Indicator Progress to Date WBG Program Improved Macroeconomic Management Improved Macroeconomic Management Improved Macroeconomic Management Improved Macroeconomic Management Kiribati. Revenue Equalization Reserve Achieved. Figures for 2017 suggest that the Ongoing Fund is managed according to the management cost was 0.078% of the - DPO series in Kiribati, Samoa, Tonga, and prevailing market standards with capital value, meaning that the results Tuvalu substantially reduced costs. indicator was met for 2017. Figures for 2018 are still being confirmed. Baseline: Costs of 0.2% (12/2015) Target: Costs of no more than 0.08% (12/2018). Tonga. Improve wagebill affordability Achieved. The FY20 Budget has FY18 actuals (47.9%) and FY19 revised estimates Indicator: Public wagebill as a proportion (51.6%), though the preliminary DPO1 of domestic revenue macro framework has the ratios as 49.3% in Baseline: 57% (06/2014) FY18 and 52.6% in FY19, due to slightly 74 Target: 53% or lower (07/2019) lower domestic revenue estimates in both years compared to official government budget figures. Tuvalu. The oversight of the banking sector Achieved. According to the latest is increased. information from the Pacific Financial Technical Assistance Centre (PFTAC), the Baseline: No regular monitoring reports Public Enterprise Review and Monitoring (01/2015) Unit (PERMU) receives financial Target: Monitoring reports are produced information, most likely including regularly, including information on NPLs, information on NPLs, from the banks on a and tabled to the Cabinet for information quarterly basis, as part of their monitoring (12/2019). role. Cabinet receives a summary prepared by PERMU. An externally engaged Supervision Expert has been working with the Ministry and PERMU on assessing the banks’ governance and risk management since late last year, and will move on to financial risk assessments with the new reporting for June and September quarters. In general, oversight of the banking sector in Tuvalu has increased significantly in the last 12 months with multiple on-site examinations of credit risk, operational risk, and overall governance and strategy. Objective 4.2 Increased access to basic services and improved connective infrastructure RPF Objective Indicator Supplementary Progress Indicator Progress to Date WBG Program Basic Services Basic Services Basic Services Generation Capacity of Renewable Energy On track, with delays. Installation in Tuvalu Ongoing (other than hydropower) constructed has been delayed due to challenges in - P121878: Kiribati Grid Connected Solar PV accessing suitable land for project sites and Project 75 Baseline Target delays to the finalization of the Solar PV - P160910: RMI Sustainable Energy Tuvalu 0.0 MW 1.13 MW Facility contract. The installation of 750 kW Development Project (12/2016) (03/2019) solar power plant with a 1 MWh battery is - P148560: FSM Energy Sector expected to be completed by September Development Project 2020. The closing date of the project and - P165183: Sustainable Energy the target were revised accordingly. Development Project - P144573: Tuvalu Energy Sector Development Project - P150908/P160658: Vanuatu Rural Electrification Projects I and II Number of people provided with access to No progress. The relevant operation Pipeline improved water sources remains in the pipeline. - P162938: South Tarawa Water Supply Project Baseline Target (06/2016) (06/2021) Closed Kiribati 0 62,000 - P112615: Kiribati Adaptation Phase III (32,000 (closed) female) Connective Infrastructure – Aviation Connective Infrastructure – Aviation Connective Infrastructure – Aviation Connective Infrastructure – Aviation Regulatory certification of safety and On track, with delays. In Kiribati, the Chief Ongoing security at project airports Executive Officer position of the Airport - P143408: Samoa Aviation Investment Authority has been filled, which should Project accelerate preparations for achieving - P128939: Tonga Aviation Investment airport certification at Bonriki Tarawa Project airport (TRW). The certification will not be - P128940: Tuvalu Aviation Investment completed before the close of the project, Project as the assessment is not scheduled until - P154149: Vanuatu Aviation Investment December 2019. Project In Samoa, Faleolo airport (APW) was Closed certified by the Civil Aviation Authority of - P128938: Kiribati Aviation Investment New Zealand in March 2000, and the Project airport remains compliant. 76 Fuaʻamotu (TBU) and Vava’u (VAV) airports in Tonga are now both compliant with International Civil Aviation Organization standards. In Tuvalu, challenges have been encountered regarding the runway and apron resurfacing. Since completion of the works, the newly resurfaced runway has experienced defects which need to be addressed. In Vanuatu, certification has been partially achieved for Bauerfield (VLI). Five of six certificates held by Airports Vanuatu Ltd have been recertified, and the aerodrome (Part 139) recertification is ongoing. Baseline Target Progress Target Kiribati No Yes x 2 Kiribati No Yes x 2 (12/2016) airports (05/2019) airports (12/2018) (12/2018) Samoa Yes Yes – Samoa Yes Yes – (07/2016) revalidation (06/2019) revalidation (06/2019) (06/2019) Tonga No Yes x 2 Tonga Yes x 2 Yes x 2 12/2016) airports airports airports (12/2018) (06/2019) (12/2018) Tuvalu No Yes Tuvalu No Yes (10/2016) (09/2017) (05/2019) (09/2017) Vanuatu Yes Yes – Vanuatu Yes – Yes – (12/2016) revalidation partial revalidation (06/2019) (04/2019) (06/2019) 77 Airport terminals/runways upgraded or On track, with delays. In Kiribati, upgrades rehabilitated to Bonriki and Cassidy terminals are 90% complete. In Bonriki, a major item to be rectified is the incorrect sizing of the doors and frames, while in Cassidy, outstanding works include some minor defects to be addressed, installation of the baggage carousel, and final completion works for Aircraft Rescue and Firefighting. The Fua'amotu and Vava'u runways in Tonga have been rehabilitated, while repairs to Bauerfield, Whitegrass, and Pekoa airport pavements in Vanuatu have been completed. Baseline Target Progress Target Kiribati No Both Kiribati 90% Both (Bonriki (12/2016) terminals (Bonriki (05/2019) terminals and upgraded and upgraded Cassidy (12/2018) Cassidy (06/2019) terminals terminals) Vanuatu No Bauerfield Vanuatu Yes Bauerfield (Bauerfield (12/2016) runway (Bauerfield (06/2019) runway runway) rehabilitated runway) rehabilitated (06/2018) (06/2018) Navigation and safety aids fully operational On track, with delays. In Kiribati, installation of navigational aids and airfield ground lighting was installed in May 2019, and they are almost fully operational. In Samoa, lighting and power systems were delivered in June 2019 (5-month delay), and air traffic control equipment is expected to be delivered October 2019 (8- 78 month delay). Delivery times were affected by a global shortage in electronic parts. Further, unknown soil conditions on site caused delays in trenching and installation works for airfield ground lighting works. Navigation and safety aids are 100% operational in Tonga, while in Tuvalu, a fire incident in the navigation aids container resulted in damage to the equipment. The government is considering options for replacing the equipment. In Vanuatu, procurement of navigation aids has not yet commenced due to a shortage of funding under the current project. The government has indicated that it will use its own funds to fill the shortfall. Baseline