“For the Pacific, the impact of climate change will remain as the greatest threat to our Pacific people in the longer term. You can quarantine COVID-19, but climate change cannot be quarantined.”
That’s Exsley Taloiburi, climate change finance adviser at the Pacific Islands Forum Secretariat in Suva.
This month, the annual Forum Economic Ministers Meeting (FEMM) went online, to discuss the regional response to the coronavirus pandemic. The meeting focussed on the social and economic effects of border closures, increased health spending, the collapse of tourism and associated job losses. But Forum Secretary General Dame Meg Taylor was quick to acknowledge the region was dealing with compounding and interconnected challenges: “Today, we are now faced with three crises: a health crisis, an economic crisis and the ongoing climate crisis.”
The final FEMM outcomes statement agreed: “We recognise the three-pronged crisis currently facing the region – the impact of COVID-19, the devastating effects of climate change and natural disasters, and the fragile economic health of the region as a consequence of inherent vulnerabilities.”
Tuvalu’s Minister of Finance Seve Paeniu was chair of FEMM 2020. Speaking to journalists after the meeting, Paeniu stressed that these combined crises affect states like Tuvalu, that do not have any confirmed cases of coronavirus: “Even though we are COVID-19 free, we are already feeling the flow-on impact in terms of the financial drain on our resources, in terms of our health systems, to ensure that our capacity to be able to respond in the event that there is a COVID-19 outbreak in Tuvalu. On top of that, we are very much vulnerable to natural disasters. At the beginning of this year we were hit by Cyclone Tino and then a few weeks later we had the COVID-19 pandemic.”
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Pacific Islands Forum Economic Ministers are asking development partners to provide debt relief, and increase general budget support as island nations struggle with the economic impacts of coronavirus pandemic.
At the end of this week’s virtual Forum Economic Ministers Meeting (FEMM), Ministers and officials also asked for more flexibility in the financing and focus of existing and upcoming donor programs, increased support for social protection systems, and that International Financial Institutions reassess grant and loan eligibility so Pacific island states can fully benefit from their support.
The Ministers say considerable additional investment and resourcing of public health systems will be needed and have committed to diversifying their economies and improving competitiveness, with a focus on the digital economy and investments in digital literacy, trade and innovation in the private sector, including through public private partnerships.
The Ministers have backed the establishment of a regional COVID-19 economic recovery taskforce to look at the socio-economic impacts of the pandemic over a longer period of time, and oversee implementation of regional priorities, including including health, digital economy and connectivity, food security and agriculture, and building resilient and sustainable economies. The taskforce will also engage with development partners on ‘innovative’ financing options.
Pacific Islands Forum Secretary General Dame Meg Taylor says the FEMM also discussed the need for “very strong public financial management systems”, so that members can absorb resilience finance and “address the issues of health and climatic impacts and plan our economies.”
“I think one of the key issues here is that, to note that over the past several years about US$2 billion has come into the region for resilience finance. That's a lot of money .”
As Chair of the FEMM, Tuvalu’s Finance Minister Seve Paeniu said for him, “it all boils down to the resourcing of these response measures that we pursue and how we implement and resource these initiatives.
Paeniu would also like to see “a coordinated set of lessons learnt and experiences by similar countries” so that Tuvalu and other small island states can learn from and adapt to their own circumstances for future crisis response situations.
FEMM has directed that a development partners roundtable be convened to help coordinate donor support for COVID-19 responses.
The Ministers did not discuss travel ‘bubbles’ or labour mobility in depth. Minister Paeniu says this is because in the case of travel bubbles, only a few countries have flagged such arrangements as a possibility. Dame Meg said labour mobility and seasonal worker discussions have largely been handled on a bilateral basis.
Australia’s Assistant Treasurer says in the post-COVID environment Canberra is willing to re-examine its policies including loan concessionality, debt consolidation and aid allocations to Pacific Islands nations but is not giving any promises or firm commitments.
Michael Sukkar is attending the Forum Economic Minister Meeting which kicks off this morning. Australia has already reallocated well over A$100 million to assist Pacific Islands respond to the health, social and economic impacts of COVID-19. But those funds have been reallocated from the existing aid budget.
The next federal budget is due for delivery on October 6, and Sukkar says: “if we do seek to supplement aid or humanitarian assistance to our region, that will be done with the broad principles of the Pacific Step up and will be focussed primarily on our immediate Pacific region and neighbours.”
Sukkar expects discussion of the A$2 billion Australian Infrastructure Financing Facility at today’s meeting. He says eight projects have been approved, utilising a mix of grants and non-concessional loans, and has not ruled out revisiting the nature of those loans, as there is “great value to moving to concessional loans”.
“Whilst I don’t want to necessarily announce any change of policy, I think the broad view is that we have to be nimble as we possibly can and that means re-examining all pre-existing COVID programmes,” Sukkar told Pacific journalists yesterday.
“I think it’s safe to say that in a post-COVID environment the Australian government is willing to re-examine everything with fresh eyes… and the view is that with the infrastructure facility, more concessional loan rates or loan terms would be likely to unlock particular projects.”
The Minister said discussions about consolidating debt in multilateral forums is “certainly gathering steam.” He also said the demand for Pacific island seasonal workers is likely to continue and the Australian government has done “some fairly important work in ensuring that appropriate quarantining arrangements and protocols are established to ensure they can continue to come.”
“With the Pacific yet to experience COVID-19, we need to err on the side of caution to ensure that the COVID-19 doesn't get a foothold.
“I think it would be a disaster with fragile health systems and other infrastructure for Australia to effectively be sending COVID into the Pacific through the Pacific island workforce,” Sukkar says.
Preparations are currently underway to send 120 ni-Vanuatu workers to the Northern Territory to help with the mango harvest and there are hopes in other Pacific nations that they will also be able to supply workers for upcoming harvests.
On tourism, Sukkar believes in the longer-term, travel bubbles are “an absolutely worthy way to go” but there is still a lot of work to do on protocols, and that no country in the world could say they have yet “perfected the art of contact tracing and ring-fencing before COVID-19 has the opportunity to spread like wildfire.”
“Until you really have perfected that, I think it is very hard to put in place a 'bubble'.
“But the concept of a bubble is really the only long-term solution and the only sense of certainty that we can all have in getting back to what is an economic engine room for the Pacific.”