Annex A: Background Information on PFTAC
Table A.1: Contributions to PFTAC Financing	
	
FY2003/05	
FY2006/08	
FY 2009/11	

$	
%	
$	
%	
$	
%	

Asian Development Bank	
1,299,000	
22.6	
800,000	
9.6	
1,000,000	
10.3	

Australia	
1,106,665	
19.2	
1,291,779	
15.6	
2,200,000	
22.5	

New Zealand	
443,013	
7.7	
1,937,979	
23.3	
2,289,070	
23.4	

Korea	
-	
--	
450,000	
5.4	
733,000	
7.5	

Japan	
1,935,373	
33.7	
2,013,208	
24.3	
2,161,721	
22.1	

IMF	
964,781	
16.8	
1,806,254	
21.8	
1,387,590	
14.2	

Total	
5,748,831	
100.0	
8,299,220	
100.0	
9,771,3811	
100.0	

Increase (%)	
NA	
	
44%	
	
18%	

	

	

	

1/ Total excludes carryovers of slightly less than $500,000 from the previous funding cycle.	
Source: Office of TA Management	

Table A.2: PFTAC Expenditures
Item	
Cumulative
Expenditures
FY2003/05
($)	
Cumulative
Expenditures
FY2006/08
($)	
% Share of Total FY2006/08
Expenditures	
% Change From FY2003/05	

Externally Financed	

	

Long Term Advisors	
2,464,250	
2,961,600	
  38	
  20	

Public Financial Management	
   580,800	
   711,000	
    9	
  22	

Revenue Administration	
   674,800	
   769,800	
  10	
  14	

Financial Sector Supervision	
   674,800	
   711,000	
    9	
    5	

Statistics	
   591,550	
   769,800	
  10	
  30	

	

	

Short Term Experts	
   500,457	
   973,497	
  12	
  96	

	

	

Regional Travel	
   293,198	
   577,009	
    7	
  93	

Professional Attachments	
     99,767	
   303,608	
    4	
204	

Seminar Participants	
   270,387	
   429,544	
    5	
  59	

Other	
   209,482	
   154,948	
    2	
-26	

Administrative Fee	
   498,880	
   702,027	
    9	
  41	

	

	

Total Externally Funded	
4,336,422	
6,102,233	
  78	
  41	

	

	

IMF Financed	
1,146,281	
1,698,660	
  22	
  48	

	

	

Grand Total	
5,482,703	
7,800,893	
100	
  42	

Source: Office of TA Management	

Table A.3: Characteristics of Pacific Island Countries	
Melanesia	Population
2006
(000)	Area
(sq km)	GDP
($ Million Current)	GDP/ Capita ($)	Exchange Rate (US$, 2006)	Post 2000 Average Annual Real GDP Growth Rate	Average Annual Inflation Rate Since 2000 (%)	Most Recent Revenue to GDP Ratio	
								(%)	
									
Fiji	   833.9	  18,272	  3,826	4,613	   1.61	2.7	3.1	25.4	
Papua New Guinea	6,331.0	462,243	11,127	1,824	   2.97	3.3	6.2	33.9	
Solomon Islands	   510.2	  28,330	   928	1,870	   7.65	2.5	8.6	31.8	
Vanuatu	   229.4	  12,190	   886	3,964	102.44	2.1	2.4	20.0	
Average Melanesia	1,976.1	  130,259	  4,192	3,068	   28.67	2.7	5.1	27.8	
 									
Micronesia									
Federated States of Micronesia	108.0	701	607	  5,619	US$	-0.8	2.0	23.1	
Kiribati	 95.5	811	322	  3,420	1.2	0.1	1.4	   129.3	
Marshall Islands	 52.3	181	    391	  7,535	US$	2.9	2.4	24.1	
Nauru	   8.8	  21	-	-	1.2	  -11.8	-	-	
Palau	 20.2	488	286	14,262	US$	-	2.1	23.1	
Average Micronesia	 57.0	440	    402	  7,709	1.08	    -2.4	2.0	49.9	
 									