Target Progress Target Kiribati 10% 100% Kiribati 90% 100% (06/2016) (12/2018) (05/2019) (12/2018) Samoa 0% 100% Samoa 40% 100% (07/2016) (06/2018) (06/2019) (06/2018) Tonga 70% 100% Tonga 100% 100% (12/2016) (12/2018) (06/2019) (12/2018) Tuvalu 75% 100% Tuvalu 10% 100% (10/2016) (06/2017) (05/2019) (06/2017) Vanuatu 0% 100% Vanuatu 0% 100% (12/2016) (06/2017) (04/2019) (06/2017) 79 RPF Objective Indicator Supplementary Progress Indicator Progress to Date WBG Program Connective Infrastructure – Improved Roads Connective Infrastructure – Improved Roads Connective Infrastructure – Improved Roads Connective Infrastructure – Improved Roads Direct project beneficiaries (male/female) On track, with delays. The number of Ongoing direct beneficiaries with improved road and - P126504: Samoa Enhancing the Climate pedestrian access in Vanuatu has been Resilience of West Coast Road approximated based on the percentage of - P145545: Samoa Enhanced Road Access road improvements completed to date. Project - P165782: Samoa Climate Resilient Baseline Target Progress Target Transport project Vanuatu 0 14,000 Vanuatu 6,020 14,000 - P161539: Tonga Climate Resilient (03/2016) (7,000 (05/2019) (06/2021) Transport project female) - P156505: Vanuatu Infrastructure (06/2021) Reconstruction and Improvement Project Closed - P122151: Kiribati Road Reconstruction Project - P096931: Tonga Transport Consolidation Pipeline - P167382: Vanuatu Climate Resilient Transport project Roads rehabilitated (km), rural Achieved. Targets have been met in Kiribati and exceeded in Tonga. Relevant projects closed in June 2018 and December 2018, respectively. In Kiribati, 5.8 km of rural roads were rehabilitated against the revised target of 5.8 km. In Tonga, 40 km of rural roads were rehabilitated against the revised target of 35 km. 80 Baseline Target Progress Target Kiribati 3.48 5.80 Kiribati 5.80 5.80 (06/2016) (06/2018) (06/2018) (06/2018) Tonga 24.5 35 Tonga 40 35 (09/2016) (06/2018) (12/2018) (06/2018) Roads rehabilitated (km), non-rural Achieved. Targets have been met in Kiribati and exceeded in Tonga. Relevant projects closed in June 2018 and December 2018, respectively. In Kiribati, 42.7 km of non-rural roads were rehabilitated against the revised target of 32.7 km. Additional works (mostly in Betio) increased the total length of non-rural road rehabilitated by 10 km. In Tonga, 5 km of non-rural roads were rehabilitated against the target of 5 km. Baselines and targets for Samoa were recalculated as part of a restructuring of the relevant project in May 2018. Baseline Target Progress Target Kiribati 34.8 56 Kiribati 42.7 32.7 (06/2016) (06/2018) (06/2018) (06/2018) Samoa 2 33 Samoa 2.3 2.3 (06/2016) (04/2019) (02/2019) (10/2020) Tonga 5 5 Tonga 5 5 (09/2016) (06/2018) (11/2018) (12/2018) Number of km of roads under regular road Achieved. Targets have been met in Kiribati maintenance and exceeded in Tonga. Relevant projects closed in June 2018 and December 2018, respectively. 81 In Kiribati, the target was revised because some sections of road included at the time of project inception for ongoing maintenance were excluded during project implementation: (i) the Nippon Causeway was under rehabilitation, and (ii) the condition of some sections of the main road north of the Bonriki Airport and some secondary roads was deemed not suitable for inclusion in the routine maintenance contracts. Baseline Target Progress Target Kiribati 34.8 56 Kiribati 48.6 48.6 (06/2016) (06/2018) (06/2018) (06/2018) Tonga 462 462 Tonga 488 462 (09/2016) (06/2018) (11/2018) (12/2018) Bridges rehabilitated to improved On track. Baselines and targets for Samoa standards were recalculated as part of a restructuring of the relevant project in May 2018. The relevant project has completed the reconstruction of the Leone Bridge in 2017. Civil works for Mali’oli’o Bridge started in October 2018. Baseline Target Progress Target Samoa 0 6 Samoa 1 3 (06/2016) (04/2019) (02/2019) (10/2020) Climate-resilient policies, codes and standards for road construction and maintenance developed and adopted by government. 82 Baseline Target Samoa Identified Adopted (FY17) (FY20) RPF Objective Indicator Supplementary Progress Indicator Progress to Date WBG Program Connective Infrastructure – Maritime Connective Infrastructure – Maritime Connective Infrastructure – Maritime Connective Infrastructure – Maritime Regulations in place with improved Number of maritime assets improved for On track, with delays. The Tonga Transport Ongoing monitoring enforcement and compliance safety/resilience/access Sector Consolidation Project (TSCP, closed) - P161382: RMI Maritime Investment mechanisms supported the development of a new Project Transport Sector Policy and Planning - P163922: FSM Maritime Investment Baseline Target Baseline Target Framework, a National Transport Sector Project (06/2016) (06/2021) (06/2016) (06/2021) Strategy, and a Maritime Sector Strategic - P161540: Tuvalu Maritime Investment in Tonga No Yes Tonga 0 3 Development Plan. It also financed a Climate Resilient Operations Tuvalu No Yes Tuvalu 0 3 maritime safety needs assessment for all main ports in Tonga’s outer islands. The Closed ports in Vava’u and Ha’apai were - P096931: Tonga Transport Sector rehabilitated under TSCP, while ports in Consolidation Project Niuas and ‘Eua will be rehabilitated under the new Tonga Climate Resilient Transport Project (approved November 2018). TSCP also provided funds to: (i) finance equipment such as navigational aids and marine safety, maintenance, and environmental protection equipment for all outer islands; and (ii) a safety campaign focused on smaller vessels for fishing and transportation. Meanwhile, implementation of the relevant project in Tuvalu (approved December 2018) is still in the very early stages. 83 Progress Target (06/2019) (06/2021) Tonga Yes Yes Tuvalu No Yes Progress Target (06/2019) (06/2021) Tonga 2 3 Tuvalu 0 3 RPF Objective Indicator Supplementary Progress Indicator Progress to Date WBG Program Connective Infrastructure – ICT Connective Infrastructure – ICT Connective Infrastructure – ICT Connective Infrastructure – ICT Access to broadband Internet Services On track, with delays. The proposed East Ongoing (number of subscribers per 100 people) Micronesia Cable (EMC) system will - P159632: Kiribati Connectivity Project connect Kiribati (Tarawa), FSM (Kosrae- - P130592: FSM Connectivity Project Fixed Fixed Pohnpei), and Nauru with onward - P128904: Samoa Connectivity Project Baseline Target connectivity from Pohnpei to Guam (US) via - P159395: Tuvalu Connectivity Project (06/2016) (06/2021) the HANTRU-1 cable. While Kiribati 2 10 implementation of the EMC cable has been Closed FSM 2 3 delayed, the terms of collaboration - P113184: Tonga Connectivity Project Palau 2 3 between the three countries for the supply, Tuvalu 3 10 installation, and operation of the EMC system have since been agreed, pursuant Mobile Mobile to a Construction and Maintenance Baseline Target Agreement and IRU (International Road (06/2016) (06/2021) Transport Union) Deed signed by the Kiribati 55 60 responsible implementing entities for each FSM 1 35 of the three countries on April 2019. Draft procurement documents for the supply and Palau 1 35 installation of the EMC system have been Tuvalu 30 45 prepared and are being reviewed. In Samoa, the Tui Samoa cable was completed and ready for service in 84 February 2018. Additional spurs to Wallis & Futuna and Fiji (Savusavu) are also ready for service. Operators