The Pacific Island Forum's Director of Economic Governance, Roman Grynberg, says Pacific states need to prepare themselves for what he describes as the most serious economic event since the Great Depression.
Dr Grynberg says prices for commodities produced in the Pacific such as cocoa have already dropped by up to 30 percent.
He says no one knows what the full implications of the financial crisis is likely to be, but there's no doubt a world-wide slow down in economic growth will hit Pacific Island nations hard.
"It's very doubtful that many of the developed countries that will be under such severe budgetary pressures in the coming years as a result of the need to provide just the initial level of support to their banking systems will be able to provide development assistance to the levels that they had promised in the past."
Dr Grynberg says banks in the Pacific, however, aren't exposed to the risks of those in the Northern Hemisphere and a drop in fuel prices will provide some short term relief..