PROGRAM INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB7070 Operation Name MH: First ICT Sector Development Operation Region EAST ASIA AND PACIFIC Country Marshall Islands Sector Telecommunications (100%) Operation ID P128013 Lending Instrument Development Policy Lending Borrower(s) MARSHALL ISLANDS RMI Ministry of Finance Fax: 692-625-3607 finsec@ntamar.net Implementing Agency Ministry of Finance PO Box D Cabinet Building Majuro Marshall Islands 96958 Tel: (692) 625-7017 finsec@ntamar.net RMI Ministry of Transport & Communications Date PID Prepared May 24, 2012 Estimated Date of Appraisal June 19, 2012 Estimated Date of Board September 6, 2012 Approval Corporate Review Decision Following the corporate review, the decision was taken to proceed with the preparation of the operation. Country and Sector Background 1. Country development context. The Marshall Islands is a group of 26 small atolls in the northern Pacific Ocean with a population of about 53,000. Most of the population is concentrated on Majuro (27,000) and Kwajalein (11,000) islands. Only three other islands, Ailinglaplap (1,706), Arno (1,753) and Jaluit (1,779), comprise more than 1,000 inhabitants. The remaining Outer Islands are dispersed and sparsely-populated. The economy is based on natural resources (fisheries) and transfers, remittances from expatriate workers and US Government grants through the Compact of Free Association (“Compact�), and is dominated by a large public sector. One of the main challenges facing the Marshall Islands is how to overcome its remoteness and dispersed geography by developing the infrastructure that it needs to connect its people domestically and internationally and to encourage social and economic development. -1- 2. Sectoral context. The Marshall Islands is one of the least “connected� countries in the world. There is a single service provider, the majority state-owned National Telecommunications Authority (NTA). About 35 percent of the population subscribes to ICT services. Mobile phone penetration is around 26 percent of the population. Less than 2 percent of the population subscribe to an Internet connection. Mobile broadband is not yet available. Total broadband Internet1 take-up is approximately than 520 subscribers or around 1 percent penetration (although only 120 subscribers have subscribed for speeds of 512kbs or greater). This is despite the fact that Majuro and Kwajalein are connected to a 10 Gbps capacity fibre- optic cable system (HANTRU, financed by a loan to NTA from the United States Department of Agriculture’s Rural Utilities Service, RUS) that links the Marshall Islands to Guam. Cable capacity is presently under-used, in part due to the monopolistic market environment. 3. Limited connectivity imposes high business and social costs, including the isolation of Outer Island communities and missed opportunities for economic and social development. The main reasons for the limited and costly service include the high costs of connecting remote and sparsely populated islands and the monopolistic market structure. Reforms implemented in similar countries, including elsewhere in the Pacific such as Fiji, Samoa, Solomon Islands, and Vanuatu, demonstrate linkages between market-based reforms and improved economic and social indicators. 4. The Government has indicated its commitment to liberalizing the ICT sector and supporting the introduction of competition. The Government has invited the Bank to analyze the sector and evaluate reform options and their implications, as well as to advise on new directions in ICT policy, and on that basis, provide support for implementation of reforms. Based on initial advice from the Bank, the Government has directed officials to develop a national ICT policy providing for market liberalization and to prepare legislation to give effect to the policy reforms. A letter of development policy will be attached to the final Program document. The objective of the proposed sector reforms is focused on increasing private participation and investment in the provision of ICT services, strengthening the incumbent operator, and moving the sector towards competition. The Government recognizes that changes are needed in terms of market structure, regulation and the capacity of institutions to lead and implement the Government’s vision for the sector. The pillars of the proposed reform program are: (a) New legal framework: a modern enabling environment for telecommunications and ICT service provision is essential in order to permit and support private sector investment in the sector and the introduction of competition, plus expanded access for populations in the Outer Islands. (b) Reform of the incumbent operator: NTA has indicated that it does not have access to adequate financing for infrastructure upgrades and expansion, which has limited its ability to increase access to services. It has also indicated that it would benefit from private sector involvement to strengthen its operations and prepare it for competition. The Government will undertake an analysis of possible options for obtaining private sector investment in NTA, including the restructuring of its international cable asset and associated debt, and 1 NTA classifies broadband Internet as speeds 128kbs or greater; the International Telecommunications Union definition of broadband is a minimum download speed of 256kbps -2- preparing NTA to operate in a competitive environment. (c) Introduction of competition: The Government intends to open the market to competition through an open tender process pursuant to a new transparent licensing regime. 