Communities Will Improve Health And Education Services In Micronesia

ADB News Release No. 1161/00, 20 December, 2000

MANILA, PHILIPPINES (20 December 2000) - Communities will be heavily involved in planning and delivering health and education services in the Federated States of Micronesia in a project for which the Asian Development Bank today approved an US$8 million loan. As a result, the Basic Social Services Project will provide more effective, accountable and cost-efficient services to poor households and vulnerable groups.

Micronesia's health and education indicators are declining despite the resources allocated to these sectors. The winding down of the Compact of Free Association with the United States has already led to an outflow of expatriates, a decrease in resources, and a deterioration of social services. The challenge is to make more effective use of resources, which may fall further.

The project will have two phases. The first focuses on building up capacity and strengthening institutions at national and state levels. This will enable the health and education departments to carry out organizational changes and reforms.

In the health sector, this will include extending a limited health insurance scheme to provide broader and universal coverage and a component for training health workers. Benefits include better access to quality health care services, more cost efficiency through an effective health information system, and a stronger national drug and medical supply management, including procurement and distribution.

In education, reforms will cover employment conditions for, and the inspection of, teachers. Upgrading teachers is expected to result in better-run schools, a more relevant curriculum and better-achieving schoolchildren, especially at primary level. The second phase will involve specific investments, such as in textbooks and in school and hospital maintenance schemes. It will, however, be linked to successful reforms achieved in phase one.

"Such improvements should lead to better employment opportunities and higher incomes for local residents," notes ADB project specialist Maryse Dugue. "The project addresses all major institutional issues and will have a significant overall impact on the population."

The total project cost is estimated at US$11.7 million. The ADB loan will come from its concessional Asian Development Fund and is repayable over 32 years, including a grace period of eight years. The interest rate will be one percent per annum during the grace period and 1.5 percent per annum thereafter. The executing agency will be the Department of Health, Education and Social Affairs. The project is due for completion by end December 2006.

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