Polynesia									
Cook Islands	  20.2	   273	-	-	1.36	3.1	3.3	28.6	
Niue	-	   259	-	-	-	-	-	-	
Samoa	180.0	2,935	1,013	5,651	2.62	3.8	5.8	28.4	
Tokelau	-	    12	-	-	-	-	-	-	
Tonga	101.4	   727	  570	5,640	1.97	2.0	8.3	30.3	
Tuvalu	   9.8	    26	-		1.20	3.6	3.3	48.7	
Average Polynesia	 77.9	  705	NA	NA	1.79	3.1	5.2	34.0	
Source: IMF’s International Financial Statistics, ADB Key Indicators and AUSAID Pacific Program Profiles	

Table A.4: Proxy For Institution Absorptive Capacity	
	
Government Effectiveness	
Regulatory Quality	
Average 2007 Ranking for the Two Indicators	
Descriptor of
Institutional Absorptive
Capacity	

	
2007 Ranking	
Change Since 2000	
2007 Ranking	
Change Since 2000	

Melanesia	

	

	

Fiji	
36	
	
34	
	
35	
Modest	

Papua New Guinea	
25	
	
30	
	
28	
Challenging	

Solomon Islands	
20	
	
13	
	
17	
Challenging	

Vanuatu	
46	
	
33	
	
40	
Modest	

Micronesia	

	

	

Federated States of Micronesia	
NA	
	
NA	

NA	

Kiribati	
34	
Worse	
14	
	
24	
Challenging	

Marshall Islands	
35	
	
23	
	
29	
Challenging	

Nauru	
35	
	
23	
	
29	
Challenging	

Palau	
37	
	
NA	
	
NA	
NA	

Polynesia	

	

	

Cook Islands	
44	
	
55	
	
50	
Good	

Niue	
NA	
	
NA	
	
NA	
NA	

Samoa	
49	
Worse	
52	
	
51	
Good	

Tokelau	
NA	
	
NA	
	
NA	
NA	

Tonga	
32	
	
23	
	
28	
Challenging	

Tuvalu	
41	
Worse	
20	
Worse	
31	
Modest	

Notes:  (i) The ranking shows the proportion of the 212 countries that are ranked below the country in question. 
            (ii) Change since 2000 means that the difference between the 2007 and 2000 scores are statistically different at the 90% confidence level. For countries for which there is no indication, either no data was available for 2000 or the difference in the scores for the two years was not significantly different.
            (iii) Institutional absorptive capacity was rated as Excellent, Good, Modest and Poor, depending on the average of the Government Effectiveness and Regulatory Quality scores. Based on the rankings, the countries were grouped into four categories: (i) very challenging for counties in the bottom 15%; (ii) challenging for countries in countries ranked from 15% to 29.9%; (iii) modest for countries ranked between 30% and 45%; and (iv) good for countries ranked above 45% of the 212 countries covered in the database.	
Source: World Bank Governance Indicators	

Table A.5: Consistency of the PFTAC Model with the Accra Agenda for Action	
Accra Agenda for Action	Characteristics of PFTAC Model 	
Promoting country ownership: Donors will respect country priorities and invest in their human resources and institutions.	TPRC provides a voice to the partner countries in establishing PFTAC priorities. PFTAC focus on building institutional capacity and strengthening human resources. The support for capacity development is largely demand-driven.	
Building more effective and inclusive partnerships, reducing aid fragmentation and addressing the related management and coordination challenges: Aid effectiveness is reduced when there are too many uncoordinated, duplicating initiatives. Donors will reduce aid fragmentation by improving the complementarities of efforts and the division of labor among donors. Maximum efforts are needed to coordinate development co-operation.	The donors identified IMF as the international organization with the comparative advantage for macroeconomic management in the Pacific and provided funds to it. By pooling their funds, donors reduced the fragmentation and transaction costs for countries    (e. g., fewer missions; fewer TA providers addressing the same topic; less conflicting advice in areas related to macroeconomic management). 	
Working with all development actors, including promoting South/South cooperation, and deepen engagement with civil society organizations.	PFTAC primarily interacts with beneficiary governments and official TA providers. PFTAC does not interact significantly with civil society, foundations or private sector organizations. PFTAC tries to use Pacific expertise, support regional harmonization and promote quasi-peer reviews through regional workshops are consistent with encouraging South/South cooperation. 
	