5. Other countries in the region (Federated States of Micronesia and Palau) are considering the establishment of independent telecommunications regulators. There is therefore the potential to reduce the costs to each country of regulation and to enhance sharing of regulatory experiences through the establishment by the Marshall Islands and neighboring countries of a subregional body to which a national regulator could delegate specific activities. It is envisaged that the new Communications Law will allow the Minister of Transportation and Communications, after consultation with the Marshall Islands regulator, to authorize the regulator to delegate certain of its functions to such a subregional body. Notwithstanding any such delegation, however, overall responsibility for sector regulation at the national level would remain with the Marshall Islands regulator. 6. Sector experience in comparable countries and analysis of the Marshall Islands economy supports an assessment that new licensees will likely enter the market upon liberalization of the ICT sector. Nevertheless, the Government acknowledges that the size of the market means that, depending on prevailing economic conditions, it will be difficult attracting private sector investment. Accordingly, it is essential that the Government designs the legal and regulatory framework in such a manner that it maximizes the attractiveness of the ICT sector as an investment destination. The World Bank will provide guidance and technical assistance will be mobilized to ensure that the Government maximizes the likelihood of creating a sustainable, workably competitive marketplace for ICT. 7. ICT Sector Policy falls under the Ministry of Transportation and Communications. The Ministry is currently responsible for managing technical regulation spectrum management and numbering. The Ministry has very limited technical capacity to guide the development of the sector. It is anticipated that, as part of the reforms, a new independent regulator will be established to take on these responsibilities in relation to the telecommunications sector, as well as responsibility for economic regulation. The capacity of the Ministry in the policy area— which cuts across other sectors also—will need to be enhanced. Operation Objectives 8. The objective of the proposed Program is to increase access to telecommunications in the Marshall Islands. The Program will increase the availability of telecommunications infrastructure and enable the more widespread application of ICT services supporting improvements in economic and social development. 9. Expected sector-specific outcomes are:  Increase in the level of competition in the ICT sector (increased number of licensees, including Internet Service Providers  Increase in mobile penetration  Increase in Internet penetration -3-  Increase in broadband Internet penetration  Access to ICT services offered on Outer Islands currently without service  Reduction in prices of core telecommunications services (local and international calls and Internet) 10. The broader macroeconomic and social development impacts to which the program would likely contribute include: (a) new investment, and employment-generation; (b) direct job creation in the telecommunications industry and related services such as construction, tourism, and indirect job creation throughout the economy; (c) lower transaction costs and new marketing channels and opportunities, particularly for small businesses; (d) increased availability of value-added services such as mobile phone-enabled banking (e.g., for remittance transfers), e-commerce, and, potentially, online government services; (e) improved communications facilities for schools (including Internet access to all schools nationwide), clinics and government offices; (f) potential business opportunities for women and youth; and (g) improved integration of Outer Island communities. 11. The proposed operation is the first of a series of three DPOs. The Program consists of three ICT Sector Development Operations covering the period 2012-2016. The first operation (US$3 million IDA Grant) will focus on the basic policy and regulatory foundations for ICT sector reform and on an investigation of the feasibility of splitting the submarine cable assets and the related RUS loan out of the incumbent operator. The second operation (US$5 million IDA Grant) will focus on key enabling legislation, the establishment of the new sector regulator, the adoption of a plan for restructuring of NTA, and the allocation of spectrum for new mobile operators. The third operation (US$5 million IDA Grant) will focus on new licensing and market entry, the commencement of regulatory functions, and further strengthening of the ICT sector enabling environment, with a particular emphasis on facilitating access to ICT in Outer Islands. This programmatic approach is mainly due to the gradual nature of the policy, legal, institutional and structural reforms that will need to be implemented and appropriately sequenced to meet the development objective. 