are reporting a significant increase in the volume of data usage and are now also offering new data plans and prices with increased data. In Tonga, the relevant project closed in July 2018. The project enabled internet access for most of the Tongan population. At project completion: (i) international internet bandwidth increased from a baseline of 37 Mbps to 4,400 Mbps; (ii) access to internet services increased from a baseline of one per 100 people to 50 per 100 people; and (iii) the price of wholesale international capacity link decreased from a baseline of US$495 to US$155. There is no progress to date in Tuvalu as implementation of the relevant project (approved January 2019) is in the very early stages. Reduction in internet wholesale bandwidth On track, with delays. See above. price (international bandwidth cost/Mbps in US$) Baseline Target Progress Target Kiribati 950 <500 Kiribati 700 250 (06/2016) (06/2021) (04/2019) (05/2022) FSM 900 141 FSM 1,800 700 (06/2016) (06/2021) (05/2018) (01/2020) Palau 650 400 Palau Not Not (06/2016) (06/2021) applicable applicable 85 Tuvalu 1,000 <600 Tuvalu None 100 (06/2016) (06/2021) (06/2019) (12/2023) Objective 4.3 Address knowledge gaps RPF Objective Indicator Supplementary Progress Indicator Progress to Date WBG Program Addressing Knowledge Gaps Addressing Knowledge Gaps Addressing Knowledge Gaps Addressing Knowledge Gaps Most recent HIES data available for On track. Kiribati and RMI have Pipeline analyzing poverty in RMI and Kiribati are commenced fieldwork for their 2019/20 - P171380: Statistical Innovation and less than five years old HIES round. It is expected that the new Capacity Building in Kiribati HIES data will be available for poverty - P171377: Statistical Innovation and Baseline Target analysis by the end of CY20. Capacity Building in Tonga Kiribati No Yes - P168122: Statistical Innovation and (06/2016) (06/2021) Capacity Building in the Pacific (SPC) RMI No Yes - P164889: Improving Data Dissemination (06/2016) (06/2021) and Use in Pacific Islands Countries (ASA) Study completed on Outer Island On track. The ASA on spatial development Ongoing challenges, including an examination of issues in PICs is underway. The study will - P166346: A Review of Spatial service delivery, infrastructure, migration, have three main parts. Development Issues in Pacific Island connectivity, etc. Countries (ASA) The first part will be descriptive, analyzing: Baseline Target (i) geography and demographics; (ii) socio- Studies No Yes economic development; (iii) administrative completed (06/2016) (06/2021) and government arrangements and service delivery on the outer islands; (iv) political economy of the outer islands; (v) the drivers of international and inter-island migration and demographic dynamics on the outer islands; and (vi) current spatial development objectives, policies, and approaches in the PICs. 86 The second part will review policy and investment options regarding fostering the livelihoods of outer island populations and achieving countries' development objectives vis-à-vis spatial development. The focus would be on connectivity (air, sea, ICT), service delivery (health, education), infrastructure (roads, maritime, energy, water, climate resilience), livelihoods (opportunities to support incomes and livelihoods on outer islands, labor mobility, cost of living, transfers, and resilience to shocks); and migration (including work on urban management to accommodate internal migration). The third part will present a framework for policymakers in the Pacific to think about spatial development and prioritization and related trade-offs in the context of PICs' fiscal constraints. The main output expected in FY20 will include an overview report, supported by a series of background papers and country studies. 87 ANNEX 4. PROGRESS TOWARD REVISED RPF OBJECTIVES FOCUS AREA 1. Fully exploiting available economic opportunities Objective 1.1. Improved management of oceanic and coastal fisheries supported RPF Objective Indicator Progress to Date WBG Program Management of Fisheries Management of Fisheries Management of Fisheries Purse seine tuna catch in relevant countries encompassed Achieved. To date, 100% of purse seine tuna catch within Ongoing within the VDS 35 of the total annual allocation (%) participating countries’ waters are encompassed within - P151760: PROP RMI the VDS or a compatible system. - P151754: PROP FSM - P165873: Samoa Agriculture and Fisheries Productivity Baseline Target Progress Target and Marketing Project FSM 89% 100% RMI 100% 100% - P164941: Tonga Pathway to Sustainable Oceans (09/2016) (06/2023) (06/2019) (06/2023) - P151780: PROP Tuvalu RMI 90% 100% FSM 100% 100% (09/2016) (09/2020) (06/2019) (09/2020) Pipeline Tuvalu 94% 100% Tuvalu 100% 100% - P165821: PROP Kiribati (09/2016) (06/2023) (06/2019) (06/2023) Number of additional coastal fisheries legally managed by Achieved. The target for Tuvalu has been met and stakeholders in each country, with support from the exceeded ahead of schedule. government Baseline Target Progress Target Tuvalu 0 7 Tuvalu 9 7 (09/2016) (06/2023) (06/2019) (06/2023) 35 The VDS succeeds previous methods to curb overfishing by trading vessel days fishing at sea in places that are subject to the PNA. The indicator covers PIC9 where the PROP is currently being implemented (RMI, FSM, and Tuvalu). 88 Objective 1.2. Increased incomes from agriculture RPF Objective Indicator Progress to Date WBG Program Increased Incomes from Agriculture Increased Incomes from Agriculture Increased Incomes from Agriculture Percentage increase in the value of sales of fruit and Achieved. The target in Samoa was exceeded by Ongoing vegetable growers participating in the Matching Grant completion of the relevant project. Growers participating - P165873: Samoa Agriculture and Fisheries Productivity Program in the Matching Grant Program reported a 68% increase in and Marketing Project the value of fruit and vegetable sales, compared to the Baseline Target target of 40%. A 2018 market survey found that between Closed Samoa 36% 40% 2013 and 2017, the absolute volume of local fruits sold - P115351: Samoa Agriculture Competitiveness and (03/2016) (03/2018) increased by 28%, and the volume of local vegetables sold Enhancement Project increased by 85%. Progress Target Samoa 68% 40% (12/2018) (03/2018) Percentage increase in the value of sales of livestock Achieved. The target in Samoa was exceeded by producers participating in the Matching Grant Program completion of the relevant project. Livestock producers participating in the Matching Grant Program increased the value of their livestock sales by 46%, compared to the target of 30%. Baseline Target Samoa 21% 30% Progress Target (03/2016) (03/2018) Samoa 46% 30% (12/2018) (03/2018) Increased average value of sales of fruit and vegetable No progress. Implementation of the relevant project growers and livestock producers (SAT) (approved July 2019) is in the very early stages. Baseline Target Samoa 3,999 4,400 (07/2019) (06/2023) 89 Objective 1.3. Expanded tourism opportunities RPF Objective Indicator Progress to Date WBG Program Expanded Tourism Opportunities Expanded Tourism Opportunities Expanded Tourism Opportunities Change in tourist (non-resident) international arrivals from On track. The government and private sector in Vanuatu Ongoing China, both air and cruise tourism. have taken up project recommendations to grow the China - 602286: Solomon Island, Vanuatu and Pacific Island