28 Oct 2008

Asian Development Bank advises Pacific countries to trim spending

7:47 am on 28 October 2008

Pacific Economic Ministers will today be told if they make structural reforms their countries will be better placed to cope with the global economic crisis.

Ministers from Australia, Nauru, the Cook Islands, Samoa, Solomon Islands, Tuvalu and Vanuatu have been joined by government officials from the other nine Forum members for the 12th FEMM, or Forum Economic Ministers' Meeting, in Vanuatu.

Don Wiseman reports from Port Vila.

"The Asian Development Bank is advising Pacific countries to brace themselves for the economic downturn by trimming spending, simplifying tax systems and embracing private enterprise. The ADB's regional director, Eugene Zhukov, says the current situation creates a good impulse, motivation to start accelerating on this front. The Pacific Power Association's Tony Neil will make a plug for fuel hedging which in a study just completed would have saved millions when the price of oil soared earlier this year. He says he thinks in the first six months 21 million dollars would have been returned to the utilities to reduce their burden. But the key expectation of the meeting is that the Ministers will sign off on a plan to begin negotiations on bringing some of the smaller island countries cheaper power by merging their fuel markets to bring down the price."