sustainable-and-inclusive-growth_mr-anthony

Sustainable and Inclusive Growth – Pacific PerspectiveBackground The Pacific is a very diverse region with Island Countries scattered far apart and isolatedfrom major industrialised coun

SUSTAINABLE AND INCLUSIVE

GROWTH Pacific Perspective

Mr Felix ANTHONY National Secretary Fiji Trades Union Congress

Sustainable and Inclusive Growth – Pacific Perspective

Background

The Pacific is a very diverse region with Island Countries scattered far apart and isolatedfrom major industrialised countries These countries are small in size both in land area andpopulation and vary in cultures and traditions This creates a major challenge for the Islandstates for sustainable development The main industries in the region are tourism, fisheries,forestry and agriculture and more recently human resources

The region is made up of 14 small island developing states (SIDS) These are the FederatedStates of Micronesia, Papua New Guinea, Palau, Solomon Islands, Nauru, Tuvalu, Samoa, Fiji,Vanuatu, Tonga, Kiribati, Republic of Marshal Islands, Cook Island and Niue Of these islandstates, Kiribati, Samoa, Solomon Island Tuvalu and Vanuatu are classified as least developedCountries (LDC’s)

Main Economic Activities of Pacific Island Countries

Cook Islands Fruit-processing, Tourism, Finance, Copra, Citrus fruit, Clothing, Coffee,

Fish, Pearls and pearl shells, Mining,Handicrafts

FSM Tourism, Construction, Fish processing, Craft items (shell, wood, pearls),

Garments, Bananas, Black pepper

Fiji Sugar, Tourism, Copra, Gold, Silver, Clothing, Timber, Fish processing,

Cottage industriesKiribati Fishing, Handicrafts, Copra

Marshall Islands Copra, Fish, Tourism, Craft items (shell, wood, pearls), Offshore banking

(embryonic), Coconut oil, Trochusshells

Nauru Phosphate mining, Financial services, Coconut products

Niue Tourism, Handicrafts, Food processing, Finance, Coconut cream

Palau Tourism, Craft items (shell, wood, pearl), Commercial fishing, Agriculture.PNG Copra crushing, Palm oil processing, Plywood production, Wood chip

production, Mining of gold, silver, andcopper, Crude oil production, Construction, Tourism, Timber, Coffee, Cocoa, Seafood

Samoa Timber, Tourism, Food processing, Fishing, Coconut oil and cream,

Copra, BeerSolomon Is Timber, Fish, Palm oil, Cocoa, Copra

Tonga Tourism, Fishing, Squash, Fish, Vanilla, Root crops, Coconut oil

Tuvalu Fishing, Tourism, Copra; Stamps/coins

Vanuatu Fishing, Offshore financial services, Tourism, Food and fish freezing,

Wood processing, Meat canning;

Coconuts, Cocoa, Coffee

Source: ADB Annual Reports, ABC World Fact Finder, SPC Pocket Statistical Summary (1998)

The Mauritius Strategy

An International Meeting on Small Island Developing States (SIDS) was held in Mauritius inJanuary 2005 This Strategy is the current UN sustainable development strategy for SmallIsland States for the period 2005-2015 The strategy was adopted for the small island states

by all members of the UN, including donors This strategy recognized the special situationand vulnerabilities in relation to the intensity and frequency of natural and environmentaldisasters and their impact on the SIDS These countries face disproportionately higheconomic, social and environmental consequences The strategy comprises of the followingpriorities that needed to be addressed by the individual states and through regionalcooperation

1 Climate change and sea level rise

2 Natural and environmental disasters

10 Transport and communication

11 Science and technology

12 Improve status from least developed states

13 Trade – globalization and liberalization

14 Sustainable capacity – development and education

15 Sustainable production and consumption

16 National and regional enabling environment

The region witnessed reasonable progress on the strategy and the implementation is work inprogress However, much assistance is needed by the SIDS in terms of capacity building andresources.

