TONGA GETTING ADB FUNDS TO IMPLEMENT ECONOMIC REFORMS, IMPROVE SERVICES

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MANILA, Philippines (June 2, 2002 - PINA Nius Online)---The Asian Development Bank (ADB) has approved a US$ 10 million loan to Tonga for a new Economic and Public Sector Reform Program.

The project is designed to achieve a sustainable fiscal balance and improve the delivery of public services, a bank news release said.

In addition, the bank will provide a US$ 700,000 technical assistance grant to help build a performance-based public service, the news release said

"Low economic and employment growth rates and a worsening fiscal situation have set back the government's goal of improving living standards for this Pacific island nation," the ADB announced.

"They have also hindered the flow of private sector investment into the country."

Peter King, director of the bank's Pacific Operations Division, was quoted as saying:

"The successful implementation of these reforms will require considerable political will as it involves the delegation of greater management responsibilities to government departments and the creation of a transparent, consistent, and responsive policy environment."

The 24-year Asian Development Bank loan will come from its concessional Asian Development Fund. It will have an interest rate of 1 percent per annum during an eight-year grace period, and 1.5 per cent after that. 

The Ministry of Finance will be the executing agency for the program, which will be implemented over 20 months.

Pacific Islands News Association (PINA) Website: http://www.pinanius.org 

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