With average growth in the Pacific now projected at 2.7% in 2016 and 3.3% in 2017 — the lowest since the global financial and economic crisis — policies to reinvigorate and sustain economic activity need to be prioritized, according to the Asian Development Bank’s (ADB) December 2016 issue of the Pacific Economic Monitor launched today.
“The ongoing slowdown highlights the need for continuing policy reforms to boost both short- and longer-run growth prospects across the Pacific,” said Xianbin Yao, Director General of ADB’s Pacific Department.
The Monitor, ADB Pacific Department’s flagship economic publication, has been revamped to focus country chapters on current and critical policy issues including fiscal adjustment, disaster preparedness, public investment and state-owned enterprises, and information and communications technology.
In Papua New Guinea and Timor-Leste, two of the Pacific’s biggest economies, declining revenue flows from natural resource extraction have prompted budget adjustments to ensure steady economic growth while avoiding excess debt. Capacity development will be important in improving service delivery and raising the quality of public spending moving forward.
Disaster preparedness and resilience is a central policy priority across the Pacific, given the exposure to natural disasters. This issue notes the layered financing — trust fund, contingent credit, and insurance — used by the Cook Islands to promote financial readiness for disasters. The report also points to post-disaster fiscal consolidation and economic rebalancing in Fiji and climate change adaptation and mitigation efforts in the North Pacific economies — Marshall Islands, Federated States of Micronesia, and Palau — as positive developments.
This issue stresses the need to explore options for cheaper and more reliable information and communication technology services in Kiribati, Tonga, and Tuvalu. Such services hold great potential to open up new business opportunities, expand access to financial services, raise labor productivity, and reduce the costs of doing business.
A policy brief in the report suggests Pacific countries continue to develop niche markets since targeting high-value products to specific markets negates high transportation costs. This has proved successful for many Pacific exporters. A piece on agriculture and agribusiness in Samoa considers options for harnessing the country’s potential to increase its exports. The potential of Timor-Leste’s coffee exports transitioning from commodity to niche, thereby raising earnings potentials for small farmers, is also featured. There’s a section exploring ways to expand exporters’ access to financing through ADB’s Trade Finance Program — all of which could be of interest to the private sector across the whole of the Pacific.
The Pacific Economic Monitor is a bi-annual review of economic developments and policy issues in ADB’s 14 developing member countries in the Pacific. In combination with the Asian Development Outlook series, ADB provides quarterly reports on economic trends and policy developments in the Pacific. The Monitor welcomes contributions of policy briefs from external authors and institutions.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members—48 from the region. In 2015, ADB assistance totaled $27.2 billion, including cofinancing of $10.7 billion.