market. Targets were already reached halfway through the Tourism (IFC) project, and further steady growth was projected. Baseline Target Baseline Progress Vanuatu 0 8,500 Vanuatu 0 6,154 (2017) (2023) (2017) (2019) Increase in sales revenue from businesses implementing On track. IFC recommendations (US$) Baseline Target Baseline Progress Vanuatu 0 5,000,000 Vanuatu 0 4,988,793 (2017) (2023) (2017) (2019) FOCUS AREA 2. Enhancing access to employment opportunities Objective 2.1 Broadened opportunities for access to labor markets RPF Objective Indicator Progress to Date WBG Program Labor Mobility Labor Mobility Labor Mobility Increase the number of Pacific seasonal workers No progress. Implementation of the relevant ASA (Activity Ongoing participating in the SWP and PLS annually over the RPF Initiation Note approved July 2018) is in the very early - P161541 - Skills and Employment for Tongans period. stages. - P171638 - Expanding Labor Mobility and Social Protection in the Pacific Islands ASA Workers from PICs (excluding Timor-Leste) Baseline Target Closed SWP 4,266 8,532 - P155609: Pacific Labor Mobility Programmatic ASA (2015-16) (2020-21) PLS 0 1,000 (2017) (2020-21) 90 Objective 2.2 Addressing education and skills gap RPF Objective Indicator Progress to Date WBG Program School Readiness and Early Grade Literacy School Readiness and Early Grade Literacy School Readiness and Early Grade Literacy Pilot of school readiness interventions completed Achieved. Pilots of the school readiness interventions were Closed completed in Tonga and Tuvalu. - P145154 - Pacific Early Age Readiness and Learning Baseline Target Baseline Progress Tonga No Yes Tonga No Yes (2016) (2019) (2016) (2019) Tuvalu No Yes Tuvalu No Yes (2016) (2019) (2016) (2019) Pilot of the early grade literacy program completed Achieved. Pilots of the early grade literacy program were completed in Kiribati, Tonga, and Tuvalu. At least 1,600 students were taught with the PEARL reading approach. Baseline Target Baseline Progress Kiribati No Yes Kiribati No Yes (2016) (2019) (2016) (2019) Tonga No Yes Tonga No Yes (2016) (2019) (2016) (2019) Tuvalu No Yes Tuvalu No Yes (2016) (2019) (2016) (2019) Enhanced Skills Development Enhanced Skills Development Enhanced Skills Development Number of beneficiaries enrolled in a certificate-level No progress. Implementation of the relevant project Ongoing qualification (approved August 2018) is in the very early stages. - P161541: Skills and Employment for Tongans Baseline Target Tonga 0 600 (08/2018) (06/2023) 91 Number of beneficiaries in work ready pool No progress. Implementation of the relevant project (approved August 2018) is in the very early stages. Baseline Target Tonga 0 1600 (08/2018) (06/2023) Objective 2.3 Addressing gender inequality RPF Objective Indicator Progress to Date WBG Program Gender Gender Gender Percentage of new IBRD/IDA projects (approved from Achieved. Of 50 IBRD/IDA projects approved from FY17 to Ongoing FY17) in the PIC9 portfolio that are gender-tagged FY19, 40 were gender-tagged. - 603990: SI and PIC WINVest (IFC) Baseline Target Progress Target % projects 72% ≥66% % projects 80% ≥66% (06/2018) (06/2023) (06/2019) (06/2023) Number of people directly benefiting from entities No progress. Implementation of the relevant project is in improved labor policies the very early stages. Baseline Target Progress Target People 0 5,000 People 0 5,000 (2016) (2022) (2016) (2022) FOCUS AREA 3. Protecting incomes and livelihoods Objective 3.1 Strengthened resilience to natural disasters and climate change RPF Objective Indicator Progress to Date WBG Program Disaster and Climate Resilience Disaster and Climate Resilience Disaster and Climate Resilience Direct project beneficiaries On track, with delays. The target in Samoa has been Ongoing exceeded, while progress has been delayed in Tonga due - P155257: PREP RMI partly to the impacts of TC Gita. - P154839: PREP Samoa 92 - P154840: PREP Tonga Baseline Target Progress Target - P155256: PREP Vanuatu RMI 7,000 13,000 Samoa 82,400 75,000 (09/2016) (11/2022) (02/2019) (11/2020) Samoa 38,000 100,000 Tonga 24,000 60,000 (11/2016) (10/2023) (04/2019) (06/2023) Tonga 24,000 60,000 (11/2016) (06/2023) Increased coverage of hazard forecast and warning On track, with delays. The target in Samoa has been messages to population at risk. exceeded. In Tonga, designs for the Emergency Operating Centers and Met/ National Emergency Management Office Buildings have just been completed. Baseline Target Progress Target Samoa 50% 80% Samoa 84% 80% (11/2016) (11/2022) (02/2019) (11/2020) Tonga 30% 70% Tonga 30% 70% (11/2016) (06/2023) (04/2019) (06/2023) Participating PICs have received payment within a month Achieved. 36 Participating PICs have received payment of the occurrence of a covered (insured) event. within a month of the occurrence of a covered (insurance) event. Baseline Target Progress Target (11/2016) (11/2020) RMI 100% 100% RMI 0 100% (02/2019) (06/2023) (11/2016) (06/2023) Samoa 100% 100% Samoa 0 100% (02/2019) (06/2023) (11/2016) (06/2023) Tonga 100% 100% Tonga 0 100% (04/2019) (06/2023) (11/2016) (06/2023) Vanuatu 100% 100% Vanuatu 0 100% (04/2019) (11/2020) (11/2016) (11/2020) 36 Not all four countries have experienced an insured event during the reporting period, but as this is a regional insurance pool, the indicator is reported for the participating countries as a group. 93 Objective 3.2 Strengthening health systems and addressing NCDs RPF Objective Indicator Progress to Date WBG Program Health Health Health Annually completed/updated health public expenditure Achieved. Kiribati and Vanuatu have completed the annual Ongoing analysis used to inform policy dialogue expenditure trend analysis each year and used it to inform - P166800: RMI Multisectoral Early Childhood policy dialogue. Samoa completed a public expenditure Development Project review in 2018. - P166032: Pacific Health Programmatic ASA - P164382: Samoa Health P4R Baseline Target Progress Target - DPOs supporting health reforms in Samoa and Tonga Kiribati Yes Yes Kiribati Yes Yes (12/2016) (06/2018) (06/2019) (06/2018) Samoa No Yes Samoa No Yes (12/2016) (06/2018) (12/2018) (06/2018) Tonga No Yes Tonga Yes Yes (12/2016) (06/2018) (06/2019) (06/2018) Vanuatu Yes Yes Vanuatu Yes Yes (12/2016) (06/2018) (06/2019) (06/2018) In addition, DPOs in Samoa have supported: (i) the introduction of excise taxes for sugary and salty products to improve health and nutrition outcomes and reduce the incidence of NCDs; (ii) the increase of excise taxes on alcoholic and sweetened beverages and tobacco; (iii) the approval of an Alcohol Control Bill to minimize harmful effects from the consumption and abuse of alcohol; and (iv) improvements to pharmaceutical procurement and inventory management, to increase the efficiency and reduce the costs of procurement, and to help prevent stock-outs and reduce wastage. In Tonga, a DPO has supported the implementation of key fiscal measures to incentivize reduced consumption of alcohol, cigarettes, and fatty, salty, and sugary foods and beverages, and increased consumption of healthy 94 alternatives. This result was achieved through changes to excise taxes and import duties. Number of beneficiaries receiving health/nutrition No progress. Implementation of the relevant project in promotion RMI (approved February 2019) is in the very early stages, while the relevant project in Samoa has only been recently Baseline Target approved. RMI 0 TBC (06/2019) Samoa 0 TBC (06/2019) FOCUS AREA 4. Strengthening the enablers of growth opportunities (macroeconomic management, infrastructure, and addressing knowledge gaps) Objective 4.1 Frameworks to improve fiscal management developed and maintained RPF Objective Indicator Progress to Date WBG Program Improved Macroeconomic Management Improved Macroeconomic Management Improved Macroeconomic Management Kiribati. Revenue Equalization Reserve Fund is managed Achieved. Figures for 2017 suggest that the management Ongoing according to the prevailing market standards with cost was 0.078% of the capital value, meaning that the - DPO series in Kiribati, Samoa, Tonga, and Tuvalu substantially reduced costs. results indicator was met for 2017. Figures for 2018 are Baseline: Costs of 0.2% (12/2015) still being confirmed. Target: Costs of no more than 0.08% (12/2018). Samoa. Revenue buoyancy increases from recent On track. Recent data indicates domestic revenue was average levels. 