KOROR — The Asian Development Bank (ADB) has approved a $30 million policy-based loan to help Palau’s economy rebound from the COVID-19 pandemic under the Recovery through Improved Systems and Expenditure Support Program.
“The second and final subprogram of this policy-based operation will help restore Palau to a sustainable fiscal path that it was on before the pandemic hit,” said ADB Public Sector Economist and Program Team Leader Rommel Rabanal. “Over the medium to longer term, the reforms under this program will promote more sustained and equitable growth in Palau’s tourism-driven economy.”
The subprogram 2 supports Palau’s efforts to implement a suite of reforms, anchored on recently adopted landmark legislations establishing an overarching fiscal responsibility framework and pursuing a comprehensive tax reform. These reforms will help safeguard fiscal sustainability during Palau’s recovery from the impacts of COVID-19.
The subprogram also has a strong gender equality focus through its planned rollout of tax reform, which ensures that women have access to tailored information and services that will help them harness expanded business opportunities. It will also modernize and streamline processes for registering new companies and help reduce the financial and time costs of starting a business.
The program builds on previous ADB policy-based operations and public sector management work in Palau, and supports strengthening governance and institutional capacity, one of ADB’s priorities under Strategy 2030. The program was developed in coordination with the International Monetary Fund to ensure macroeconomic stability during the pandemic.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.