The critical requirement in the implementation of the Mauritius Strategy was to ensure thatenabling governance structures were developed together with planning and regionalcooperation The Pacific Island Forum Leaders committed themselves to the development ofNational Sustainable Development Strategies (NSDS) within their respective countries EachCountry had different timeframes for their implementation programs This ranged from2years to 10years (2006-2015) Some Countries had 2 year plans, others had 4-5 year plansand a few like Tuvalu and Vanuatu had 10 year plans There is no doubt that these SIDS arecommitted to their sustainable development plans but lack the resources and capacity tofully address the priorities Assistance has been sought in many cases from internationalorganisations in the implementation

The Pacific Forum Island Leader also adopted a Pacific Plan at around the same time as theMauritius Strategy This plan was to compliment the Mauritius strategy for the PICs Theobjective of the plan was summerised in the four main goals that was identified as:

1 Enhance and stimulate economic growth

i Increased sustainable trade (including services), and investment

ii Improved efficiency and effectiveness of infrastructure development andassociated service delivery

iii Increased private sector participation in, and contribution to, development

2 Sustainable Development

i Reduced poverty

ii Improved natural resource and environmental management

iii Improved health

iv Improved education and training

v Improved gender equality

vi Enhanced involvement of youth

vii Increased levels of participation and achievement in sports

viii Recognized and protected cultural values, identities and traditional

knowledge

3 Good Governance

i Improved transparency, accountability, equity and efficiency in themanagement and use of resources in the Pacific

4 Security for Pacific Countries through regionalism

i Improved political and social conditions for stability and safety

Reviews on progress on the plan are done periodically and reports prepared on a sixmonthly basis Additionally, an independent comprehensive review of progress will beconducted every 3 years The plan has a general time frame of 10 years but may be reviewed

by leaders for its relevance The last review was conducted in 2009 for the cycle periodending in 2012

The 2010 progress report on the Pacific Plan is built around five themes and priorities set forthe years 2010-2012

1 Fostering economic development and promoting opportunities for broad based growth.

i) On Trade, support continued to Member States to facilitate their domestic

readiness to trade under the Pacific Island Countries Trade Agreement (PICTA)and the Pacific Agreement on Closer Economic Relations (PACER) The process toestablish the Office of Chief Trade Advisor (OCTA) commenced with the aim toprovide Member States with greater access to advice on PACER Plus

ii) Infrastructure was addressed through the Regional Maritime Programme

focusing on the integration of port development

iii) Fisheries- the Pacific Island Forum Fisheries Agency (FFA) AND the secretariat of

the Pacific Community (SPC) were strengthened and their strategic and workingrelationship to ensure effective fisheries sector assistance to countries

iv) There were also development within the energy sector, tourism, transport and

information and communication technology (ICT)

2 Improving the livelihoods and well being of the Pacific peoples.

Efforts were mainly focused in this area in food security, health mainly in the area on noncommunicable disease and HIV/AIDS, education reform (Pacific Education DevelopmentFramework), gender-based violence by strengthening legal frameworks and publicadvocacy and addressing the needs of people living with disabilities

3 Addressing impact of climate change

Advocacy for the plight of SIDS at the Copenhagen Summit (2009) to tackle theimpact of climate change including the rise in sea levels that threaten the veryexistence of some member states SIDS will continue its efforts to find a long termsolution

4 Achieving stronger national development through better governance

The Cairns Compact in 2009 reflected the leaders renewed determination to lifeconomic and development performance of the region and to achieve real progressagainst the Millennium Development Goals FIC’s started the process of reporting ontheir national plans, development partners reported on their efforts to reduce aidfragmentation and improve on its effectiveness.MDG Tracking Report was developedtogether with the road map on strengthening public finance management Otherareas complementing these efforts were the strengthening of the collection ofstatistics for better informed national policy, improvement of access to officialinformation, strengthen accountability and integrity of institutions and addressingcorruption

5 Ensuring improved social, political and legal conditions for stability, safety and

security.

