By Caleb Jarvis
As a young boy growing up in Papua New Guinea (PNG), every Saturday Dad would drive up a windy road that overlooked 2-Mile settlement in Port Moresby, where people went about their daily lives. Looking out the window of our 1978 Toyota Corolla as we climbed the hill, the vibrant colours and the glistening tropical waters are forever etched in my memory. Dad and I were on our way to Taurama to collect the international newspapers and a Phantom comic, which arrived every week from Australia. As we reached our destination, there was a mass of people and all I could see was blood splattered all over the walls and across the road. Seeing the terror on my face, my father calmly explained that is was the stain from buai (betel nut) chewing and not to be concerned. PNG was certainly an exciting place to spend my childhood years. Having worked in the Pacific for more than 25 years, I have returned often to Port Moresby and marvelled at the bustling modern city it has become. The developments in the broader region have also been huge, particularly over the past ten years.
As Pacific Trade Invest (PTI) Australia celebrates its fortieth anniversary this year, it’s an ideal time to reflect on how these developments will shape the next 40 years of trade and investment in the Pacific.
Below are what I see as some of the greatest changes in the past 40 years, and what the next 40 years must bring for the Pacific to grow and meet its enormous potential.
The changing nature of connectivity
The Pacific once felt isolated. Now it’s more mobile and global than ever before. When my family operated its business in PNG there was no internet or mobile phones and two-way radios were the norm for communication.
According to the GSMA’s Pacific Islands report, the region’s unique mobile subscriber base increased from 2.3 million in 2009 to 4.5 million in 2018.
By 2020, the economic contribution of mobile technology to the region’s GDP is expected to reach 6 per cent – with mobile services driving development in financial inclusion.
Now, thanks to sea cables, internet and mobile phone proliferation, the Pacific’s window to the world has increased the Pacific’s appetite to move regionally and globally. The flow of global information through Facebook, YouTube, Google and music has had an enormous impact on, and greatly influenced, the lives of Pacific people, especially the younger generations.
From a trade perspective, established and aspiring businesses in the Pacific have new affordable channels to access international markets, customers and information. They know what is being traded, where, and for how much – particularly important for economies heavily reliant on exports.
Right now, small- and medium-sized enterprises (SMEs) in the Pacific still face barriers around small parcel logistics and affordable payment systems limiting their ability to take full advantage of digital connectivity.
Connectivity and technology are giving rise to a wave of new micro-enterprises. For example, locals can now use platforms such as Airbnb to generate additional family income.
It’s vital that investment in technology and improvements in the region’s connectivity and digital capacity building continues so that the Pacific can compete in global supply chains and find further efficiencies domestically.
Whether it’s selling goods, providing services or promoting tourism, the Pacific must be able to participate and promote itself digitally. It’s exciting to see this next generation of Pacific entrepreneurs already translating ideas into a Pacific context, for example GoFood in PNG, Cyber Food in Fiji and Seki eats in Samoa – all Pacific versions of Uber Eats.
In time, the improvements in connectivity and technology will enable significant advances in the delivery of education and health services to those in remote areas of the Pacific.
The changing nature of mobility
Deregulation of air services has resulted in more incoming and outgoing flights from the Pacific at more affordable prices.
Australia must embrace its neighbours in a sustainable and respectful manner. A new significant factor in worker mobility is Australia’s commitment to the Pacific Labour Scheme (PLS), which allows semi-skilled Pacific Islanders to work in regional and rural Australia for up to three years.
This will provide them with the opportunity to earn income and develop skills under the guidance of experienced professionals – something they can take with them and apply in their future work. The initial success seen through the pilot program has been immense both for the Australian employers and the Pacific workers.
Personally, the PLS is one of the greatest initiatives I’ve witnessed over the past 25 years of working across the Pacific. Under the scheme, Pacific workers are able to generate significant income and continue their learning while gaining international experience. There is much still to be done, but we must adopt a long-term view and give it the time and support it needs to achieve its potential.
The range and volume of exports from the Pacific has evolved enormously. Be it extractive industries, coffee, cocoa, fish, coconuts, root crops or bilum weaved goods, the Pacific has continually found ways to export its goods to the world.
With continued advances in connectivity, education and mobility, the Pacific’s exports can expand beyond physical goods to include services, knowledge and intellectual property.
Take, for example, the growing global interest in kava. Nobody is better positioned to share knowledge and lead the development of this growing industry than Fiji and Vanuatu.
In the future, Pacific enterprises need to value add their exports and move away from traditional export of commodities. Enterprises need to be consistent, improve quality and learn to tell the world their amazing stories. This will in turn allow them to charge premium prices to offset higher logistics costs due to the natural isolation of the Pacific islands.
Doing it the Pacific way
To ensure the Pacific plays to its strengths, it must use its resources, tourism assets, fertile land, abundant water, traditional knowledge and affordable labour force to support change and growth. This must be achieved in a way that respects the region and, more importantly, understands and works within the context of rich and diverse cultures and traditions.