26.4% of GDP in FY18, and domestic revenue is currently Baseline: Average ratio of domestic revenue to GDP = projected to be greater than 27% of GDP in FY19, FY20, 24.8% (FY12-FY16) and FY21. Target: Average domestic revenue to GDP > 26% (FY18- FY21) Tonga. Improve wagebill affordability Achieved. The FY20 Budget has FY18 actuals (47.9%) and Indicator: Public wagebill as a proportion of domestic FY19 revised estimates (51.6%), though the preliminary revenue DPO1 macro framework has the ratios as 49.3% in FY18 Baseline: 57% (06/2014) and 52.6% in FY19, due to slightly lower domestic revenue Target: 53% or lower (07/2019) 95 estimates in both years compared to official government budget figures. Tuvalu. The oversight of the banking sector is increased. Achieved. According to the latest information from PFTAC, Baseline: No regular monitoring reports (01/2015) PERMU receives financial information, most likely including Target: Monitoring reports are produced regularly, information on NPLs, from the banks on a quarterly basis, including information on NPLs, and tabled to the Cabinet as part of their monitoring role. Cabinet receives a for information (12/2019). summary prepared by PERMU. An externally engaged Supervision Expert has been working with the Ministry and PERMU on assessing the banks’ governance and risk management since late last year, and will move on to financial risk assessments with the new reporting for June and September quarters. In general, oversight of the banking sector in Tuvalu has increased significantly in the last 12 months with multiple on-site examinations of credit risk, operational risk, and overall governance and strategy. Improved Access to Financial Services Improved Access to Financial Services Improved Access to Financial Services Number of transactions supported via APP New Zealand– Number of transactions supported via APP New Zealand– Ongoing Tonga Tonga - P585727: Technical Assistance Pacific Payments Project (IFC) Baseline Target Progress Target Tonga 0 7,000 Tonga 16,152 7,000 (07/2016) (06/2022) (07/2016) (06/2022) Number of transactions supported via APP Australia–Tonga Number of transactions supported via APP Australia–Tonga Baseline Target Progress Target Tonga 0 2,000 Tonga 0 2,000 (01/2019) (06/2022) (01/2019) (06/2022) Objective 4.2 Increased access to basic services 96 RPF Objective Indicator Progress to Date WBG Program Basic Services Basic Services Basic Services Revised. Generation capacity of energy constructed or On track, with delays. The target has been exceeded in Ongoing rehabilitated (MW) Kiribati, with 729 kW of PV installed and connected to the - P121878: Kiribati Grid Connected Solar PV Project grid with an estimated energy contribution of 1,165,000 - P160910: RMI Sustainable Energy Development Project kWh over the year. The installation of solar PVs across four - P148560: FSM Energy Sector Development Project sites on the South Tarawa grid network was intended to - P165183: Sustainable Energy Development Project replace diesel with renewable energy, and the end result - P144573: Tuvalu Energy Sector Development Project of 729 kW is equivalent to 8.1% energy from renewables in - P150908/P160658: Vanuatu Rural Electrification Projects the current energy generation mix against an end target of I and II 7%. The Investment Plan for Kiribati’s Scaling Up Renewable Energy Program identified around US$65 million in investments in renewable energy and storage, which will assist Kiribati to achieve its Nationally Determined Contribution and renewable energy targets, build in resilience in the investments, and deliver regulatory frameworks to support renewable energy (ADB is taking the lead on these investments in light of IDA/project count constraints). In RMI, the construction and rehabilitation of conventional generators of total 1 MW capacity are already under implementation in Ebeye. The bidding document for 4 MW solar PV in Majuro was published in September 2019. Implementation of both installations is expected to be completed by December 2022. In FSM, under the Energy Sector Development Project (P148560), (i) conventional generation capacity was increased by 6.2 MW, 32% above the end target, and (ii) renewable energy generation capacity was increased by 0.4 MW, 100% above the end target. 97 Installation in Tuvalu has been delayed due to issues in accessing suitable land for project sites and delays to the finalization of the solar PV facility contract. The installation of a 750 kW solar power plant with a 1 MWh battery is expected to be completed by September 2020. The closing date of the project and the target were revised accordingly. In Vanuatu, VREP I (first phase of the Vanuatu Rural Electrification Project) has already delivered solar home systems to around 16,000 households (28%), making lighting, phone charging, and television accessible. VREP II is under implementation to provide access to better solar home systems and mini-grids capable of supplying electricity for more productive use. The Improved Electricity Access Project (P133701) directly assisted around 2,000 low-income households to connect to the grid and catalyzed the connections of another 2,500 households (combined 8%). The Bank’s contribution to energy sector reform and investments through the Vanuatu National Energy Road Map, together with the above projects, will increase access to electricity for Vanuatu consumers from 27% in 2012 to 85% by 2022. Progress Target Baseline Target Kiribati 729 kW 549 kW Kiribati 0 kW 549 kW (04/2019) (10/2018) (03/2013) (10/2018) RMI 0 5 RMI 0 5 (12/2017) (12/2022) (12/2017) (12/2022) FSM 6.2 12.2 FSM 0.0 12.2 (10/2016) (11/2022) (10/2016) (11/2022) Tuvalu 0.0 0.75 Tuvalu 0.0 0.75 (12/2016) (09/2020) 98 (12/2016) (09/2020) Vanuatu 0.17 4.5 Vanuatu 0.00 4.5 (06/2019) (06/2022) (09/2017) (06/2022) Number of people provided with access to improved water On track. Three planned groundwater abstraction galleries Pipeline sources have been completed in North Tarawa, Kiribati increasing - P162938: South Tarawa Water Supply Project the total supply of freshwater by 22 m3/day. With proper maintenance, the groundwater galleries are expected to Closed be resilient to 60 continuous months of drought, and have - P112615: Kiribati Adaptation Phase III (closed) a design life of 200 years. A follow-up project for South Tarawa is in the pipeline. Baseline Target Progress Target Kiribati 5,000 29,000 Kiribati 12,780 29,000 (06/2016) (06/2021) (12/2018) (06/2021) Objective 4.3 Improved connective infrastructure RPF Objective Indicator