Financing Pacific Governments for Pacific Development
The small Pacific Island Countries (PICs) face unique constraints which pose public financing challenges beyond those faced by other small island developing states. The PICs also face frequent natural disasters and climate-related impacts which hav...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/910001512645436638/Financing-Pacific-governments-for-Pacific-development http://hdl.handle.net/10986/29027 |
| Summary: | The small Pacific Island Countries
(PICs) face unique constraints which pose public financing
challenges beyond those faced by other small island
developing states. The PICs also face frequent natural
disasters and climate-related impacts which have destructive
effects on livelihoods and the capital stock. Further
compounding these challenges, the process of accessing
finance from development partners after a disaster can be
lengthy, difficult, and uncertain, the resulting allocation
of resources across projects and sectors may not be optimal,
and the overall envelope of available finance is often
insufficient to return the physical capital stock to its
pre-disaster level. This paper provides a quantitative
assessment of the outlook for government finances in the
PICs over the next 25 years. Section one gives introduction.
Section two assesses current public expenditure and revenue
trends in the PICs and presents a range of scenarios for the
evolution of government finances through to 2040. Section
three examines longer-term prospects for meeting these
financing needs, including via official development
assistance, trust fund flows, and debt. Section four
considers how the PICs’ capacity to meet their financing
needs will be affected by the extent to which they take
advantage of the revenue- and growth-enhancing opportunities
described in the other Pacific possible background papers.
Section five examines whether there is scope to improve the
modalities, terms, and timing of aid delivery, including in
response to natural disaster. Development assistance
currently plays a key role in supporting public service
delivery in the Pacific, and this role is likely to remain
important over the next 25 years: working together to ensure
that aid is provided as efficiently as possible is therefore
of paramount importance. Due to the region’s high and
increasing exposure to external shocks, the development of
more effective financial risk management instruments will
also be critical. This paper examines each of these areas of
financial collaboration. |
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