The Monitor shows an upturn in remittances in recent months after a marked decline over the early part of the year. There has also been an overall increase in tourism and in the prices of some key commodities. However, the weak global economy reduced government revenues and the ADB report finds that fiscal policy remains expansionary in much of the Pacific.

Fiscal conditions in the Fiji Islands, Kiribati, Tonga, and Tuvalu are of most concern. The fiscal positions in these economies will be difficult to sustain. With the support of development partners, efforts have been made recently to correct the situation.

The December 2010 edition of The Monitor, a tri-annual economic review of 14 Pacific island countries, also reveals that some governments have adopted a more conservative fiscal stance by restraining government expenditure and correcting long-standing fiscal problems.

The report includes a special case study on government-donor coordination in the Solomon Islands. This article focuses on the 'Core Economic Working Group', which was established in 2009 as a forum for donors and the Solomon Islands to discuss the government’s reform program.

'The Core Economic Working Group provided an opportunity for ADB, the World Bank and other donors to establish a dialogue with the Government of Solomon Islands to coordinate budget support during the global economic crisis,' said Robert Wihtol, Director General of ADB’s Pacific Department. 'Post crisis, this dialogue has continued and strengthened.'

The efforts of two countries - Kiribati and Tonga - to implement programs to strengthen budget management are outlined in The Monitor. The importance of political commitment to budget management is one of the best practice examples detailed in this article.

The Monitor provides an update of recent developments in the region and explores topical policy issues. The ADB publication uses data from Australia, New Zealand, US, and Asia to supplement data from the region and to provide up-to-date assessments and better understanding of the Pacific Island economies.