Greater coordination was achieved by law enforcement agencies on PacificTransnational Crime Assessment A working group on terrorism was convened.Discussions were held with CSO’s on conflict, peace and security issues A humanrights adviser was appointed in 2010 to coordinate the implementation of the humanrights objectives of the Pacific Plan

The 2011 Progress report on the Pacific Plan noted:

i) That in the fisheries sector, regional maritime surveillance operations were

conducted to detect illegal, unreported and unregulated fishing

ii) In the area of climate change, the establishment of the Council of Regional

Organisation of the Pacific (CROP) subcommittee on climate change tocoordinate efforts of regional agencies A major study on options to improveaccess to and management of climate change financing was completed by theForum Secretariat A region wide consultation was held in March 2011 in Niue

at the Pacific Climate Change Roundtable to identify more effective ways to

tackle climate change Agreement was reached at the meeting oncoordinating regional responses by establishing working groups on mitigation,adaptation and mainstreaming climate change resources, and climate changeinformation and knowledge management.

iii) The Education Ministers endorsed the implementation strategy for the Pacific

Education Development Framework This was aimed at strengthening thequality and relevance of education across the region Work commenced on abaseline survey to obtain accurate information on the status andrequirements of education systems in the Forum Island Countries

iv) Holding peer reviews In Vanuatu, Niue and Tuvalu in 2011 as part of the

implementation of the Forum Compact and Strengthening DevelopmentCoordination for the Pacific A key outcome of the reviews was on concreteactions to improve development coordination The review was also animportant tool for sharing experience in the region

v) Regional accountability was strengthened through the Pacific Regional Audit

Initiative (PRAI) and the Pacific Ombudsman Alliance

vi) Completion of the majority of the Regional Institutional Reforms that had

been underway since 2005 This included the merger of Pacific IslandsApplied GeoScience Commission and the South Pacific Board for EducationalAssessment into the Secretariat of the Pacific Community (SPC)

While there have been progress under the Pacific Plan in 2010 and 2011, majorchallenges remain Negotiations on trade agreements under the Pacific IslandsCountries Trade Agreement (PICTA), Pacific Agreement on Closer Economic Relations(PACER Plus) and the Economic Partnership Agreements with the European Union(EU EPA) remain difficult and complex

The Pacific Plan has played a key role in creating an environment needed to achievesustainable development goals and this was recognized in the 5 year review of theMauritius Strategy It is however important to recognize the impact of the globaleconomic meltdown and its impact on the SIDS Most SIDS experienced a lowereconomic growth during the period 2009-2011 as the crises worsened The directimpact was felt through:

1 Lower Commodity prices and demand for exports

2 Fall in remittances and off-shore demand for labour

3 Decline in tourism numbers

4 Decline in private investments

5 Decline in aid

Pacific Island Countries and EU Coorporation

At the core of EU-Pacific partnership in cooperation on climate change; the single greatestthreat to the region Since the EU and the Pacific Islands Forum adopted the JointDeclaration on Climate Change in November 2008, EU-Pacific cooperation on climate changehas substantially, both politically and financially

The EU and its Member States are the largest donor worldwide and the second in the region,afer Australia

EU development cooperation with Pacific ACP countries and OCTSs (Overseas Countries andTerritories) managed by the Commission is estimated at 750 million Euros for 2008-2013 EUaid is funding bilateral assistance programmes as well as Regional Programmes managed byPacific Regional Organisations

On top of resources for development and climate change initially allocated to the Pacific,ACP countries for the period 2008-2013, the EU has made available a financial package of

110 million Euros in additional climate related resources committed by the Commissionsince 2008.(see annex EC Memo / 12/435)

REGIONAL ECONOMIC UPDATE

1 Although the current economic crisis has reduced growth prospects for most leading economies, at this stage the consensus view suggests that the Pacific region will experience less significant impacts In part, this is due to relatively optimistic Australian and New Zealand economic prospects However, growing inflationary pressures as well as indirect effects from the economic crisis will contribute to downside risks to the region

2 According to the December 2011 edition of the ADB Pacific Economic Monitor,growth projections for most FICs in 2011 and 2012 are expected to be weak However,some relatively positive performances are expected to come from PNG, SolomonIslands, Nauru and Vanuatu (See Figure 1)

GDP Growth for FICs 2011 2012 Inflation prospects for FICs 2011 2012

PNG PNG

Figure 1 Source: ADB Pacific Economic Monitor Figure 2 Source: ADB Pacific Economic Monitor

