Page 20 - Islands Business September 2023

Pacific Economies Pacific Economies

DRIVEN TO THE BRINK OF CHANGE

By Richard Naidu Recovery ‘not real’
The region’s economic prospects in the face of such
FANALEI. A 2-kilometre-wide island in the Solomon Islands. demands are far from comforting.
Once home to 500 people. Now, almost empty. The reason a The latest World Bank Pacific Update shows the region
young student and her peers are taking on the world. recovering from the COVID-19 battering of the past two years.
Just over 2000 kilometres away, a man in his late 30s sits Fiji was the first country to reopen its borders and led the
surrounded by acres of the lush greenery of a sugarcane farm comeback with 18.6% GDP growth in 2022. Average growth of
that fed two generations of a sprawling clan. But at his turn 3.9% is projected for 2023 across the region but is expected to
at the tiller of life, the income from sugar is so poor that he slow down to 3.3% as tourism slows.
has started a second, home-based building business to support The worry is inflation. In 2022, it made a huge increase
his family, while his wife works in the tourism sector. of 5.2% compared to the 2019-21 average. With inflation
Snapshots from our region, where long-standing economic expected to remain elevated at an average of 6% in 2023,
development issues have suddenly been forced to the front the World Bank Pacific Update warned that, “persistently
burner because the Goliath of climate crisis is already elevated international food and energy prices [has the]
chewing away at whatever developmental gains the Pacific potential to push vulnerable populations into poverty.”
Islands have been able to manage, threatening to leave them World Bank Pacific economist and co-author of its Pacific
with next to nothing—if they don’t fight back. Update, Reshika Singh, conceded in an interview with
Islands Business that the region may be recovering from the
Polycrisis devastation of COVID-19, but in the context of achieving
“The Pacific islands are now at a cliff edge,” Fiji’s Deputy sustainable economic growth, the trends are superficial at
Prime Minister and Minister for Finance, Professor Biman best.
Prasad told the Forum Economic Ministers Meeting (FEMM) “We talk about all this recovery in 2023, we see this pent-
in Suva, Fiji last month. The components of the threat are up demand, post-border reopening. But it’s not real. We’re
several-fold. only going back, still comparing to 2019 levels, and we are
“The growing burden of the climate crisis that impacts all in 2023 now. The long-term growth (forecast) is 2.6% for
areas of human life—on livelihood, on human security … with the Pacific—that’s the current estimate. But we see there’s
a fierceness not seen before,” said Prasad. “Second … the potential to do more and that’s where there’s a need for
region has made some progress on Sustainable Development structural reforms—that will be crucial,” said Singh.
Goals. Nevertheless, our region is largely falling behind. She acknowledged that in view of the increasing impacts of
Several of the goals are getting out of reach altogether.” natural disasters on island countries and the resulting need
Third, “the growing, multi-dimensional, multi-sectoral to build social protection systems for the more vulnerable
vulnerabilities touching all aspects of human life.” parts of the population, the long-delayed need to meet the
In her address to FEMM, the Executive Secretary of the challenge of sustained economic growth meant that Pacific
Economic Commission for Asia and the Pacific (ESCAP), Armida Island countries “have many competing priorities”.
Alisjahbana, noted: “With the polycrisis, there is a growing As she puts it, “Right now, it’s a matter of survival and
temptation to delay climate action.” getting back on track [with economic growth] but that is
The global polycrisis has been described as the where we need to look beyond the horizon and make sure
entanglement of crises in multiple global systems in ways that that growth is sustainable.”
significantly degrade humanity’s prospects.
“Today, the pandemic-hit economic recovery, the war in Diversification
Ukraine and the cost-of-living challenges are constraining the The farmer driven to make a living elsewhere is a victim of
sustainable development agenda,” Alisjahbana told the Pacific the structural problems in Fiji’s ailing and inefficient sugar
economic ministers. industry.
Released just weeks before the FEMM, ESCAP’s Asia-Pacific In a paper published in 2020, titled The Fijian Sugar
Disaster Report 2023 issued a stark warning about the threat Industry: Sustainability Challenges and the Way Forward,
to sustainable development in the region: “The Asia-Pacific Mohseen Riaz Ud Dean summarised the well-known woes of an
region has a narrow window to increase its resilience and industry that, for over a century, shaped the development of
protect its hard-won development gains from the socio- Fiji’s economy.
economic impacts of climate change. In the absence of “Decreasing profits from sugarcane production, coupled
immediate action, temperature rises of 1.5°C and 2°C will with cultivation, harvesting, and transportation costs and
cause disaster risk to outpace resilience beyond the limits of the non-renewal of land leases, have all led to the loss of
feasible adaptation and imperil sustainable development.” farmer faith in the industry,” the paper said. “As a result,
many sugarcane farmers have moved to urban centres of Fiji
and overseas to seek easier and better-paying jobs over the

20 Islands Business, September 2023