12. The proposed multi-year programmatic series of operations will assist the Government of the Marshall Islands to implement key aspects of its reform agenda for the ICT sector, while providing a predictable flow of resources in a challenging fiscal environment. The Program will support the following initiatives: (a) policy development to guide sector reform and the transition from a monopolistic to a liberalized telecommunications market; (b) development of a new legal and regulatory framework for telecommunications/ICT and an independent regulatory function; (c) ICT sector liberalization, including restructuring the majority state-owned National Telecommunications Authority (NTA); and (c) improving the legal framework and access to ICT services. Rationale for Bank Involvement -4- 13. Further to the Government’s request for analytical/advisory assistance in 2010 the World Bank has so far provided technical assistance to the Government on (a) ICT sector development options and strategy issues, including an assessment of existing network infrastructure, a supply and demand analysis, and an initial review of the current policy and legal environment (2010/2011); and (b) policy reform and development. The World Bank has extensive experience in the field of telecommunications policy, regulatory reform and rural access issues. It has advised several governments on ICT issues in the Pacific and globally. The proposed operation draws on lessons learned from implementing similar reforms in the Pacific region and other comparable countries. 14. The Marshall Islands faces many of the problems typical in small remote economies. Its small size and remoteness increase the costs of economic activity; there are no economies of scale. Remoteness imposes transport costs that increase the costs of trade and fundamentally constrain competitiveness of exports of goods and services in world markets. These same factors also push up the cost of providing public services and fulfilling the basic functions of government relative to the size of the economy. Geographical characteristics, including population centered on small, low lying atolls, make the country vulnerable to natural disasters. 15. These barriers have led to an undiversified economic base and persistent current account deficits. With limited opportunities for exporting and domestic production, public administration and social services constitute the largest share of the economy (33 percent of GDP). The fisheries sector comprises around 10 percent of GDP, while manufacturing makes up less than 2 percent. Copra and fisheries are the most significant exports, while the Marshall Islands is almost completely reliant on imports for food, fuel, and other basic needs. Imports of goods and services totaled US$172 million in 2011, compared to total goods and service exports of just $52 million. The current account deficit excluding grants has averaged 47 percent of GDP since 2007. 16. With substantial constraints to export-led growth, the Marshall Islands is heavily dependent on aid and other fiscal transfers. The current account deficit is largely financed by grant inflows. Aid and fiscal transfers, primarily from the United States, support reasonable standards of living for the majority of the population, with GNI per capita of US$3,771 in 2010. On-budget grant income from various sources is equivalent to 40 percent of GDP, and official development assistance per capita was over US$1,100 in 2009. 17. Public expenditure in the Marshall Islands has expanded rapidly since the 2003 Compact, supporting reasonable levels of growth. The 2003 Compact of Free Association with the US includes various military and other access arrangements and provides a 20-year stream of funding of around US$55 million per annum, or 32 percent of GDP in 2011. This 2003 Compact agreement replaced the first agreement, which ran from 1986 to 2001, and included a substantial increase in fiscal resources provided to the Government of the Marshall Islands. Increased fiscal resources allowed a period of rapid public sector expansion through FY2007. Public expenditures grew by an annual average rate of 12 percent between FY2003 and FY2007, and employment in the public sector expanded by 507 jobs or at an annual average rate of 6 percent over the same period. Expansion in public spending fuelled growth of 1.9 percent between FY2003 and FY2007, peaking at 3 percent in 2007. -5- 18. The Marshall Islands was hit hard by the global food and fuel and economic crises. Growth in public expenditure was already slowing in 2008 and a range of major donor-financed projects had reached completion when fuel and food prices reached record levels. Heavily reliant on imports, inflation in the Marshall Islands reached 15 percent, eroding domestic real incomes and reducing demand for local business. Record fuel prices brought about a severe cash flow crisis at the state-owned electricity utility, the Marshalls Energy Company (MEC), with Government required to step in to meet the cost of fuel purchases. Domestic revenues declined slightly as the economy slowed. Facing a cash-flow crisis, the Government of the Marshall Islands imposed emergency expenditure controls and announced a “state of economic emergency� in late FY2008. The economy contracted by 1.9 percent during 2008, and a further 1.3 percent during 2009. 19. Recovery resumed in 2010 and is being sustained through moderation of global commodity prices and progress with fiscal management. The economy grew by 5.2 percent in FY2010, driven by an expansion of fishery capacity and exports, a recovery of external demand, and the moderation of fuel prices. Inflation stabilized in FY2010, falling to 1.6 percent but surged again to 9.5 percent in FY2011, driven by strengthening import prices and strong growth. Government finances have also improved since FY2009 through the imposition of successive across-the-board spending cuts in FY2009 and FY2010 which have reduced total recurrent spending by more than 10 percent. The combination of economic recovery and expenditure control measures have allowed the government to avoid cash-flow problems in FY2011, and generate a small fiscal surplus, equivalent to about 0.25 percent of GDP. 20. While confronting fiscal challenges, the Marshall Islands is also struggling to address key vulnerabilities in the management of state-owned enterprises (SOEs). SOEs are economically significant, holding assets of US$116 million as of end-FY2008 (about 76 percent of GDP). Performance of many SOEs is poor, however, with Government subsidies to the SOE sector reaching an average of $7.2 million per annum between FY2007 and FY2010 (around 4 percent of GDP). Poorly performing SOEs represent a fiscal risk for government while also constraining growth through poor service and high prices. 