3 With a projected growth rate of 8.5 percent in 2011 and 6.5 percent in

2012, the strong growth forecast for PNG stems from construction associated with theLNG project which will reach its peak in 2012, along with the resumption of nickel andcobalt mining.4

4 Favorable commodities prices coupled with strong commodity exports,particularly logging, and the resumption of gold production also secures a betteroutlook for the Solomon Islands with 7.5 percent growth expected in 2011 and 4

6 An economic growth outlook of 3 percent in 2011 and 4 percent in 2012 for Vanuatu

is expected to be driven mainly by increased tourist arrivals, with contribution also comingfrom growth in its construction sector

7 Samoa’s economy is expected to grow by 2.1 percent in 2011, and 3 percent in 2012reflecting strong growth in the construction sector as a result of the post-tsunamireconstruction, as well as improvement in remittances and modest growth in tourismrelated activities

8 The Kiribati economy is expected to grow by 2 percent in 2011 and 2012 primarily as

a result of donor-financed infrastructure investments

9 Palau’s economy is expected to grow by 2 percent growth in 2011 reflecting arecovery in tourist arrivals However in 2012 growth for Palau is expected to slow to 1.5percent suggesting a reflection of weaker outlook in the country’s main tourism sourcecountries

10 Fiji’s economy is expected to grow by of 1.2 percent for 2011 and 2012, howeverrecent investments linked to the mining sector could improve its prospects going into 2012

11 The Cook Islands economy is expected to grow by 1.1 percent in 2011 However, anexpected strong resurgence in tourist arrivals for 2012 from NZ and Australia are expected toimprove its growth prospects to 3.3 percent

12 For the other FICs, growth prospects are expected to remain low for 2011 and 2012

13 Driven by high fuel and food prices, an average inflation rate of about 4 percent isexpected across all FICs in 2011 (see Figure 2), increasing inflationary pressures andcontributing to downside risks for the region Effects of the global economic crisis althoughlimited at this stage, could also affect growth prospects for the region indirectly, throughtrade and investment linkages between the EU and the Pacific’s economic partners,declining

values of Pacific trust funds, and possible declines in tourism and remittance flows fromother markets such as the US and Japan.5

14 However, the robust outlook over the short term in the major FIC trading partnereconomies of Australia and NZ support an anticipated increase in tourism to the Pacific.Tourist numbers from Australia and New Zealand have increased substantially since the firstquarter of 2011 The number of Australian tourists increased for most Pacific destinationsand was strongest in Samoa at 24 percent and in Fiji with 13 percent The number of NewZealand tourists to Samoa and Vanuatu declined over the same period, but this was morethan offset by higher departures to the Cook Islands, Fiji, and Tonga

Source: Pacific Island Forum: Update Series on Current Economic Issues

Civil Society and Sustainable Development

Civil society is active at the local and regional level in the region These organizations vary insize, capacities, competencies etc These are mostly Trade Unions, NGO’s, community basedorganizations, and faith based organizations The Pacific Island Forum has grantedconsultative status to a wide range of CSO’s They are South Pacific Oceania Council of TradeUnions (SPOCTU), Council of Pacific Education (COPE), Pacific Disability Forum (PDF),Foundation of the People of the South Pacific (FSPI), Greenpeace, Pacific Foundation forAdvancement of Women (PACFAW), Pacific Concerns Resource Centre (PCRC), Pacific IslandsAssociation of NGO’s (PIANGO), Pacific Island News Association (PINA), Pacific Conference ofChurches (PCC), World Wildlife Fund South Pacific Program (WWF-SP) and Pacific Network

on Globalisation (PANG) These CSO’s take part in regular consultations with the Forum ThePacific Island Private Sector Organisation (PIPSO), formed in 2005, whose members comprise

of national private sector organisations

The CSO’s , PIPSO and the Forum recognize that sustainable development in the region isonly possible through the effective participation and partnership of governments in theregion, civil society, regional organizations and development partners While this recognition

is well engrained, capacities need to be further developed amongst the partners to realizethe full benefit of the partnership for the region These include:

i Empowering people and communities and directly engaging young people asagents of community –based change

ii Strengthening our ability to manage knowledge both indigenous and based

science-iii Improving our ability and procedures for planning

iv Developing effective partnerships between local and national levels with CivilSociety

v Influencing resources flows so that they provide the incentives for sustainabledevelopment

vi Valuing the environment appropriately

The 42nd Pacific Islands Forum held in Auckland 7-8th September 2011, the leaders reaffirmedtheir commitment and work with Civil Society The communiqué stated “Leaders welcomed the Secretary General’s initiative to convey the views of civil society on a range of challenges facing the Pacific Leaders recognised many of the issues identified by civil society were ones already on the regional agenda Leaders highlighted this commonality and noted that meaningful engagement with civil society was vital in finding the best path forward Leaders tasked the Secretariat to determine, as appropriate, practical means to ensure civil society perspectives continue to be reflected in Forum policy formulation and are able to be conveyed to future Forum Leaders’ meetings” (see Annex 2 Waiheke Declaration)

Access to Financial Aid

The region receives approximately 1b annually in aid assistance from various countries Themajor contributors being Australia, New Zealand, The European Union, United States andJapan There are other donors like France, Canada, UK and other International FinancialInstitutions Aid effectiveness has been a major concern The Pacific Aid EffectivenessPrinciples are consistent with the 2005 Paris Declaration on Aid Effectiveness While theseprinciples are not binding, they are being respected generally, in many cases through theinsistence of the donors

Indicative Net Aid to the Pacific SIDS in 2007

Net ODA (USS millions) ODA/capita (US$) ODA (%GDP)

Regional Aid 138.7 n.a n.a

Pacific Aid Total 1165.9 136 9

Source: AusAID 2009: Tracking Development and Governance in the Pacific

Indicative Sources of AID to Pacific SIDS (Excluding Timor Leste) 2007

Development Partner Total (US$millions) % of all sources of aid

Source: AusAID 2009: Tracking Development and Governance in the Pacific

There have been a number of times where it has been recognized in this report that the SIDSlack the capacity to carry out the strategies and plan set out in various agreements This is in

no way due to the lack of commitment on part of the SIDS but rather lack of technical andmanagerial skills Capacity building in the SIDS is vital for the SIDS to successfully implementsustainable development strategies Efforts have been made in this area through fundingfrom various Governments In this regard a SIDS University Consortium was set up in 2005

to address the short comings Other initiatives such as the Pacific Regional QualificationsRegister (PRQR), The Pacific Association for Technical and Vocational Education and Training(PATVET) and the Australia Pacific Technical College was also undertaken

(refer ESCAP Report Sustainable Development in Pacific- progress and challenges)

Governance and regional Politics

This has been a major obstacle to the SIDS quest for sustainable development Politicaluncertainty in some countries such as Fiji, Papua New Guinea, Solomon, Vanuatu (to a lesserextent) have been a constant issue with investment in the countries and development Fijihas experienced 3 military coups, the latest being 2006 and remains under military rule PNGhas constantly been unable to have a stable government with a vote of no confidence insuccessive governments being tabled in parliament frequently The rule of law and securityhas remained a constant challenge for PNG and continues to remain so More recently, anattempt by some within the military to intervene in a political stalemate was defused.Similarly, the Solomon Islands have witnessed political instability with change in thecountry’s leadership frequently In all these countries accountability and transparency inGovernment have remained a constant challenge While efforts through internationalagencies have been made to attempt to strengthen accountability and democracy in theregion, there still appears to be a long

road ahead Regional cooperation with Australia on strengthening the Pacific TransnationalCrime Network, money laundering, child labour, drug transshipment have had success,internal discipline in good governance principles within the states still lacks both the willand/or commitment by leaders to address this serious issue Democracy has also remained achallenge for some of the SIDS This is largely due to traditional and cultural demands on theindigenous populations in these countries However, this is becoming less of a problem asthe younger generation has a greater opportunity to education and improvedcommunications in the region The rise of Trade Unions, NGO’s and community basedorganizations has contributed much in this area