Progress to Date WBG Program Connective Infrastructure – Aviation Connective Infrastructure – Aviation Connective Infrastructure – Aviation Regulatory certification of safety and security at project On track, with delays. In Kiribati, the Chief Executive Ongoing airports achieved Officer position of the Airport Authority has been filled, - P143408: Samoa Aviation Investment Project which should accelerate preparations for achieving airport - P128939: Tonga Aviation Investment Project certification at Tarawa airport (TRW). The certification will - P128940: Tuvalu Aviation Investment Project not be completed before the close of the project, as the - P154149: Vanuatu Aviation Investment Project assessment is not scheduled until December 2019. Closed Fuaʻamotu (TBU) and Vava’u (VAV) airports in Tonga are - P128938: Kiribati Aviation Investment Project now both compliant with International Civil Aviation Organization standards. In Tuvalu, challenges have been encountered regarding the runway and apron resurfacing. Since completion of the 99 works, the newly resurfaced runway has experienced defects which need to be addressed. Baseline Target Kiribati No Yes Progress Target (Bonriki (12/2016) (12/2018) Kiribati No Yes Airport – (Bonriki (05/2019) (12/2018) TRW) Airport – Kiribati No Yes TRW) (Cassidy (12/2016) (12/2018) Kiribati No Yes Airport – (Cassidy (05/2019) (12/2018) CXI) Airport – Tonga No Yes CXI) (Fua’amotu (12/2016) (12/2019) Tonga Yes Yes Airport – (Fua’amotu (06/2019) (12/2019) TBU) Airport – Tonga No Yes TBU) (Vava’u (12/2016) (12/2019) Tonga Yes Yes Airport – (Vava’u (06/2019) (12/2019) VAV) Airport – Tuvalu No Yes VAV) (Funafuti (10/2016) (06/2020) Tuvalu No Yes Airport – (Funafuti (05/2019) (06/2020) FUN) Airport – FUN) Regulatory certification of safety and security at project On track, with delays. In Samoa, Faleolo airport (APW) was airports maintained certified by the Civil Aviation Authority of New Zealand in March 2000, and the airport remains compliant. In Vanuatu, certification has been partially achieved for Bauerfield (VLI). Five of six certificates held by Airports Vanuatu Ltd have been recertified, and the aerodrome (Part 139) recertification is ongoing. 100 Baseline Target Progress Target Samoa Yes Yes Samoa Yes Yes (Faleolo (07/2016) (06/2020) (Faleolo (06/2019) (06/2020) Airport - Airport - APW) APW) Vanuatu Yes Yes Vanuatu Yes – Yes (Bauerfield (12/2016) (06/2019) (Bauerfield partial (06/2019) Airport – Airport – (04/2019) VLI) VLI) Airport terminals/runways upgraded or rehabilitated On track, with delays. In Kiribati, upgrades to Bonriki and Cassidy terminals are 90% complete. In Bonriki, a major item to be rectified is the incorrect sizing of the doors and frames, while in Cassidy, outstanding works include some minor defects to be addressed, installation of the baggage carousel, and final completion works for Aircraft Rescue and Firefighting. The Fua'amotu and Vava'u runways in Tonga have been rehabilitated, while repairs to Bauerfield, Whitegrass, and Pekoa airport pavements in Vanuatu have been completed. Baseline Target Progress Target Kiribati No Yes Kiribati 90% Yes (Bonriki (12/2016) (06/2019) (Bonriki (05/2019 (06/2019) Terminal) Terminal) Kiribati No Yes Kiribati 90% Yes (Cassidy (12/2016) (06/2019) (Cassidy (05/2019 (06/2019) Terminal) Terminal) Tonga No Yes Tonga Yes Yes (Fua’amotu (12/2016) (12/2019) (Fua’amotu (06/2019) (12/2019) Runway) Runway) Tonga No Yes Tonga Yes Yes (12/2016) (12/2019) (06/2019 (12/2019) 101 (Vava’u (Vava’u Runway) Runway) Tuvalu No Yes Tuvalu Yes Yes (Funafuti (12/2016) (06/2020) (Funafuti (05/2019) (06/2020) Runway) Runway) Tuvalu No Yes Tuvalu Yes Yes (Funafuti (12/2016) (06/2020) (Funafuti (05/2019) (06/2020) Terminal) Terminal) Vanuatu No Yes Vanuatu Yes Yes (Bauerfield (12/2016) (06/2018) (Bauerfield (06/2019) (06/2018) Runway) Runway) RPF Objective Indicator Progress to Date WBG Program Connective Infrastructure – Improved Roads Connective Infrastructure – Improved Roads Connective Infrastructure – Improved Roads Direct project beneficiaries (male/female) On track, with delays. In Kiribati, direct beneficiaries of the Ongoing relevant project (closed in June 2018) include private car - P126504: Samoa Enhancing the Climate Resilience of users, bus and truck operators, freight handlers, retailers West Coast Road and wholesalers, utility providers, public transport users, - P145545: Samoa Enhanced Road Access Project motorcyclists, cyclists, pedestrians, residents, - P165782: Samoa Climate Resilient Transport project schoolchildren, businesses, and the government. At project - P161539: Tonga Climate Resilient Transport project closure, it was determined that the improved road - P156505: Vanuatu Infrastructure Reconstruction and network is serving 60,936 people (of which 52% is female). Improvement Project The improved condition of South Tarawa's main road network contributed to reduced travel time, increased the Closed overall quality and reliability of travel, improved road - P122151: Kiribati Road Reconstruction Project safety, and improved drainage. - P096931: Tonga Transport Consolidation In Vanuatu, the number of direct beneficiaries with Pipeline improved road and pedestrian access has been - P167382: Vanuatu Climate Resilient Transport project approximated based on the percentage of road improvements completed to date. 102 Baseline Target Progress Target Kiribati 50,100 60,000 Kiribati 60,936 60,000 (07/2017) (06/2018) (06/2018) (06/2018) Vanuatu 0 14,000 Vanuatu 6,020 14,000 (03/2016) (06/2021) (05/2019) (06/2021) Roads constructed or rehabilitated (km) On track, with delays. Targets have been met in Kiribati and are on track with delays in other countries. The relevant project in Kiribati closed in June 2018. In Kiribati, 5.8 km of rural roads were rehabilitated against the revised target of 5.8 km, and 42.7 km of non-rural roads were rehabilitated against the revised target of 32.7 km. Additional works (mostly in Betio) increased the total length of non-rural road rehabilitated by 10 km. In Tonga, 40 km of rural roads were rehabilitated against the revised target of 35 km, and 5 km of non-rural roads were rehabilitated against the target of 5 km under a project which has closed. Baselines and targets for Samoa were recalculated as part of a restructuring of the relevant project in May 2018. The relevant project in Vanuatu remains in the pipeline. Baseline Target Progress Target Kiribati 38.28 38.5 Kiribati 48.5 38.5 (06/2016) (06/2018) (06/2018) (06/2018) Samoa 2.3 32 Samoa 2.3 32 (08/2017) (08/2022) (08/2017) (08/2022) Tonga 29.5 60 Tonga 45 60 (09/2016) (12/2022) (09/2016) (12/2022) Vanuatu 0 65 Vanuatu None 65 (10/2019) (12/2022) (06/2019) (12/2022) 103 Number of km of roads under regular road maintenance Achieved. Targets have been met in Kiribati and exceeded in Tonga. Relevant projects closed in June 2018 and December 2018, respectively. In Kiribati, the target was revised because some sections of road included at the time of project inception for ongoing maintenance were excluded during project implementation: (i) the Nippon Causeway was under rehabilitation, and (ii) the condition of some sections of the main road north of the Bonriki Airport and some secondary roads was deemed not suitable for inclusion in the routine maintenance contracts. Baseline Target Progress Target Kiribati 34.8 56 Kiribati 48.6 48.6 (06/2016) (06/2018) (06/2018) (06/2018) Tonga 462 462 Tonga 488 462 (09/2016) (06/2018) (11/2018) (12/2018) Water