Transcript
VIRGINIA HORSCROFT: So the report talks about the volatility of growth in the Pacific and because they are so small and the economies, and they face a large number of shocks from the global economy and natural disasters, the report focuses on how their key sectors, and if they're affected can have very large overall economic impacts on the country and the report also talks about how significantly fisheries revenues have grown recently for a number of Pacific islands and how important these increases are as a source of financing for public services like health and education.
KOROI HAWKINS: That sort of leads in to my next questions which is, are there any particularly worrying risks that stand out apart from the ones you mentioned there?
VH: Yes well there are high risks in the Pacific because of their exposure and the shocks to the global economy and from natural disasters and we saw I guess the risks from natural disasters very clearly with Cyclone Winston hitting Fiji but the other kind of shocks that are worrying for the Pacific are things like oil prices, so if oil prices were to increase then that would really reduce the ability of families in the Pacific islands to afford their basic needs and not just because oil is vital to the local production of energy in the Pacific islands and also transport, but also because so much of what's consumed in the Pacific islands is imported and so if oil prices increase then that has an across the board increase effect on prices because of the transport costs.
KH: Are there any positives?
VH: Yes, lots of positives and I would say that the gains the Pacific islands have been making on their fisheries revenue are largely due to the mechanisms that they have set up themselves to manage the fisheries regionally on a cooperative basis and that's enabling them to maximise the revenue that they get from selling access to their fisheries and also to better manage the catch within sustainable limits so that is a positive that we expect to continue in the future which will very much help their funding of public services. Another positive is Fiji did something very innovative in the wake of Cyclone Winston, it has a couple of safety nets already for poor households, elderly people and vulnerable groups, and immediately after the cyclone it paid extra money to the poor and vulnerable through those safety nets to help them cope and recover from the cyclone so given the exposure of the Pacific islands to natural disasters this is something we're definitely hoping to see more of in the Pacific.
KH: And is East Asia having a bigger impact on Pacific economies as they're taking more interest in the region politically?
VH: East Aisa's certainly having a bigger impact economically over time so China and other economies in East Asia are becoming increasingly important destinations for commodity exports for the commodity exporters in the region and also more important sources of tourists so Palau particularly benefits considerably from Chinese tourists. The Pacific in that way is fortunate to be relatively closely located to such a dynamic region and that through investment links as well as trade links probably means they've got a surer economic foundation because of their proximity to Asia.
KH: I noticed the report's title is reducing vulnerabilities, is that right? And are there recommendations or is there advice for Pacific countries on this?
VH: Yeah in the sections on the Pacific countries it talks about the importance of being able to maximise returns from the resources they do have, so things like fisheries revenues, and also the importance of focusing on providing very good quality services and the country is extremely difficult with populations that are so small and so spread out to provide public services at a reasonable cost and so being able to do that is an important challenge for Pacific islands to address.