Strengthen and use country systems. Successful development depends on the capacity of governments to implement policies and manage public resources through their institutions and systems. Donors committed to using those systems to the maximum extent possible. Where country systems require strengthening, donors will support the necessary reforms and provide capacity development assistance.	PFTAC TAs strengthen country systems. PFM work helps to create fiscal systems that donors can use to scale up their aid using general budget support. Under the Accra Agenda for Action donors reaffirmed their Paris Declaration commitment to provide 66% of aid as program-based approaches and to channel 50% or more of government-to-government assistance through country fiduciary systems.	
Achieving development results and openly accounting for them: Improve the management for results by (i) developing cost-effective results management instruments; (ii) better linking information in national statistical systems, budgeting, planning and monitoring systems and country-led evaluations; and, (iii) strengthening national statistical capacity.	PFTAC is in the process of developing better systems to measure and monitor the results that they are achieving, although these systems need further work. PFTAC provides modest assistance to strengthen national statistical systems and extensive assistance to strengthen the fiscal systems.  	
Be more accountable and transparent to our publics for results, including the results obtained from development expenditures, undertaking independent evaluations and both donors and partner countries doing their utmost to fight corruption.	Independent evaluations are an integral part of PFTAC’s governance system. Much of the PFTAC’s assistance in the fiscal area is designed to improve the transparency, accountability and control of public expenditures and revenues, essential elements of the fight against corruption, 	
Adopt aid policies for countries in fragile situations: The aid effectiveness principles need to be adopted in fragile states, including countries emerging from conflict to reflect weak ownership and weak capacity (see the Principles for Good International Engagement in Fragile States and Situations). Donors committed to working to address the issue of countries that receive insufficient aid.	Although there have been periodic issues related to changes in governments in some PICs, post-conflict countries are more of an issue in other regions. 	
Increase medium-term aid predictability by: (i) strengthening budget planning processes for managing domestic and external resources and improving the linkages between expenditures and results over the medium term; and (ii) donors providing information on their rolling three- to five-year forward expenditure and/or implementation plans.	The past commitment of development partners to finance the PFTAC over a three year period was consistent with improving the predictability of aid. Extending the time period covered by the next replenishment to five years would be consistent with this aspect of the Accra Agenda for Action. 	

Table A.6: Financial Comparisons of Cost per Person Month of Resident Advisors and Short Term Experts Across RTACs	
RTAC	
Fiscal Area
($)	
Monetary/
Financial Sector Area
($)	
Statistics Area
($)	
Total
($)	
Ratio of Budget for Short Term Consultants to Resident Advisors (%)	

PFTAC	
22,000	
19,800	
20,500	
21,500	
33	

CARTAC	
NA	
NA	
NA	
NA	
76	

East AFRITAC	
23,300	
24,400	
24,300	
23,800	
60	

West AFRITAC	
22,600	
22,600	
22,700	
22,600	
46	

Central AFRITAC	
23,800	
22,600	
22,500	
23,500	
361	

METAC	
22,000	
22,400	
22,300	
22,200	
61	

Average	
22,700	
22,400	
22,500	
22,600	
572	

	

	

	
Note: Total expenditures on Resident Advisors and Short Term Experts (including travel) divided by the number of person months of input, rounded to the nearest $100. Similar cost per month comparative data was not available for CARTAC because its financial management system differs from that used for the other RTACs. 
1= Based on Central AFRITAC’s expenditures during its first full year of operations.
2= Excludes Central AFRITAC	
Source: Office of TA Management	

Table A.7: Trend in Control of Corruption in Pacific Island Countries, 2000 to 2007	
	
Ranking Among Countries in 2007	
Ranking Among Countries in 2000	
Difference in Control of Corruption Score  in the Two Years Is Significant at 90% Level	

Melanesia	

	

Fiji	
42	
62	
Yes, worse	

Papua New Guinea	
9	
25	
Yes, worse	

Solomon Islands	
33	
12	

Vanuatu	
63	
23	
Yes, better	

	

Micronesia	

	

Federated States of Micronesia	
NA	
NA	

Kiribati	
61	
51	

Marshall Islands	
49	
30	

Nauru	
50	
NA	

Palau	
	
NA	

	

	

Polynesia	

	

Cook Islands	
83	
55	

Niue	
NA	
NA	

Samoa	
64	
56	

Tokelau	
NA	
NA	

Tonga	
13	
35	

Tuvalu	
54	
61	

	

	

Source: World Bank Governance Indicators