crossings constructed/rehabilitated On track. In Samoa, reconstruction of the Leone Bridge was completed in 2017. Civil works for Mali’oli’o Bridge started in October 2018. The relevant project in Vanuatu remains in the pipeline. Baseline Target Progress Target Samoa 1 5 Samoa 1 5 (06/2016) (08/2022) (02/2019) (08/2023) Vanuatu 0 4 Vanuatu None 4 (10/2019) (12/2022) (06/2019) (12/2022) 104 RPF Objective Indicator Progress to Date WBG Program Connective Infrastructure – Maritime Connective Infrastructure – Maritime Connective Infrastructure – Maritime Climate-resilient maritime investments On track, with delays. The TSCP (closed) supported the Ongoing constructed/rehabilitated and operational development of a new Transport Sector Policy and - P161382: RMI Maritime Investment Project Planning Framework, a National Transport Sector Strategy, - P163922: FSM Maritime Investment Project Baseline Target and a Maritime Sector Strategic Development Plan. It also - P161540: Tuvalu Maritime Investment in Climate Tonga 0 100% financed a maritime safety needs assessment for all main Resilient Operations (09/2018) (12/2022) ports in Tonga’s outer islands. The ports in Vava’u and Tuvalu 0% 80% Ha’apai were rehabilitated under TSCP, while ports in (Nanumaga) (01/2019) (01/2023) Niuas and ‘Eua will be rehabilitated under the new Tonga Tuvalu 0% 80% Climate Resilient Transport Project (approved November (Funafuti) (01/2019) (01/2023) 2018). TSCP also provided funds to: (i) finance equipment such as navigational aids and marine safety, maintenance, and environmental protection equipment for all outer islands; and (ii) a safety campaign focused on smaller vessels for fishing and transportation. Meanwhile, implementation of the relevant project in Tuvalu (approved December 2018) is still in the very early stages. Progress Target (06/2019) (06/2021) Tonga 2 3 Tuvalu 0% 100% (Nanumaga) Tuvalu 0% 100% (Funafuti) RPF Objective Indicator Progress to Date WBG Program Connective Infrastructure – ICT Connective Infrastructure – ICT Connective Infrastructure – ICT Increased access to internet services (number of On track. The proposed EMC system will connect Kiribati Ongoing subscribers per 100 people) (Tarawa), FSM (Kosrae-Pohnpei), and Nauru with onward - P159632: Kiribati Connectivity Project 105 connectivity from Pohnpei to Guam (US) via the HANTRU-1 - P130592: FSM Connectivity Project cable. While implementation of the EMC cable has been - P128904: Samoa Connectivity Project delayed, the terms of collaboration between the three - P159395: Tuvalu Connectivity Project countries for the supply, installation, and operation of the EMC system have since been agreed, pursuant to a Closed Construction and Maintenance Agreement and IRU Deed - P113184: Tonga Connectivity Project signed by the responsible implementing entities for each of the three countries on April 2019. Draft procurement documents for the supply and installation of the EMC system have been prepared and are being reviewed. In Samoa, targets have been exceeded across all indicators. To date: (i) 1,385 km of cable has been built against a target of 1,300 km; (ii) access to internet services increased from a baseline of 27 per 100 people to 60 per 100 people, against a target of 55; and (iii) the price of wholesale international capacity link decreased from a baseline of US$1,500 to US$107. Operators are reporting a significant increase in the volume of data usage and are now also offering new data plans and prices with increased data. In Tonga, the relevant project closed in July 2018. The project enabled internet access for most of the Tongan population. At project completion: (i) international internet bandwidth increased from a baseline of 37 Mbps to 4,400 Mbps; (ii) access to internet services increased from a baseline of one per 100 people to 50 per 100 people; and (iii) the price of wholesale international capacity link decreased from a baseline of US$495 to US$155. There is no progress to date in Tuvalu as implementation of the relevant project (approved January 2019) is in the very early stages. 106 Baseline Target Progress Target Kiribati 15 45 Kiribati 89 45 (12/2016) (05/2022) (04/2019) (05/2022) FSM 2.8 40 FSM 2.8 40 (05/2018) (01/2020) (05/2018) (01/2020) Samoa 27 55 Samoa 60 55 (06/2015) (07/2020) (03/2019) (07/2020) Tonga 25 40 Tonga 50 40 (08/2016) (07/2018) (06/2018) (07/2018) Tuvalu 2,800 3,500 Tuvalu None 3,500 (10/2018) (11/2021) (06/2019) (11/2021) Reduced internet wholesale bandwidth price (US$/Mbps) On track. See above. Baseline Target Progress Target Kiribati 700 250 Kiribati 700 250 (12/2016) (05/2022) (04/2019) (05/2022) FSM 1,800 700 FSM 1,800 700 (05/2018) (01/2020) (05/2018) (01/2020) Samoa 1,500 400 Samoa 107 400 (06/2015) (07/2020) (03/2019) (07/2020) Tonga 495 150 Tonga 155 150 (08/2016) (07/2018) (06/2018) (07/2018) Tuvalu 750 350 Tuvalu None 350 (10/2018) (12/2021) (06/2019) (12/2021) 107 Objective 4.4 Support closing of gaps in poverty data RPF Objective Indicator Progress to Date WBG Program Addressing Knowledge Gaps Addressing Knowledge Gaps Addressing Knowledge Gaps Most recent HIES data available for poverty analysis in PIC9 On track. Kiribati and RMI have commenced fieldwork for Pipeline are less than five years old. their 2019/20 HIES round. It is expected that the new HIES - P171380: Statistical Innovation and Capacity Building in data will be available for poverty analysis by the end of Kiribati Years since CY20. - P171377: Statistical Innovation and Capacity Building in completion Target Tonga Latest HIES of latest next HIES - P168122: Statistical Innovation and Capacity Building in HIES the Pacific (SPC) FSM 2013/14 5 2021/22 - P164889: Improving Data Dissemination and Use in Kiribati 2006 13 2019/20 Pacific Islands Countries (ASA) RMI 2002 17 2019/20 Samoa 2018/19 0 TBC Tonga 2015/16 3 2020/21 Tuvalu 2015/16 3 2020/21 Vanuatu 2010 9 2019/20 108 ANNEX 5. NATURAL DISASTERS THAT OCCURRED PRIOR TO AND DURING THE RPF PERIOD NATURAL DISASTERS OVER TIME Pre-RPF FY17 FY18 FY19 Kiribati — — — — RMI Severe droughts—2013 and 2016 — — — Affected about 50% of the population. FSM Typhoon Maysak—2015 — Tropical Depression Jelawat— Typhoon Wutip—February 2019 Caused damages estimated at about March 2018 Chuuk, Yap Islands 3.5% of GDP. Damage to infrastructure and the Costs of emergency needs and agricultural sector. damage to infrastructure were estimated at US$2 million as of April 2019. 106 homes were lost. Nauru — — — — Palau Typhoon Bopha—2012 — — — 92 homes were destroyed while 59 others sustained severe damage. Total damage amounted to US$10.1 million with repair costs estimated at US$15–20 million. Super Typhoon Haiyan—2013 Samoa Earthquake and tsunami—2009 — TC Gita—February 2018 — 143 reported deaths and an Damage was limited. At least 233 estimated 5,274 people became people sought refuge in emergency homeless. Direct damages and shelters. An estimated 10 million economic losses were estimated at Samoan tala (US$3.7 million) in US$124 million (equivalent to more damages to the power grid. Negative than one-fifth of the country’s GDP). impact on economic growth estimated to be about 0.1 percentage point. 