PTI Australia must evolve and recognise that the support and advice we are asked for will change. Soon it may not be export advice related to physical goods, but advice on how to protect and sell intellectual property, how to sell and connect to digital marketplaces, and how to support the movement of Pacific Islanders to good work, temporary or long term, overseas.
While there is much work to be done, we can be certain that the next 40 years is going to be incredibly exciting for the Pacific.
Caleb Jarvis is the Pacific Trade Invest Australia’s Trade and Investment Commissioner. Founded in 1979, PTI Australia is an agency of the Pacific Islands Forum Secretariat, funded by the Australian Government, that facilitates trade and investment in the Pacific islands.
This article first appeared on the DevPolicy Blog, published by the Development Policy Centre at the Crawford School of Public Policy, The Australian National University
Australian Prime Minister Scott Morrison will be at this year’s Pacific Islands Forum leaders meeting in Tuvalu, and Foreign Minister Marise Payne says she is keen to get to Papua New Guinea soon “to visit our new friends in government.”
Minister Payne made the comments in a speech before media and diplomats at a Press Club lunch in Suva today.
The Minister was in Fiji just a week after being sworn in as Minister for Foreign Affairs and Minister for Women, following the Liberal/National coalition’s win in Australia’s recent federal election. This week Prime Minister Scott Morrison has also been in Solomon Islands, meeting with the new government of Manasseh Sogavare.
Minister Payne says both visits show the importance of the Pacific islands to Australia.
She revealed that Australia has begun work on a joint trade and economic scoping study to look at creating more opportunity for Australia and Fijian businesses.
“That work began literally last week and is going to be finalised by the end of July. I very much look forward to the findings of the independent team that will shortly be in Fiji to engage with government and the business community.”
Australia’s record on climate change and the lack of ambition in its targets to cut emissions has been widely criticised by Pacific leaders. However today Payne said: “For Australia’s part, we are on track to meet – indeed to exceed – our commitments to the year 2020 under the Paris Agreement, and making progress towards our 2030 target,” while also commending Fiji Prime Minister Voreqe Bainimarama for his leadership in climate change negotiations.
Minister Payne’s program also involved visits to the Blackrock Camp in Nadi, breakfast with female MPs, and a meeting with advocates against gender based violence at the House of Sarah.
Details of a possible visit to meet with PNG’s new Prime Minister, James Marape and his cabinet, will be announced at a later date.
Writing about the future of the Pacific Islands Forum (PIF) in this magazine last month, I concluded: “Economic union will come in due course when we deepen regional integration, specifically regional economic integration,” and added that “some structures that will bring this about have been created through our efforts at regional cooperation via the establishments of committees.” I then named the various committees and the private sector body involved.
Pacific Islands Forum Secretary General, Dame Meg Taylor, enlightened us on how to progress with regional integration when she spoke as an Observer at the Asia-Pacific Economic Cooperation (APEC) meeting in Port Moresby on 15 November 2018. She said: “In the Pacific we take a more expansive view of regional integration that extends beyond simple economic or market integration…….Indeed, our approach to integration is unique – the catalyst being Forum Leaders endorsement in 2017 of the Blue Pacific narrative as the core driver of collective regional action in the Pacific. Grounded in the strength of our collective will, the Blue Pacific narrative emphasises action as one ocean continent, based on our shared ocean identity, geography and resources.”
The above statement is loaded and somewhat pedantic. This article unpacks the various issues and forges a way forward on how we can effectively implement and achieve our own resolutions.
The economic union I wrote about is still very much in the mix, judging from Dame Meg’s statement. Economic union comprises a common market. The Forum’s regional integration proceeds beyond market integration, the Secretary General said. I did however write that such market integration is yet to be fully formed in the region.
Moving forward from here does not necessarily mean that we ignore the deficiencies of the past. PIF needs to re-visit its market integration agenda and implement relevant reparations to strengthen its integration bases before it builds further on it. What is needed is that all planned reparatory and foundational structural work directed at future regional integration is carried out on the basis of its Blue Pacific narrative.
As far as PIF’s Free Trade Agreements (FTAs) are concerned – the Pacific Island Countries Trade Agreement (PICTA) for the Forum Island Countries (FICs) and the Pacific Agreement on Closer Economic Relations (PACER) Plus for all members including Australia and New Zealand, the Blue Pacific narrative requires our ‘collective action’; and this should be directed at addressing the still outstanding ratification and implementation of these agreements. Essentially, this is action taken together by members to enable them to implement the agreements and trade freely amongst themselves, and more; enabling an individual member and the group to benefit from regional economic integration.
In terms of PICTA - its Trading in Goods agreement is currently being implemented by less than half of the FICs. Negotiations on its supplementary agreements in Services and Investment are still a work in progress; and this has been ongoing since 2001 when PICTA was first signed and 2004 when FICs Leaders endorsed extension of the PICTA to include Services and Investment.
Such lethargy needs addressing. Clearly, a boost of collective adrenalin from the Blue Pacific narrative is needed here to reinforce and rejuvenate the ‘collective will’ and ‘collective action’ in order to ‘recapture the collective potential’ of the economic integration we all aspire to achieve under Pacific regionalism.
