The Asian Development Bank expects Pacific Island economies to return to positive growth this year, although at different rates, and with a great deal riding on successful vaccine roll-outs.
Pacific economies contracted by an estimated 5.8% last year due to the effect of the coronavirus pandemic on tourism and trade flows, and construction activity. The region's economies are forecast to recovery to 1.4% this year, and 3.8% in 2022, although this is “contingent on improvements in tourism numbers, commencement of delayed construction projects, and resumption of labor mobility and cross-border trade,” according to the ADB.
ADB Director General for the Pacific, Leah Gutierrez says the start of vaccine rollout in many Pacific Island nations bodes well for a level of economic recovery. “However, risks to the recovery remain, particularly in tourism-oriented economies that are feeling the heaviest impacts of the pandemic crisis,” Gutierrez says.
Specific forecasts for Pacific Island nations as per the ADB’s latest outlook report are as follows:
Cook Islands: GDP is expected to fall by more than a quarter (26%) in 2021, before recovering to growth of 6% in 2022.
Federated States of Micronesia: GDP contraction of 1.8% in 2021, 2% growth in 2022.
Fiji: 2% growth in 2021, 7.3% growth in 2022 following an “unprecedented 19% contraction last year”. The ADB says it make take some years for the economy to return to its pre-pandemic levels.
Kiribati: Small contraction of 0.2% this year, 2.3% growth next year.
Marshall Islands: Negative growth of 1.4% in 2021, 2.5% growth in 2022.
Nauru: GDP growth of 1.5%, 1% in 2022 with the impending closure of the Regional Processing Centre.
Palau: Decline of 7.8% this year, growth of 10.4% next year.
Papua New Guinea: Moderate 2.5% growth in 2021, 3% in 2022, although the recent surge in cases threatens prospects for economic recovery.
Samoa: GDP down 9.2% in 2021, recovering to 3.1% in 2022 once full vaccine coverage is achieved.
Solomon Islands: 1% growth this year, 4.5% in 2022 as fishing and construction rebound.
Tonga: a 5.3% contraction exacerbated by Tropical Cyclone Harold in 2021, 1.8% growth in 2022.
Tuvalu: 2.5% growth in 2021, 2% next year.
Vanuatu: 2% growth in 2021 and 4% in 2022, but this is dependent on a successful vaccination rollout and establishment of travel bubbles.
The travel bubble between Taiwan and Palau is in danger of popping following low interest from Taiwanese tourists to take a holiday from a year of COVID-19 border restrictions.
In an effort to revitalise Palau’s economy which was devastated by COVID-19 in 2020 (with GDP down by 9.5% according to the Asian Development Bank), Palau and Taiwan announced the launching of a travel bubble last month.
President Surangel Whipps Jr. said after months of discussions, the bubble could finally happen. He flew to Taiwan for an official visit, returning to Palau days later with 100 tourists.
Amongst them was Hung Tzu-jen, who is the deputy superintendent at the Shin Kong Wu Ho Su Memorial Hospital. Speaking through a translator, he lauded Palau's efforts to ensure that the bubble was safe. Hung said it was his first holiday outside Taiwan since the declaration of the COVID-19 pandemic.
Flights between Taiwan and Palau were planned twice a week under the travel bubble or "sterile corridor".
While the inaugural flight on April 1 was much celebrated by both countries—with tourists excited and energised by the trip—the interest in flights subsequently dwindled.
Just 63 tourists have arrived since then. By April 14, China Airlines had cancelled the flight, saying only two tourists were interested.
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Quarantine free trouble has begun between Palau and Taiwan with the arrival of Palau’s first inbound tourism flight since March last year.
Palau's President, Surangel Whipps, Jr. returned to Palau from Taiwan on the flight, marking the event with the ceremonial signing of the Palau Pledge: the country's official passport stamp that all visitors must sign on arrival, promising to preserve Palau's environment and respect its culture for the sake of the next generation.
"I'm very happy this day has finally come,” President Whipps said on arriving home. “This is the first sterile travel corridor in the world between two COVID-free / COVID-safe countries, and I'm very proud of the work Palau and Taiwan have done to get us here. Taiwan is the perfect partner for this safe travel corridor. Not only because of their success in combating COVID-19, but also because Taiwanese travellers treat Palau's people, environment, and culture with respect when they visit. Our two nations trust each other – hence why we are able to have zero-quarantine at both borders."