21. The Government is continuing to progress key economic and public sector reforms, but challenges remain. Ongoing reforms include the following. The Comprehensive Adjustment Program (CAP) Advisory Group was created in 2010, and its recommended priorities for fiscal and structural reform have been endorsed by the Cabinet. A Tax and Revenue Reform and Modernization Commission has also been created, with its recommendations soon to be implemented through a program of reform supported by the Pacific Financial Technical Assistance Center. A report on the SOE sector was prepared with ADB assistance, which led to the MEC Board adopting a comprehensive recovery program. The ADB is supporting these reform efforts through the Public Sector Program including loan refinancing of the external debt of MEC. A recent review of the current status of the Public Sector Program has indicated that while some reforms are on track (such as energy sector and tax reform), others (such as generation of a sustained fiscal surplus and expenditure compression) are not. -6- 22. The Marshall Islands faces growing poverty and inequality, with the benefits from public spending unevenly distributed. While data issues preclude detailed analysis, inequality within Marshall Islands is relatively high and likely to be exacerbated by recent economic trends. According to 1999 data, the Gini coefficient in the Marshall Islands was 0.54, greater than Fiji at 0.46, Papua New Guinea 0.46, Samoa 0.43, Tuvalu 0.43, Tonga 0.42 and the Federated States of Micronesia 0.41. Rapid inflation over recent years is reported to have severely impacted the poor. Economic growth has been driven by expansions in government expenditure and payments to land-owners in certain islands, disproportionately benefiting urban populations and those with land title, with populations in Outer Islands (especially in areas not benefiting from land-use payments or compensation payments for those living in nuclear affected sites) left further behind. Government revenue policy and expenditure do not counter existing inequalities, with an outdated tax system and various implicit and explicit exemptions and subsidies having a strongly regressive impact. 23. The Marshall Islands thus faces important challenges over the medium-term. Economic growth is expected to remain strong in 2012, at 5.4 percent, with an increase in fisheries output from newly commissioned purse seiners, large inflows from US military land use agreements, and a US Federal Aviation Administration-financed airport rehabilitation project. Beyond 2012, growth is expected to moderate with the gradual reduction in Compact inflows, planned downsizing of the Kwajalein military base, and weak financial positions of key SOEs. Potential sources of growth over the medium-term include further donor-financed capital projects, an expansion of existing fishing operations and an improvement of fishing license revenues following recent international negotiations, and increased employment opportunities at the Kwajalein base with the possible commencement of a new satellite project. 24. The macroeconomic policy framework is adequate and suitable for the purposes of this operation, but is subject to uncertainty. A sharper than expected rise in global commodity prices would exacerbate inflation and lead to further contractions of the Marshall Islands economy. The macroeconomic policy framework also depends on the continued availability of grants from development partners over the medium-term, especially the United States, and the inadvisability of borrowing to fund fiscal deficits. Any change in Compact arrangements or the Marshall Islands capacity to access federal grants, in the context of ongoing problems in the economy of the United States economy, would have a significant and negative impact on macroeconomic stability. Some uncertainty regarding the US plans for the Kwajalein military base presents some risk in terms of potential job losses but these may be offset by new projects. Finally, the country remains vulnerable to a variety of natural disasters that may also place considerable stress on the macroeconomic policy framework. 25. The World Bank and the IMF maintain a close working relationship on the Marshall Islands, and engage in an ongoing dialogue on a range of macroeconomic and structural issues. The Bank participated in the recent Article IV mission in the Marshall Islands from October 3 to 7, 2011, facilitating the discussions on fiscal policy and structural reform in particular. The Bank and the Fund share a common view about the Marshall Island’s macroeconomic and structural reform priorities. -7- Tentative financing Source: ($m.) BORROWER/RECIPIENT 0 International Development Association (IDA) 3 Total 3 Follow-up Operations (tentative) ($m.) Second ICT Sector Development Policy Operation 5 Third ICT Sector Development Policy Operation 5 Etc. Total 10 Institutional and Implementation Arrangements 26. The existing institutional structure for aid management in the Marshall Islands will be used to implement and monitor the policy actions supported by the proposed operation. The Ministry of Finance will provide overall guidance for the budget support program, and will assume overall responsibility for coordinating the implementation, monitoring and evaluation of the proposed operation. The Ministry of Finance will also be ultimately responsible for reporting progress and coordinating actions among other concerned government agencies, including the Ministry of Transportation and Communications. 