Asian Development
pp. 55-56 · Read in the full issue
Tradewinds
Asian Development Bank’s $l50 million for Islands
As we enter the new decade of the 80s, PIM presents a review of the work in the South Pacific in the 70s decade of the Asian Development Bank which is playing an important part in the development of the Third World in Asia and the Pacific. With Head quarters in the Philippines' capital of Manila, the ADB provides a welcome source of finance for development projects in the South Pacific Islands, some of which also benefit from aid given by the World Bank. Like the World Bank, the ADB gives loans at very low interest rates to developing member countries, the 34 loans listed below being in some cases on terms it would be impossible to obtain elsewhere. Seven of the South Pacific Island countries are develop ing member countries of the ADB.
Fiji, Kiribati, Papua New
the Solomon Islands, Tonga and Western Samoa have, between them, been
granted loans totalling
U 55150.2 million by the Asian Development Bank (ADB) to finance development projects.
There are 34 loans, of which
amounting to
(U 5596.34 million are on very favourable terms a 40-year repayment period including a 10-year grace period and a ser vice charge of only 1% a year. ■ All these countries, plus the Cook Islands, are termed Developing Member Coun tries. The Cooks also receives taid valued at US$9l 000 but (this is in technical assistance
only.
I Ten of the loans are for pub lic utilities (41.2%), nine for transport and communications
eight for industry
Including development banks 8(15.6%) and seven for agricul ture and agronomy (15%). In addition, the ADB has also ap proved the spending of US$5 329 000 for technical as sistance for 44 projects in the six countries, plus the US$9O 000 for the Cook Islands’ National Develop
ment Corporation.
Another grant of US$535 900, bringing the grand total of loans and grants to US$5 420.3 million, has been approved for technical as sistance for regional projects including training programmes on development banking and industrial and agricultural sur veys. Approval dates for all the amounts are from 1969 to 1979.
Ten of the 34 loans, totalling US$3O.5 million were made between 1969 and 1974, and the rest, 24 worth U 55119.7 million, since January, 1975, so that the ADB’s lending to the South Pacific countries has quadrupled in less than five years. Of the 44 grants for tech nical assistance, 30 (U 553.92 million) were provided since January, 1975, and 14 (US$l.5 million) in the previous six years.
The loans for 1979 up to Sep tember were, US$2 million to the Solomon Islands Develop ment Bank, U 553.45 million to Western Samoa for the second power project, US$7 million to Fiji for the Suva Port exten sions and U 5512.25 million to Papua New Guinea for the
Upper Warangoi hydropower
project. The Bank was hoping to approve another loan in 1979 worth US$l.l million to
Tonga to finance several pro
jects.
Technical assistance in 1979 consists of US 150 000 to Papua New Guinea for the Lae port development, US$7O 000 for a PNG electricity tariff review, US$99 000 to Fiji for forestry development, US$l3O 000 for the Solomon Islands Develop ment Bank and US$59 000 to Western Samoa for a forest utilisation and replanting pro ject plus US$7O 000 for tariff study and revaluation of assets.
The agricultural survey for the region, which was com pleted last July, was the first of its kind in the South Pacific and will be followed by a simi lar study for the industrial sec tor.
Six of the loans were for development banks, underlin ing the ADB’s aim to help local financial institutions to aid small private businesses and enterprises. The grants for technical assistance for development banks totalled 13 valued at US$l.4 million and related to the Cook Islands, Fiji, Papua New Guinea, the Solomons, Tonga and Western Samoa. As a result of ADB as sistance, three new develop ment banks, in Western Samoa, Tonga and the Solo mons have been established.
Through its loans to development banks, the ADB indirectly assists small
development projects through
the sub-loans, the average size of which is US$9lOO with a re cord low sub-loan of US$lB.
(Over)
ADB loans help hydro schemes like this one in PNG.
The ADB carried out in 1978 a review of methods of aiding the smallest institutions in the South Pacific Islands, probably in response to a request from the South Pacific Commission which, a few years ago, was asked by the SP Conference to
explore the possibilities of
obtaining very small loans for small countries. The SPC drew a blank until the ADB, after the 1978 review, decided on a new kind of loan, a multi-project loan to a South Pacific member country which could then finance over a period several
small public sector projects.
The first such loan is expected to be for Tonga for US$l 100 000.
The loan approvals to the six countries are: „...
Fiji, power expansion, including the Monasavu hydro-e ectric project on V.t, Levu US$2O.9 mil ton, Fiji Development Bank US$2 mi ion; Suva Port US$7 ml l0n ; Kiribati, new causeway US$l.75 million.
Papua New Guinea,
Development Bank (two loans) US$ll.5 million; roads US$9.B million; water supply (two loans) US$lB.9 million; East Sepik rural development U 557.74 million; provincial mini-hydropower US$2.7 million; Highlands road im provement US$l5 million; Upper Warangoi hydropower (two loans) U 5512.25 million, Solomon Islands, beef cattle development U 553.57 million; fisheries US$3.6 million; Honiara Port US$2.O3 million; Development Bank US$2 million, Tonga, telecommunications US$l.3 million; small indus tries centre US$37O 000; Development Bank US$l.5 million.
Western Samoa, Faleolo Airport and road (two loans) us £ 296 million; beef cattle ilo( farm us s33o 000; tele £ommunications US $2.6 miuion; power (three loans) uss7 15 m ini on; Develop ment Bank ((hree loans) ussB million; coconut oil mill U 552.25 million; WSTEC agricultural development US$3 million.