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in that, they would be better positioned to budget the money says other Pacific delegations have a lot to learn from Fiji’s
they’re receiving, especially if they’re looking to set up a experience, in particular the preparation required and the
business. It does take up quite a bit of resources and quite a need for all tourism stakeholders to work together. SPTO is fa-
bit of time, so it’s not something of course to be taken lightly. cilitating the South Pacific Tourism Exchange in New Zealand
And, you know, access to that sort of information would be this year and Cocker hopes to see exhibitors and destina-
very helpful, as well as access to credit and of course, formal tions promoting more sustainable tourism experiences and
banking.” niche products, as there is still a perception that all Pacific
destinations are sun, sand and surf experiences. He identi-
Debt fies the skills gap resulting from labour mobility programs as
In October, the International Monetary Fund (IMF) noted a another challenge to the sector, and says they are working
steep increase in public debt in eight out of 12 Pacific Island with partners to collect data on the impact of these schemes
nations during the pandemic, increasing their vulnerability to on tourism.
debt shocks. It notes large fiscal deficits in Palau, Fiji, Solo-
mon Islands and PNG, if not addressed through fiscal consoli- Social protection
dation and debt management, could lead to a further rapid Cara Tinio says the pandemic highlighted the importance
increase in public debt. of social protection for helping the region’s most vulnerable
The ADB’s Tinio adds, “When your debt burden rises, then people. She describes as some ‘quick wins’ to ensure these
of course, you have to earmark more funds for repayment… gains are not lost: investment in digital technology such as
so that diverts resources away from essential government electronic and mobile banking and ecommerce, and greater
operations. And then that could also affect the availability of inclusion in provident and superannuation funds. In the longer
essential services…and maintenance of public infrastructure.” term, she says incorporating social protection in national
development strategies is important, paired with public finan-
Tourism: internal and external competition cial management reform.
Fiji’s economic performance last year was fuelled by a big
rebound in tourism and visitor arrivals. editor@islandsbusiness.com
CEO of the Pacific Tourism Organisation (SPTO) Chris Cocker,

COUNTRY OVERVIEWS
The diverse size and economic base of Pacific Island nations means there is variance in their outlooks for 2023.

Cook Islands to get enough food or meet their basic needs. “With
More flights into Cook Islands should boost the tourism emerging fiscal risks including liquidity issues experienced
industry this year says the ANZ, and forward bookings are by the country, it is critical to revisit the legislative,
already looking positive, although government-subsidised budgetary, and monitoring and evaluation frameworks to
flights from the U.S. have ceased. The ANZ forecasts GDP ensure that social protection programs are sustainable,”
to increase by 16.4% in 2023, and then drop back to a 6.5% the ADB notes.
rate next year. Cook Islands is now experiencing increased
prices as steep rises in global freight rates are starting Fiji
to be felt. The CPI rose 5% in Q3 2022 (compared to the Fiji’s economy accelerated in 2022 due to tourism, but
same quarter in 2022) although inflationary pressures that sector may peak this year as more destinations open
are expected to ease. Locally, businesses are concerned up and are price competitive. Fiji’s challenges include
about staff retention. The Cook Islands government has high youth unemployment and the steady migration of
warned that the economy may be affected by the forecast skilled workers to Australia, the U.S. and New Zealand.
recession in New Zealand. It projects economic growth While the latter has seen an increase in remittances, the
of 11.8% for the 2022/23 financial year. The ADB notes emerging skills gap is a concern. The ADB says long-term
that while social protection measures in the Cook Islands training programs, youth targeted wage subsidy programs
compared favourably with other Pacific economies, the and similar initiatives should be considered. There is
government’s fiscal deficit reached the equivalent of potential in manufacturing. There are warnings that
20.9% in FY2021 compared to surpluses registered before declining liquidity could trigger higher interest rates.
the pandemic. Most spending went to old age and special
allowances and family and child allowances, but “despite Kiribati
the enormous support provided, some of the response The pandemic saw a 34% drop in Kiribati’s fishing
measures were inadequate” and some people struggled Conitnued on page 31

Islands Business, January 2023 13