27. Specific indicators that the Bank will monitor for the policy areas supported by the proposed operation are set out in the Project documents. The Bank will work with the Government to assess progress in implementing the policy actions supported by the proposed operation, and to monitor the specific indicators associated with each of the policy areas. Through its ongoing dialogue with Government, the Bank will help to sustain the linkages between the policy actions under the proposed operation and the progress of the broader reform agenda. Through this dialogue, the Bank will continue to work with the Government as it implements its broader reform agenda and takes its reform program further over time. The Bank will also play a role in supporting Government as it seeks to coordinate the technical assistance that will be provided to further support the Government reform agenda for the ICT sector. Risks and Risk Mitigation 28. The proposed operation carries six main risks, for which risk mitigation strategies have been adopted. These risks relate to: (a) the thin capacity of the public sector, (b) a change in political commitment to reforms, (c) implementation delays, (d) difficulties attracting private sector investment and sustaining effective competition, (e) fiscal risk, and (f) dependence on the continued availability of grants from development partners. These risks and the associated risk mitigation strategies are described below. -8- 29. The thin capacity of the public sector in the Marshall Islands poses a risk that the policy actions cannot be implemented as quickly or successfully as expected. The new independent regulator will need to attract expert staff capable of regulating and administrating the sector and implementing the new regulatory framework. Technical Assistance, including knowledge transfer and capacity-building efforts, will be mobilized in order to increase local institutional capacity. This may need to be in a “substitution� role in the short term. 30. There is a risk of change in political commitment and opposition from the incumbent operator to the move from monopoly to competition. This risk is being mitigated through: (a) continuous consultation and awareness-raising around benefits of competition, including improved access and increased affordability of services; (b) strong commitment from the Government to the reform program; and (c) Government support to the incumbent to assist it to restructure and prepare to compete effectively in an open market. 31. Delays or partial implementation of the priority reforms will jeopardize the entire reform process. The existing law guarantees NTA a monopoly on supplying switched telecommunication services. Termination of this monopoly through the new legal framework is an essential step that must be completed before competition may be introduced. This risk will be mitigated through the provision of technical assistance with the drafting of a new and modern communications law that supports market liberalization and sector regulation. 32. Difficulties attracting private sector investment and sustaining effective competition. This risk can be minimized through designing a legal and regulatory framework in such a manner that it (i) maximizes the attractiveness of the ICT sector as an investment destination; and (ii) provides a regulatory environment that supports effective competition and provides best practice mechanisms for regulating a monopoly service provider. 33. Fiscal risk for Government. The Government currently holds an approximately 70 interest in NTA; it currently faces fiscal risk in the event that NTA is unsuccessful in the market. Government also incurs contingent liabilities under guarantees it has provided to external lenders to NTA. The Project identifies a number of policy initiatives, including restructuring NTA to improve its viability, investigating options for reducing the risk of requirements for government financial support of NTA, and undertaking reforms aimed at ensuring that revenues from international connectivity increase, in order to meet the capital and operating expenses associated with the submarine cable. This work will be supported through the provision of technical assistance. 34. The dependence of the Marshall Islands macroeconomic framework on the continued availability of grants from development partners poses the risk that delays in the receipt of grants may lead to cash flow problems that undermine budget execution, impede the normal functioning of government, and divert attention from the reform agenda. This risk has been mitigated by the Bank’s efforts, at the Government’s request, to coordinate the support of development partners for a joint, multi-year reform matrix. -9- Poverty and Social Impacts and Environment Aspects Poverty and Social Impacts 35. Data availability constrains understanding of the likely poverty and social impacts of telecommunications liberalization in Marshall Islands. Little data is available regarding the nature and incidence of poverty in the Marshall Islands. The most recent census was completed in 2010, but the results are not yet available. The only Household Income and Expenditure Survey was carried out in Marshall Islands in 2002. A Community and Socio-Economic Survey was completed in 2006, and a Demographic and Health Survey was carried out in 2007. These provide some cursory information regarding the level and geographical incidence of poverty. No further detailed poverty surveys are currently scheduled. Without detailed household expenditure and income information it is difficult to quantify the likely poverty impacts of telecommunications liberalization. Globally numerous reports, including the World Bank’s ICT for Development Report (2010) cites economic impacts of telecoms liberalization including growth of mobile and broadband Internet. A recent report on telecoms liberalization in Vanuatu (Pacific Institute of Public Policy, 2012 see www.pacificpolicy.org ) provides an overview of broad economic and social benefits of sector reform in particular the rapid growth of mobile telephony; and IFC analysis for Solomon Islands, Papua New Guinea and Fiji is ongoing. 