ADB helps Palau recover from the consequences of COVID-19

The Asian Development Bank (ADB) has approved a $30 million policy-based loan to help Palau’s economy recover from the COVID-19 pandemic, under the Recovery through Improved Systems and Spending Support Program.

“The second and final subprogram of this policy-based operation will help Palau return to the sustainable fiscal path it was on before the pandemic,” said ADB Public Sector Economist and Program Team Leader Rommel Rabanal.

“In the medium to long term, the reforms in this program will promote more sustained and equitable growth in Palau’s tourism-driven economy.”

Subprogram 2 supports Palau’s efforts to implement a set of reforms, anchored in recently adopted landmark legislation that establishes a general framework for fiscal responsibility and pursues comprehensive tax reform.

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These reforms will help safeguard fiscal sustainability as Palau recovers from the impacts of COVID-19.

The subprogram also focuses on gender equality through the planned rollout of tax reform, which ensures women’s access to tailored information and services that will help them take advantage of increased business opportunities.

It will also streamline and streamline new business registration processes and help reduce the financial and time costs of starting a business.

The program builds on ADB’s previous 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.