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Annex 9. Solomon Islands: Applying Selectivity Filters to SCD Priorities to Design the CPF Program

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Document of The World Bank Group FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 122600-SB INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL FINANCE CORPORATION AND MULTILATERAL INVESTMENT GUARANTEE AGENCY Public Disclosure Authorized COUNTRY PARTNERSHIP FRAMEWORK FOR SOLOMON ISLANDS FOR THE PERIOD FY2018–FY2023 June 26, 2018 Public Disclosure Authorized Papua New Guinea and Pacific Islands Country Management Unit East Asia and Pacific Region The International Finance Corporation East Asia and Pacific Region The Multilateral Investment Guarantee Agency This document has a restricted distribution and may be used by recipients only in the performance Public Disclosure Authorized of their official duties. Its contents may not otherwise be disclosed without World Bank Group authorization. The date of the last Country Partnership Framework was May 15, 2013 (Report No. 76349-SB discussed on June 13, 2013) and the date of the Country Framework Strategy Performance and Learning Review was August 5, 2016 (Report No.105699-SB). CURRENCY EQUIVALENTS Exchange Rate Effective as of June 26, 2018 Currency Unit: Solomon Islands Dollars (SBD) US$ 1.00 = SBD 7.92 FISCAL YEAR January 1-December 31 ABBREVIATIONS AND ACRONYMS ADB Asian Development Fund ICT Information and Communication ASA Analytics and Advisory Services Technology CAUSE Community Access and Urban IDA International Development Enhancement Project Association CDD Community-driven Development IFC International Finance Corporation CDF Constituency Development Fund IMF International Monetary Fund CEWG Core Economic Working Group IRCCNH Increasing Resilience to Climate CGAP Country Gender Action Plan Change and Natural Hazards Project CGGM Community Governance and JICA Japan International Cooperation Grievance Management Agency CLR Completion and Learning Review JSDF Japan Social Development Fund CPF Country Partnership Framework kWh Kilowatt-hour CPI Consumer Price Index MDTF Multi-Donor Trust Fund CPS Country Partnership Strategy MFAT New Zealand Ministry of Foreign CRISP Community Resilience to Climate Affairs and Trade and Disaster Risk in Solomon Islands MIGA Multilateral Investment Guarantee Project Agency DFAT Australian Department of Foreign MMERE Ministry of Mines, Energy, and Rural Affairs and Trade Electrification DPO Development Policy Operation MP Member of Parliament EGPS Extractives Global Programmatic MPA Multiphase Programmatic Approach Support MTDP Medium-Term Development Plan EU European Union MoFT Ministry of Finance and Treasury FY Fiscal Year NDS National Development Strategy GDP Gross Domestic Product NMP National Minerals Policy GPOBA Global Partnership on Output-Based PLR Performance and Learning Review Aid PNG Papua New Guinea HIES Household Income and Expenditure PPA Project Preparation Advance Survey PPP Public-Private Partnership PROP Pacific Islands Regional Oceanscape SIRAP Solomon Islands Roads and Aviation Program Project RAMSI Regional Assistance Mission to SIWA Solomon Islands Water Authority Solomon Islands SISEP Solomon Islands Sustainable Energy RDP Rural Development Program Project REP Rapid Employment Project TRHDP Tina River Hydropower SCD Systematic Country Diagnostic Development Project SDGs Sustainable Development Goals WBG World Bank Group SIEAREEP Solomon Islands Electricity Access WSS Water Supply and Sanitation and Renewable Energy Expansion Project SIG Solomon Islands Government SIPNET Solomon Islands Professional Women Network World Bank IFC MIGA Vice President: Victoria Kwakwa Stephanie von Friedeburg Keiko Honda Director: Michel Kerf Vivek Pathak Merli Baroudi Task Team Leader: Guido Rurangwa Vsevolod Payevskiy, Daniel Street Sandro Diez-Amigo Gero Verheyen FY2018–FY2023 COUNTRY PARTNERSHIP FRAMEWORK FOR SOLOMON ISLANDS TABLE OF CONTENTS I. INTRODUCTION .......................................................................................................................................... 1 II. COUNTRY CONTEXT AND DEVELOPMENT AGENDA ................................................................................. 2 II.1. Socioeconomic and Political Context ..................................................................................................... 2 II.2. Recent Economic Developments ........................................................................................................... 4 II.3. Poverty and Shared Prosperity .............................................................................................................. 9 II.4. Development Challenges ..................................................................................................................... 11 Provision of basic services has limitations, exacerbated by economic geography .................................... 11 Economic growth is dependent on a few localized extractive industries .................................................. 14 Benefits from uneven development need to be spread ............................................................................. 15 III. WORLD BANK GROUP PARTNERSHIP FRAMEWORK .............................................................................. 15 III.1. Government Program and Medium-term Strategy ............................................................................ 15 III.2. Proposed WBG Country Partnership Framework ............................................................................... 16 A. Lessons from CPS Completion and Learning Review and Stakeholder Consultations ........................... 16 B. Overview of the World Bank Group Strategy ......................................................................................... 18 C. CPF Objectives......................................................................................................................................... 20 III.3. Implementing the FY2018-FY2023 Country Partnership Framework ................................................. 32 IV. MANAGING RISKS TO THE CPF PROGRAM ............................................................................................ 39 Annex 1. CPF Results Framework................................................................................................................ 42 Annex 2. Solomon Islands FY13-FY17 Country Partnership Strategy Completion and Learning Review ... 53 Annex 3. Selected Indicators of Bank Portfolio Performance and Management ....................................... 78 Annex 4. Operations Portfolio (IBRD/IDA and Grants) ............................................................................... 79 Annex 5. Statement of IFC’s Held and Disbursed Portfolio ........................................................................ 80 Annex 6. Summary of the CPF consultations .............................................................................................. 81 Annex 7. The 2016-2035 NDS and MTDP for 2016-2020 ............................................................................ 88 Annex 8. Solomon Islands: Summary of SCD Priorities ............................................................................... 89 Annex 9. Solomon Islands: Applying selectivity filters to SCD priorities to design the CPF Program ......... 90 Annex 10. IDA18 Special Themes in Solomon Islands................................................................................. 92 Annex 11. Summary of development partners activities in Solomon Islands ............................................ 94 Map of Solomon Islands.............................................................................................................................. 98 Boxes Box 1. High transport costs undermine trade benefits in remote small economies .................................... 3 Box 2. Solomon Islands remains a fragile country ........................................................................................ 4 Box 3. Selected issues in the business regulatory framework ...................................................................... 8 Box 4. Maximizing Finance for Development through the TRHDP ............................................................. 23 Box 5. IFC and gender economic empowerment ........................................................................................ 34 Box 6. Tackling the drivers of fragility ......................................................................................................... 35 Box 7. Pacific Country Management Unit Agile Initiatives Implemented under IDA18 ............................. 36 Figures Figure 1. Solomon Islands: Real GDP per Capita ........................................................................................... 5 Figure 2. Possible Trajectories of Public Debt ............................................................................................... 6 Figure 3. Average Household Income Composition in Rural and Urban areas ........................................... 10 Figure 4: Analytical Framework for the Solomon Islands SCD .................................................................... 11 Figure 5: Public Expenditure on Police and Justice, Health, and Education, 2006-2015 ............................ 12 Figure 6. Filtering Process to Define the CPF Objectives ............................................................................ 18 Figure 7. SCD Priorities and CPF Focus Areas.............................................................................................. 20 Tables Table 1. Selected Macroeconomic Indicators ..............................................................................................
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