109 NATURAL DISASTERS OVER TIME Pre-RPF FY17 FY18 FY19 TC Evan—2012 14 lives lost and over 7,500 people displaced. Crops decimated, affecting thousands of farmers. The total economic loss was estimated to exceed US$210 million (about 30% of GDP). Tonga TC Ian—2014 — TC Gita—February 2018 — Destroyed almost 1,000 homes and Affected almost 80% of the buildings in the Ha’apai island group. population. The total economic value of the effects caused by TC Gita TC Ula—December 2015 to January amounted to approximately T$356.1 2016 million (US$164.1 million), which is equivalent to 37.8% of the nominal GDP in Tonga. Figures released by the National Emergency Management Office indicate 4,451 houses were damaged and destroyed in Tongatapu, and 257 in ‘Eua, for a total of 4,708 houses damaged or destroyed. Approximately 4,500 people sought refuge in evacuation centers. Tuvalu TC Pam—2015 — — — Large-scale damage of houses, agriculture, and livestock: 90% of crops were damaged in Nui and Nukufetau. Nanumanga suffered the worst damage of the three northern islands, with 60 to 100 houses flooded and damage to the health facility. 110 NATURAL DISASTERS OVER TIME Pre-RPF FY17 FY18 FY19 TC Ula—December 2015 to January 2016 Vanuatu TC Pam—2015 TC Donna—May 2017 Ambae: Mount Manaro Volcanic TC Oma—February 2019 Extensive damage. 70% of 1,000 people and 180 households Eruption—September 2017 The February situation report population affected, 11 lives lost, affected. Destructive rain and heavy More than 7,000 people were indicated that 11,000 were in areas 66000 homes lost, economic winds caused significant damage. relocated to 14 evacuation centers, exposed to wind speeds > 90 km per damages equivalent to two-thirds of all 11,000 residents of Ambae island hour, while the locales of Torba, GDP across multiple sectors. Net were evacuated. Samna, and Malmapa saw flash effect on account deficit was flooding and rain damage to homes approximately 25%. Tourism and Ambae: Mount Mona Volcanic and crops. 500 people were agricultural output declined sharply Eruption—March 2018 evacuated from Samna. in 2015. 11,000 residents evacuated, water supply contaminated, school roof Southeast Ambrym Volcano destroyed, many crops (and Activity—Ongoing. Alert level 2 incomes) destroyed, landslides cut (March 2019) likely to remain in off road access. Ambae population effect with ongoing volcanic activity. now dispersed; many relocated to 70 families moved in December semi-permanent homes along the 2018. adjacent Maewo coast. Maewo fisheries resources under stress with the rapid doubling of the Maewo population and Ambae agricultural output ceasing. 111 ANNEX 6. COUNTRY PROGRAMS OF IDA-ELIGIBLE PIC9 COUNTRIES Republic of Kiribati Forward Pipeline as of November 2019 Project Product Project name no. line P169179 Kiribati Sixth Economic Reform Development Policy Operation DPLa P162938 South Tarawa Water Supply Project IPF P171380 Statistical Innovation and Capacity Building in Kiribati IPF P165821 Kiribati Pacific Islands Regional Oceanscape Program IPF P165838 Kiribati Outer Islands Transport Infrastructure Investment Project IPF a Development Policy Loan. Active Portfolio Project Product Project name no. line P159632 Kiribati Connectivity Project IPF P167263 Kiribati Fifth Economic Reform Development Policy Operation DPL Republic of the Marshall Islands (RMI) Forward Pipeline as of November 2019 Project Product Project name no. line P172014 RMI Pacific Resilience Project II IPF P171517 Digital RMI IPF P171924 RMI Education and Skills Strengthening Project IPF Active Portfolio Project Product Project name no. line P160910 RMI Sustainable Energy Development Project IPF P151760 RMI Pacific Islands Regional Oceanscape Program IPF P160096 RMI Pacific Resilience Program II IPF P163131 RMI Public Financial Management Improvement Project IPF P166800 RMI Multisectoral Early Childhood Education Project IPF P161382 RMI Maritime Investment Project IPF P155257 RMI Pacific Resilience Program IPF Federated States of Micronesia (FSM) Forward Pipeline as of November 2019 Project Product Project name no. line P170718 Digital FSM IPF P172225 FSM Climate Resilient Roads Project IPF Active Portfolio Project Product Project name no. line P130592 FSM Connectivity Project IPF P165183 FSM Sustainable Energy Development and Access Project IPF P151754 FSM Pacific Islands Regional Oceanscape Program IPF 112 Project Product Project name no. line P161969 FSM Public Financial Management Improvement Project IPF P163922 FSM Maritime Investment Project IPF Independent State of Samoa Forward Pipeline as of November 2019 Project Product Project name no. line P171764 Samoa First Resilience and Economic Reform Development Policy Operation DPL P164382 Samoa Health System Strengthening Program P4R Active Portfolio Project Product Project name no. line P165928 Samoa Second Resilience Development Policy Operation with a Cat-DDO DPL P165873 Samoa Agriculture and Fisheries Productivity and Marketing Project IPF P128904 Samoa Connectivity Project IPF P126596 Samoa Enhancing Climate Resilience of Coastal Communities IPF P126504 Samoa Enhancing Climate Resilience of West Coast Road IPF P143408 Samoa Aviation Investment Project IPF P145545 Samoa Enhanced Road Access Project IPF P165782 Samoa Climate Resilient Transport Project IPF P154839 Samoa Pacific Resilience Program IPF Kingdom of Tonga Forward Pipeline as of November 2019 Project Product Project name no. line P171071 Tonga First Resilience Development Policy Operation DPL P171377 Statistical Innovation and Capacity Building in Tonga IPF Active Portfolio Project Product Project name no. line P159263 Tonga Third Inclusive Growth Development Policy Operation DPL P154943 Tonga Digital Government Support Project IPF P164941 Tongafish Pathways to Sustainable Oceans Project IPF P161541 Skills and Employment for Tongans IPF P128939 Tonga Aviation Investment Project IPF P161539 Tonga Climate Resilient Transport Project IPF P154840 Tonga Pacific Resilience Program IPF P156334 Tonga Pacific Resilience Program IPF Tuvalu Forward Pipeline as of November 2019 Project Product Project name no. line P170558 Tuvalu First Resilience Development Policy Operation with a Cat-DDO DPL P171681 Tuvalu Learning Project IPF 113 Active Portfolio Project Product Project name no. line P159395 Tuvalu Telecoms and ICT Development Project IPF P144573 Tuvalu Energy Sector Development Project IPF P151780 Tuvalu Pacific Islands Regional Oceanscape Program IPF P128940 Tuvalu Aviation Investment Project IPF P161540 Tuvalu Maritime Investment in Climate-Resilient Transport Project IPF Republic of Vanuatu Forward Pipeline as of November 2019 Project Product Project name no. line P168749 Vanuatu Disaster Risk Management Development Policy Grant with Cat-DDO DPL P167382 Vanuatu Climate Resilient Transport Project IPF Active Portfolio Project Product Project name no. line P160658 Vanuatu Rural Electrification Project Stage II IPF P154149 Vanuatu Aviation Investment Project IPF P155256 Vanuatu Pacific Resilience Program IPF P156505 Vanuatu Reconstruction Project IPF Pacific Islands (Regional) Forward Pipeline as of November 2019 Project Product Project name no. line P168122 Statistical Innovation and Capacity Building in the Pacific IPF Active Portfolio Project Product Project name no. line P148238 Pacific Regional ICT Regulatory Development Project IPF P098423 Pacific Islands GEF (Global Environment Facility) Sustainable Energy Finance IPF P152653 Pacific Islands Sustainable Energy Industry Development IPF P131655 Pacific Islands Regional Oceanscape Program IPF P153429 Pacific Islands Regional Oceanscape Program IPF P147839 Pacific Resilience Program SPC IPF P163699 Pacific Resilience Program SPC II IPF P161533 PCRAFI: Disaster Risk Finance IPF P145057 Pacific Aviation Safety Office Reform IPF 114