27 Oct 2008

Asian Development Bank says Pacific nations must continue structural reforms

11:07 am on 27 October 2008

The Asian development bank is warning that Pacific countries need to reinvigorate structural reform in order to weather the current financial crisis.

The call comes in a new study, "Navigating the Global Storm", which says the impact may be lessened through sound economic management.

Megan Whelan reports.

"The report says the Pacific's banking system is well placed to survive the most immediate effects of the global financial crisis, as it is somewhat separated from international financial markets. It says, for example, the Bank South Pacific and the National Bank of Vanuatu have very little exposure outside the region, because the level of local deposits typically exceeds or closely matches the level of local loans. However, one pronounced immediate impact of the financial crisis will be a fall in the value of the region's offshore investments, and remittances are also likely to fall. The report says the global financial crisis and downturn in growth also have the potential to dampen the region's tourism industry. It says the key response should be to reinvigorate structural reform, including efforts to improve rural productivity, and actions to improve transport and communication and basic public services."