A Biopolar Pacific?

Melanesia has yet again become a target in a recently released report highlighting high unemployment, low education and poor living standards in the region.

The report, titled “The Bipolar Pacific” by Helen Hughes and Gaurav Sodhi of the New South Wales-based Centre for Independent Studies, joins a line of consultancy reports that regularly gives out lethal doses of descriptions about Pacific’s Melanesia, characterising it with ‘unending political instability’, ‘lawlessness’ and ‘simply ridden with social ills.

This time, this report comes with a stern warning with its prediction that Melanesia’s “growing army of unemployed and underemployed” will soon turn “from restless to violent” if nothing is done to “reform policies to encourage substantial employment creating growth”.

“Australians have become accustomed to bad news from the Pacific islands,” it said in its summary.

“Conflict in the Solomon Islands, coups in Fiji, murders by raskol gangs in Papua New Guinea, and the burning of Chinatown in Honiara indicate an ‘arc of instability’ at our doorstep.

“But there appears to be two Pacific. One group of islands have managed to grow, if not at the speed of East Asian economies, at least modestly.

“It includes the Cook Islands, French Polynesia, Guam, New Caledonia, Samoa, Tonga and others, that have reasonable education and health with modest socio-economic outcomes for their people.

“A second group of islands, including Fiji, Papua New Guinea, Solomon Islands and Vanuatu, have stagnated at best.

“In some cases, they have become poorer. In these islands, governments are largely absent from the day-to-day lives of individuals.

“For most families, this means no electricity, no running water, no sanitation and little health care.

“For women, it means giving birth without medical attention. Many villages lack institutions of law and order and receive scant attention from political elites who squander public revenues.

“The problem for the region, and hence for Australia, is that the second group of countries includes the largest, most populous islands.

“About 80 percent of the Pacific’s population is found in the low growth group of islands, where employment is rare and living standards are not rising.

“High mineral and timber incomes have not translated to better services or economic growth. The Pacific is thus bipolar.”

In its introduction, the paper nailed home its points of a “bipolar Pacific” by comparing Melanesia’s historical wastage of resources and opportunities against the virtues of other islands nations that had been comfortably cocooned under the wings of major economies like United States, Australia and New Zealand.

Thus, the Pacific’s “development since independence some 30 years ago has been bipolar,” it noted.

“French Polynesia and New Caledonia (both French territories), and islands in association with United States and New Zealand, have traded political independence with growth.

“With high emigration in Tonga and Samoa, income has also forged ahead of population.

“PNG and Solomon Islands, despite their relatively large landmass and rich natural endowments, have at best stagnated. Fiji, another large state, appeared to be on a growth path until a series of political coups disrupted its economy.

“Vanuatu has been struggling for most of its post-independence period, and recent growth has been confined to the capital Port Vila.

“Nauru, initially extremely mineral rich, has squandered its income to the point of bankruptcy.

“The Pacific islands have received high aid flows, but the principal effect of aid has been to avoid the adoption of policies necessary for growth.”

In the paper’s analysis of “the socio-economic consequences of post-independence development in the Pacific”, Melanesia is seen to have miserably failed in areas of health and education compared to its Polynesian neighbours.

The paper casts Polynesia as enjoying better living standards when compared to the AIDS and malaria-stricken Melanesia whose population suffer from lack of basic health care and education.

With the paper’s “principle focus” being on “labour market trends”, it points out to Melanesia the reasons why it has had to grapple with its chronic high unemployed and underemployed population.

Aside from poor health provision for the population and low focus on education, Melanesia has also largely neglected its informal sector.

“Indigenous informal sector activities are extremely limited and in the rural areas of the stagnating islands, almost entirely absent.

“The lack of agricultural development with the consequent absence of off-farm activities is undoubtedly a major factor.

“So are the regulations inherited from colonial governments that make it difficult to establish small enterprises such as hair salons.

“Corrupt police frequently use regulations to knock down market stalls and the stocks of roadside betel-nut sellers when vendors do not pay them sufficient protection money.

“The higher profitability of illegal marijuana stalls funds their protection payments, usually protecting them from the law.

“Most Pacific governments regard informal entrepreneurship as undesirable.

“They associate development with large scale, the latest technology, and potential tax revenues, rather than with employment and incomes.

“In practice, aid donors support such views of development. Although their rhetoric may favour small-scale industries and employment, their concerns are with the formal sector.

“Government policies are influenced to favour foreign investment, often protecting it against small entrepreneurs.

“This leaves criminal enterprises—developed by islanders unable to find jobs or crowded out of legitimate businesses - as the principal sources of informal-sector employment in the Pacific.”

In its conclusion, the paper argued that “guest worker schemes, which have been proposed as a development solution for the Pacific” would not help the employment problems of PNG, Fiji and Solomon Islands.

—By Dionisia Tabureguci

---

NZ political parties’ Pacific policies

The approaching elections in New Zealand have brought out in sharp relief the different policy approaches that New Zealand’s two leading political parties—the ruling Labour Party headed by Prime Minister Helen Clark and the opposition National Party with John Key as its head—have towards the Pacific Islands.

Elections in New Zealand must be held before the end of November and the two parties have been busy lately announcing their policy approaches on different issues.

Opinion polls have consistently shown that the National Party has been leading in the popularity stakes and going by trends, political pundits widely predict that the party would be able to win the elections ending Labour’s—and Helen Clark’s—nine-year rule.

Speaking to the media in Niue during last month’s Forum, Clark said New Zealand would spend over NZ$2 billion over the coming seven years through development assistance to Pacific countries.

Specific commitments included NZ$70 million to help build wharves, public facilities and schools, she said.
“Our strategy centres on helping Pacific partners create an environment which supports sustainable economic growth and delivering long-term benefits,” she said while jointly launching the Pacific Region Infrastructure Facility along with the Australian government and Asian Development Bank.

The facility will coordinate donor funds to develop and maintain critical economic infrastructure in the islands nations, with up to NZ$200 million over four years.

New Zealand has committed an initial NZ$1 million to the project with more to follow as the nuts and bolts of the facility are being worked out over the coming years.

Her focus was almost exclusively on an aid-related approach.

By contrast, the National Party’s Pacific policy puts trade at its heart, instead of aid.

The party is widely seen as being pro-business in New Zealand as against Labour, which has increasingly gained a reputation that it is far less business friendly in recent years.

National has highlighted a “pressing need” to address the huge trade imbalance between New Zealand and the rest of the Pacific which has ballooned to a figure hovering around the NZ$1 billion mark (for exports of NZ$1.1 billion from New Zealand, it imports just NZ$135 million worth of merchandise from the islands collectively).

Associate Foreign Affairs and Trade spokesman for the National party, John Hayes said that trade played an important role in the development of the Pacific region and provided employment, revenue and a solid economic base.

The New Zealand’s Parliament’s trade and foreign affairs select committee has been studying the country’s trade with the Pacific Islands for over a year now and the work on the report would be passed on to the next Parliament for its completion.

The National Party is also keen to see faster progress between New Zealand and the islands on trade agreements like SPARTECA and PACER. 

Hayes also said that Pacific communities could take a leaf out of the successful manner in which New Zealand Maori communities have incorporated communal businesses that use communal resources and ultimately benefit entire communities in a collective manner.

– By Dev Nadkarni