36. The proposed operation will support the provision of public services within challenging fiscal constraints. To adequately capitalize the Compact Trust Fund to sustainable levels by the time Compact grants expire, the Government will need to achieve fiscal surpluses of around 5 percent of GDP to 2016. While some scope exists for fiscal consolidation through improvements in the efficiency of public service delivery, it unlikely that this target could be achieved in the short-term without some reductions to financing of core public services. The budget support, amounting to almost 5 percent of total Government expenditure in 2010 under DPO 1, will help the Government of the Marshall Islands achieve fiscal sustainability objectives over the short- term, while not compromising service delivery as options for improving the allocative and technical efficiency of government expenditure are explored through planned reform programs. In the absence of such assistance, the government would face a difficult trade-off between substantial cuts in public service expenditure in the short-term against inadequate capitalization of the Trust Fund, potentially undermining future service delivery. 37. International evidence demonstrates the potential for ICT liberalization to support private sector development and job creation. The current level of performance by the ICT sector imposes high business and social costs, including the isolation of entire island communities and missed opportunities for economic and social development. The introduction of competition and the reform of NTA are expected to lead to lower costs for ICT services and to increase access to ICT services in the Marshall Islands. While the overall macroeconomic and growth impacts of telecommunications liberalization are not well understood in Pacific contexts, market-based reforms implemented in similar countries, including elsewhere in the Pacific, demonstrate strong links between market-based reforms and improved economic indicators for rural and isolated households through job creation and access to economic opportunities. In Vanuatu, where competition was introduced in the mobile telephony sector in 2007, rural and Outer Island respondents to a recent survey considered access to affordable cellular phone services as vital to - 10 - business activity and something that it would be hard to continue exiting business activities without. 38. Reducing prices and increasing access will provide non-monetized but economically significant benefits to poor households. There is strong evidence across the region of high willingness-to-pay for telecommunications access for non-economic use. This indicates high social benefits to a wide range of household types from reducing costs and improving access. Market-based reforms can be expected to benefit poor households both through reducing the drain on constrained discretionary incomes from existing high charges and providing a large consumer surplus to new users. 39. Improved ICT access will facilitate access to public and privately provided services. Access to lower cost and more reliable telecommunications following market-based reforms is likely to facilitate the provision of public services and increase equity of access between urban and rural areas. Improved access to telecommunications can reduce perceptions of household vulnerability in rural areas through providing direct lines of communication to health and law and order services. Improved rural access through market-based reforms can also facilitate greater access to financial services over the medium-term, depending on the introduction of supporting technologies, further supporting job creation and expanding economic opportunities. 40. Private investment in NTA may lead to job losses. Experience elsewhere suggest that employment levels in the incumbent may fall in the event of restructuring and skills realignment, but employment opportunities in new entrants, regulatory institution, and ancillary services will likely increase. With NTA currently employing around 100 relatively highly-skilled staff, redundancies are expected to be limited and prospects good for finding alternative employment. Throughout implementation, job losses arising from any restructuring will be carefully monitored and mitigating measures considered as appropriate. Environmental Issues 41. The policy actions supported under the proposed operation would not have a negative effect on the Marshall Island’s environment or natural resources. As presented, the project is not likely to cause significant effects on environment, forests, and other natural resources. Contact point World Bank Contact: Natasha Beschorner Title: Senior ICT Policy Specialist Tel: 5781+3106 / 62-21-5299-3106 Fax: Email: Nbeschorner@worldbank.org Location: Jakarta, Indonesia (IBRD) Borrower Contact: Mr. Alfred Alfred Jr. Title: Secretary of Finance - 11 - Tel: (692) 625-7017 Email: finsec@ntamar.net For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-4500 Fax: (202) 522-1500 Web: http://www.worldbank.org/infoshop - 12 -