PACIFIC Island countries are approaching a demographic turning point, but the region’s growing youth population will only become an economic asset if governments can create more and better jobs.
World Bank economist Ruth Nikijuluw said the Pacific faced a difficult backdrop of slowing growth, tighter fiscal space and an energy shock, but called the region’s young population a potential silver lining.
“The Pacific has this untapped demographic asset, which is their youth,” she said, sharing that the region needed a “jobs agenda” to turn that wave of young workers into long-term growth.
Her comments were made as the World Bank outlined a regional jobs outlook for Pacific Island economies, advising that labour force participation remains low, especially for women, and that many young people are neither in school nor in work.
Describing the gap as wider than in other parts of East Asia and the Pacific, she said: “Across Pacific countries, female labour force participation is about 20 percentage points lower than male participation on average.”
She also highlighted a persistent problem in youth employment.
“About one in five young people in the region are not in education, employment or training, and in countries including Vanuatu, Kiribati and Nauru, the share is far higher, reaching 35–41 per cent.”
Referring to the region’s stalled NEET rate over the past two decades, she said: “There is no significant improvement.”
Nikijuluw said the problem was not just the number of jobs, but the quality of job creation.
“In some economies, growth has been driven by construction and reconstruction after repeated shocks, but those sectors are not labour-intensive enough to absorb the expanding workforce,” Nikijuluw said.
“Many workers leaving agriculture are moving into low-productivity services rather than higher-value sectors such as tourism, business services, finance and tradable services.”
She added that the private sector was constrained, citing three main barriers: low investment, high business costs, and limited access to finance.
“Public spending is being squeezed by current expenditures, leaving less room for investment in roads, water and energy infrastructure that businesses need,” Nikijuluw said.
“Unpredictable licensing and permit processes raise costs and can discourage new firms from entering the market.
On finance, she said small firms remain blocked by weak collateral, limited credit history and the added risk of natural disasters.
Nikijuluw said the policy answer is a fundamental shift toward a jobs-first model of growth.
“A youth wave can only become an opportunity to drive growth when it’s matched with job creation, higher participation and policies to unlock productive sectors,” she said.
“The Pacific governments have a narrow window to act before the region’s demographic opening closes.”
