Japan, ADB assisting Micronesia in improving budget management
18 Sep '07
2 min read
The Government of Japan and the Asian Development Bank (ADB) will assist the Federated States of Micronesia in improving budget and planning processes as part of the overall objective of achieving self-sustaining economic growth.
The Strengthening Economic Management and Planning Project will be implemented over a three-year period at a budget of $475,000. The Japan Special Fund will provide a $400,000 grant through ADB to support the project. The Federated States of Micronesia will provide in kind support equivalent to the balance.
The assistance was in response to the request made by the Federated States of Micronesia to ADB to help national and state governments strengthen their execution of performance-based budgeting under the Strategic Development Plan 2004-2023.
The Strategic Development Plan identifies priority activities needed to generate the growth that will enable the Federated States of Micronesia achieve self-sustainability by 2023. The ADB-backed assistance will address the problematic issues of governance and capacity in financing and implementing the Strategic Development Plan by developing long-term sustainable transition plans, boosting capacity in performance budgeting and linking budgeting and planning processes.
The Federated States of Micronesia, a federation of four states in the Pacific region, relies heavily on foreign aid, particularly from grants provided by the United States government under the Compact of Free Association approved in 1986. Overall public expenditure accounts for around 60% of gross domestic product, there is limited private sector activity and the export base is narrow.
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