This book, by Christopher Browne with Douglas A. Scott, reviews the economic progress that Fiji, Kiribati, Papua New Guinea, Solomon Islands, Tonga, Vanuatu, and Western Samoa have made since independence. An overview of the region examines development strategies, external economic relations, the role of the private sector, and the evolution of financial structures. Seven country studies describe the main characteristics of each economy, analyze performance over the past decade, and provide detailed statistics suitable for cross-country comparison.
The Pacific island region has considerable potential for development, especially in the areas of tourism, fisheries, forestry, mining, and agriculture. However, these countries face many challenges to developing their economies and raising living standards, including their small size, distance from major markets, and vulnerability to natural disasters. The first half of this book provides an assessment of regional issues. The second half includes country-specific chapters, which provide an overview of each countries economic performance since independence and the main challenges ahead.
In an earlier issue of Pacific Islands Policy, Francis X. Hezel, SJ, examined the economic performance of the Federated States of Micronesia (FSM) and the Republic of the Marshall Islands before and after independence. Despite abundant start-up funds from the United States and advice from consultants on how to create future prosperity, self-sustainability for these island nations remains as elusive as ever. This report is an attempt to answer the question: Are FSM and the Marshall Islands unusual in this respect or are all small Pacific Island nations waging a losing battle in their attempts to create more self-supporting economies? Development economists frequently argue that with the right policies in place and necessary reforms implemented, any nation, whatever its limitations, can develop a successful economy. In this report, Hezel looks at the record to find out how the Pacific Island nations have fared in this respect since independence. Having abundant exports doesn't always translate into a strong economy, he finds, since the two most richly endowed countries in the region are among the poorest in quantified per capita income. Most of the nations in the region, though, are resource-poor and so have had to turn to other strategies for economic development. The pathways to economic development for a small island nation, especially one that is remote and enjoys limited resources, are few and steep. Only one of the Pacific Island nations is close to full economic self-reliance at present, while one or two others may be within striking distance. The rest--and they are the majority--seem to have no real prospects for full self-reliance. Hezel asks what this somber but realistic view of the limits of economic growth in the Pacific might mean for larger nations with a stake in the Pacific, such as Australia, Japan, the United States, and China. Foreign aid, he suggests, may not be just a stopgap to achieve economic self-sufficiency, but a permanent requirement for nations that will always come up short of this goal.
International trade is vital for economic prosperity in Pacific island countries, but their trade performance has been weak over the past decade with the exception of resource-rich countries. Small country size and remoteness from global economic centers may have contributed to this relatively poor performance. However, the emergence of Asia as a global economic center presents Pacific island countries with an unprecedented opportunity to develop trade with Asia, particularly in tourism for a number of PICs. Moreover, if a strong two-way linkage is established between tourism and agriculture, Pacific island countries stands a better chance to improve broad-based growth.
This sixth annual study focuses on the effects of globalization on developing countries and the growing divide between fast and slow- integrating economies. It describes current trends in integration and answers key questions on trade and on commodity-reliant economies. The book examines two questions in particular detail: Will trade liberalization work? The report argues that countries that embark on trade liberalization in the current environment are likely to be rewarded and recognizes that genuine adjustment costs exist and that complementary reforms are important. How can commodity-reliant countries enhance productivity and diversify exports? Although many of these countries have been among the high growth, fast integrators, many others have been poor performers. Successful exporters are characterized by high productivity in existing commodity sectors, the capacity to diversify to non-traditional commodity exports, and the maintenance of economic stability. The report projects continued rapid acceleration of integration over the next decade, with moderate import growth in the developed countries and continued sharp import increases in developing countries. Those countries that continue to reform their economies and expand their participation in the world economy will be in a position to take advantage of the resulting opportunities; those that do not, risk falling further behind.
Pacific island countries face unique challenges to realizing their growth potential and raising living standards. This book discusses ongoing challenges facing Pacific island countries and policy options to address them. Regional cooperation and solutions tailored to their unique challenges, as well as further integration with the Asia and Pacific region will each play a role. With concerted efforts, Pacific island countries can boost potential growth, increase resilience, and improve the welfare of their citizens.
