The provisions of funds under a program loan will generally only have an immediate impact on the overall level of economic activity if a pipeline of projects is in place when the funding becomes available. This was not the case when the ERSP (economic recovery support program) subprogram 1 loan was disbursed, but the delay in capital project construction to ensure more sustainable and beneficial projects were implemented was desirable. The Cook Islands governance of infrastructure projects had improved by the time of the release of subprogram 2 funds with project priorities and planning further advanced, providing a number of potential projects that could immediately use the ERSP funding assistance. The program modality is beneficial in that it enables the recipient government implementing agency to maximize the use of local suppliers of goods and services through appropriate project selection and contract package sizing.
Economic Recovery Support Program - Subprograms 1 and 2