Permanent Finance Secretary Jefferson Barton, who met with ADB President Haruhiko Kuroda in Uzbekistan last month at the annual ADB meeting, recognized the improved relations with ADB, emphasized that the Marshall Islands is keeping current with loan repayments, and said the Marshall Islands needs ADB’s support of reforms recommended by cabinet advisory groups to stabilize the government’s financial situation.
A series of loans and grants for the Marshall Islands worth nearly $20 million are undergoing review at the Manila-based bank, Barton said.
“We are very pleased with improvements in our relationship with the Bank,” Barton said.
He noted that ADB loans and grants now in the review and approval process are the first large-scale ADB involvement in the Marshall Islands since 2002. ADB had halted loans in recent years when the Marshall Islands had defaulted on its loan repayment schedule.
ADB is considering support for a series of grants and loans to help stabilize the financially troubled government power utility, expand alternative energy usage, assist public sector reforms, and support a national census.
Barton said a cabinet-appointed Comprehensive Adjustment Program, or CAP, advisory group report issued last year “contains home grown reform measures which are all basically stating that the government’s current fiscal structure is unsustainable, and that the government must immediately implement some government reforms to stem any potential government fiscal crisis from happening.”
A companion Tax Commission Report “lays out recommendations on tax aimed at improving revenue collection, and streamlining administrative processes to make it better for all tax payers including the private sector,” Barton said.
“RMI would like to engage and encourage ADB to provide important support toward these two important government initiatives,” the Finance Secretary said.
As part of the CAP recommendation, the government for the first time since 2001, has reduced the government salary cost by five percent, but more fiscal adjustments are needed, Barton said.
“As the RMI government will soon embark on implementing some of the fiscal and structural reform measures recommended in the CAP report and in the Tax Commission report, it is very important that the Bank’s close involvement, support and assistance to the government are provided on a timely basis so that the RMI would be able to withstand any challenges that might happen along the way that could have the potential to either derail the reform process, or prevent it from succeeding,” Barton said.