Palau has recorded no cases of COVID-19, and over 65% of Palau's adult population is now vaccinated against COVID-19.
Meanwhile Cook Islands Prime Minister Mark Brown says they are ready to welcome New Zealand visitors from May 1st.
He was in New Zealand last week to meet his counterpart Jacinda Ardern and other key people critical to the travel plan.
“Facilitating travel of New Zealanders to the Cook Islands will be the difference to arresting an exodus of working-age Cook Islanders and their families to New Zealand," Brown said.
PM Brown also said access to grant aid, lower-interest funding and added capital loan funding, "will help to keep Cook Islanders in the Cook Islands rather than adding to the NZ-Cook Islands diaspora."
Meanwhile New Zealand Prime Minister Jacinda Ardern will announce when quarantine-free travel can resume with Australia this afternoon.
When 116 farmers in Fiji’s western division received 'Cash for Cultivation' from the government, Agriculture Minister Dr Mahendra Reddy told them: "We want the demand for vegetables, fresh produce, or root crops that comes from the local sector, whether it is from the tourism or the service industry, it should be fulfilled by us."
The Pacific Islands Farmers Organisation Network (PIFON)—which has members in Fiji, Tonga, Samoa, Vanuatu, Solomon Islands, Papua New Guinea and Timor-Leste— has suggested resort chefs and procurement officers could be using this time (of border closures) to visit farmers and talk about what they need to in order to use more local produce in their restaurants. “There is an opportunity for farmers and hotels to enter into contract farming agreements that will encourage farmers to plant longer-term crops, including fruit and nut trees, now in readiness for when tourism begins to recover,” PIFON says.
More than half of the fresh produce served in hotels and resorts in Fiji’s main tourism areas in 2017 was imported, representing an import bill of more than F$38.5 million (US$18.8 million) reports the International Finance Corporation (IFC).
Some of this produce was crops that grow well, and year-round in Fiji. Tropical fruit juice alone accounted for F$1,566,750 of the import bill.
Hotel purchasing managers, chefs and general managers told the IFC researchers that seasonality and inconsistent supply of local produce were the most common reasons they did not buy local fruit and vegetables. Quality was also an issue.
That has been the experience of Yemi Lee, the Area Director of Finance & Business Support South Pacific at the Intercontinental Fiji Golf Resort and Spa.
“Farmers here, they don’t really have enough production,” he says.
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Bank of South Pacific (BSP) plans to list on the Australian Securities Exchange (ASX). BSP has given notice of its intention to change its constitution to allow for dual listing in Australia as well as its current listing in Papua New Guinea.
The Fiji Hotel and Tourism Association says the effective rollout of vaccines will be critical for everyone’s health and safety, the revival of the tourism industry and thousands of people getting their jobs back. FHTA Chief Executive Officer, Fantasha Lockington has reiterated the offer of industry support to the Ministry of Health and Medical Services with the logistics of rolling out the vaccines.
Water bottler and distributor, Pleass Global Limited says revenue in 2020 was F$10.99million or 20% lower than the previous year. However it recorded net profit of $1.06million for the year, 58% higher than the previous year. Chairman Warwick Pleass said “2020 was a turbulent year in Fiji, as it was globally, due to the SARS-CoV-2 or COVID pandemic. This caused the company great disruption and disappointment but in the end I am pleased with the result and outcomes. This satisfaction arises only relative to where we might have been had the company not reacted quickly and throughout the year, and if not for the immense sacrifices made by the employees and more specifically the management.
Shipping Services has marked its 29th birthday by rebranding. It has also introduced new door to door logistics services —including packing, shipping, storing, and chilling services—alongside port-to-port container transportation.
The Reserve Bank of Fiji has two new board members, Vinod Patel and Company Group GM Finance, Nikita Patel, and Energy Fiji Chief Financial Officer, Bobby Naimawi.
Tourism Fiji has handed over burgee flags, which yachts can fly from their masts, to signify they are ‘Blue Lane approved’. The flags indicate a vessel and its crew have completed quarantine, mandatory protocols and do not pose any COVID-related threat to the community.
Fijian Holdings has welcomed its new Group Chief Executive, Jaoji Koroi, who has started work after transitioning from his role at the Fiji National Provident Fund.
The Fiji National Provident Fund and Vinod Patel & Company have signed a lease agreement establishing its Home & Living Division as one of the anchor tenants for the myFNPF Centre, Nadi.