PACER Plus, on the other hand, has proved divisive already. Fiji and Papua New Guinea have pulled out of the agreement. Others may do so in due course. This, clearly, is a blight against the Blue Pacific’s ‘one ocean continent’ approach. Further, it is a blight against ‘collective action’. This is a recipe for reduction in the collective benefit to all.
What is the Forum going to do to bring about the unity it desperately promotes? What specific actions will it take to enable the Blue Pacific narrative to boost and drive the unity it needs given the divide that has already emerged?
What are Australia and New Zealand— the Forum’s developed countries and OECD members, going to do in the same spirit of unity? Will they, in the spirit of give and take, and teamwork, return to the trade negotiations to inject much-needed pragmatic concessions and/or an array of special and differential treatments that may have been sidelined previously?
Implementation of these agreements will require all FICs to readily abolish trade barriers, and other barriers relating to movements of capital and personnel that exist amongst us. We may be further persuaded to consider establishing relevant institutions from pooling of our resources aimed at regionalising specific activities for economic integration. This is the regional integration we all seek.
It will require also, at the national levels, the enabling environment re-enforced with concomitant laws and regulations aimed at achieving sustainability of procedures and benefits under these agreements. Such regulatory and legal requirements are provided for under the Framework for Pacific Regionalism.
The sustainability being sought is the essence of the Blue Pacific narrative. Further, it is the essence of green policies that is fundamental in any land-based development. I tweeted recently: “Lest we forget, protecting our Blue Pacific, our Livelihood and our Home obliges us to guarantee green policy on land in every sector of life. Any shade of colour other than green will eventually tarnish the land that feeds us and will muddy the bluenessof our ocean.”
Such pragmatism will bring immediate benefits through utilising the various trade preferences built into these agreements; and economic development consistent with regional aspirations—our collective will—are likely to be facilitated. This will advance the Leaders’ vision of a region of social inclusion and prosperity. It will underline Blue Pacific’s ‘collective regional action’, grounded in our ‘collective will.’
Furthermore, a Common External Tariff (CET), envisaged by our early Leaders, resonates unity amongst PIF members and underscores our efforts at creating a ‘one ocean continent’, based on our ‘shared ocean identity’ and ‘geography.’ There are options in its application. If configured under PICTA, for example, then FICs need to consider Australia and New Zealand’s special positions as major trading partners whose preferential treatment is ensured under PACER Plus. If CET is configured under PACER Plus, then caution is called for. The issue can be somewhat complex given Australia and New Zealand’s numerous FTAs with other regionsand major global trading partners.
A NEW shipping service combined with the upgrade of liner networks will open up key markets in the Asia-Pacific region. Swire Shipping General Manager, James Woodrow, said Asian markets were integral to trade in the Pacific.
“For example Fiji sends a lot of sugar and now minerals by ship to Asia and there is a lot of trade in the opposite direction,” Woodrow said. Speaking to Islands Business after taking over the operations of Pacific Agencies and opening Swire’s re-branded Fiji offices, Woodrow said he was confident of the way forward. “We are looking at slowly expanding our business in Fiji,” Woodrow said.”
“We owned 50 per cent of Pacific Agencies and Swire has now taken over the entire business. “And we are very proud of the excellent staff Swire has in place in Suva and Lautoka. “We are continuously looking at ways to upgrade our services and network to offer greater frequency, faster transit time and better coverage for our key markets.’ Fiji will provide a vital hub for Pacific exports because of its accessibility to small island countries.
And its large manufacturing base ensures sufficient cargo for shipping companies to move on return voyages. Swire owns the China Navigation Company, which has been operating in and through Fiji since 1958. Its current service provides links to Australia, Papua New Guinea, Singapore, South East Asia, China, Korea and Japan...
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JUNE 14, this year, marked the signing ceremony of the Pacific Agreement for Closer Economic Relations (PACER-plus) Trade Agreement in Tonga. The ten countries that signed the agreement included; Australia, New Zealand (the “Plus”), Samoa, Solomon Islands, Nauru, Tuvalu, Kiribati, Cook Islands, Niue and Tonga.
That event should have been a keystone Pacific Islands ceremony, and it could have been deferred, given the torrid conditions that had prevailed in the recent “good faith” trade negotiations amongst the Forum Member countries and the conclusive meeting in April, held in Brisbane, Australia. Fiji didn’t sign and could be excused, due to its Government’s decision not to re-join the Forum and had established an alternative organisation.
In my commentary, I deliberately will not talk about the technicalities of a “Free” trade agreement, as an instrument for enhancing closer economic relations in the Pacific, but I offer a personal reflection on my disbelief and disappointment that the key principles of governance and leadership, that have been the cornerstone of the Pacific Islands Forum, for more than four decades, have been diminished and ignored. PACER-plus was to be an umbrella, multilateral trade agreement between Australia and New Zealand (combined) with the 12 Pacific Island Countries, but it has now become an agreement for trade cooperation,