Kiribati Economic Reform Operation

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The development objective of the First Economic Reform Development Policy Operation Project for Kiribati is to support the Government of Kiribati in strengthening public services, while improving fiscal sustainability. This operation supports both themes of the country assistance strategy (CAS): (i) building resilience against external shocks and (ii) mitigating economic isolation by encouraging regional and global integration. This operation also supports actions under three areas of the government's economic reform plan. Under "increasing revenue" the operation will support the implementation of a national fisheries strategy. This is expected to improve revenue performance from fishing license sales. Under "improving the management of public assets and liabilities", the operation will support the introduction of legislation to improve the governance and management of state-owned enterprises (SOEs), which have recently been a drain on fiscal resources. The operation will also support the introduction of a debt policy to strengthen decision making processes and avoid unnecessary recourse to expensive commercial borrowing, as has occurred recently. Under "expanding private sector opportunities", the operation will support the introduction of legislation to liberalize the telecommunications sector, improving the business environment through lower cost and higher quality telecommunication services, and the introduction of private participation into the operation of the Otintaai hotel, potentially spurring further development of the nascent tourism industry.