The Asian Development Bank expects Pacific Island economies to return to positive growth this year, although at different rates, and with a great deal riding on successful vaccine roll-outs.
Pacific economies contracted by an estimated 5.8% last year due to the effect of the coronavirus pandemic on tourism and trade flows, and construction activity. The region's economies are forecast to recovery to 1.4% this year, and 3.8% in 2022, although this is “contingent on improvements in tourism numbers, commencement of delayed construction projects, and resumption of labor mobility and cross-border trade,” according to the ADB.
ADB Director General for the Pacific, Leah Gutierrez says the start of vaccine rollout in many Pacific Island nations bodes well for a level of economic recovery. “However, risks to the recovery remain, particularly in tourism-oriented economies that are feeling the heaviest impacts of the pandemic crisis,” Gutierrez says.
Specific forecasts for Pacific Island nations as per the ADB’s latest outlook report are as follows:
Cook Islands: GDP is expected to fall by more than a quarter (26%) in 2021, before recovering to growth of 6% in 2022.
Federated States of Micronesia: GDP contraction of 1.8% in 2021, 2% growth in 2022.
Fiji: 2% growth in 2021, 7.3% growth in 2022 following an “unprecedented 19% contraction last year”. The ADB says it make take some years for the economy to return to its pre-pandemic levels.
Kiribati: Small contraction of 0.2% this year, 2.3% growth next year.
Marshall Islands: Negative growth of 1.4% in 2021, 2.5% growth in 2022.
Nauru: GDP growth of 1.5%, 1% in 2022 with the impending closure of the Regional Processing Centre.
Palau: Decline of 7.8% this year, growth of 10.4% next year.
Papua New Guinea: Moderate 2.5% growth in 2021, 3% in 2022, although the recent surge in cases threatens prospects for economic recovery.
Samoa: GDP down 9.2% in 2021, recovering to 3.1% in 2022 once full vaccine coverage is achieved.
Solomon Islands: 1% growth this year, 4.5% in 2022 as fishing and construction rebound.
Tonga: a 5.3% contraction exacerbated by Tropical Cyclone Harold in 2021, 1.8% growth in 2022.
Tuvalu: 2.5% growth in 2021, 2% next year.
Vanuatu: 2% growth in 2021 and 4% in 2022, but this is dependent on a successful vaccination rollout and establishment of travel bubbles.
A multimillion-dollar program aimed at supporting “a more prosperous Pacific driven by a skilled, competitive and productive workforce” is undergoing controversial changes which could have significant impacts on the future of vocational training in the Pacific Island region.
The new leadership at the Australia Pacific Training Coalition (APTC) says it’s a necessary response to the challenges posed by the coronavirus pandemic and its economic impacts. But there’s concern amongst some stakeholders that the process has been opaque, as it is based on a strategic review and rapid assessment that few people have seen, and that it marks a shift away from meaningful Pacific Islands nations’ input into the Coalition’s work.
APTC was established in 2007 as the Australia-Pacific Technical College, and began work a year later. Over that period, the Australian government has invested more than A$350 million (US$271 million) in the effort. Corporate materials state that it has supported 16,000 graduates across 14 Pacific countries, working with TVET (Technical and Vocational Educational and Training) institutions in Fiji, Kiribati, Nauru, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu, and offering Australian-recognised qualifications and other training. It has since transitioned to become the Australia Pacific Training Coalition.
APTC is managed by TAFE Queensland, specifically TAFE Queensland International Education (TQIE), a company limited by shares that was established in July 2017. TAFE Queensland’s 2019-20 annual report states that TQIE’s primary source of revenue is from the APTC contract. In 2019-20 TQIE recognised revenues totalling A$5.91 million (US$4.57 million).
For the full story login in to your account or subscribe to our emag today
Pacific island countries should not expect international travel to resume in earnest until late 2021, travel and aviation experts have warned.
‘You should forget the US market for 2021, as well as Europe and the United Kingdom,” Peter Harbison told a recent meeting of Pacific airline executives.
“Nearly 550,000 Americans are projected to have died by 1 April 2021 (from COVID-19), which is more than double the mid-November 2020 level.
“The vaccine rollout is projected to have little impact by April 2021.
“For Europe, over a million Europeans are projected to die by 1 April 2021, representing a trebling of mid-November 2020 numbers.
“For the United Kingdom, nearly 120,000 residents are projected to die by April 2021, doubling its mid-November 2020 level.”
Harbison is the chairman emeritus of CAPA – Centre for Aviation, an Australian based aviation and travel market intelligence firm.
He was among a number of experts invited to address a virtual seminar for members of ASPA – the Association of South Pacific Airlines recently.
With the exception of Fiji Airways, all Pacific airlines, including Air New Zealand and QANTAS, are Association members.
Even the performance in 2021 of the region’s largest tourist source market, Australia, is in doubt, Harbison told the ASPA seminar.
For the full story, login to your account or subscribe today.
The Australian Federal Budget delivered last night has increased aid to the Pacific.
An extra A$211 million has been allocated to COVID-19 response in the form of grants, agreed in negotiations with recipient countries, in addition to the $4 billion previously earmarked for international assistance. Further, a small increase in aid due to cuts in assistance in other regions has also been made.
Devex reports that PNG will remain the largest recipient, receiving A$491.1 million, although this is less than the previous budget allocation. Climate partnership programs have also see their funding reduced by A$5.7 million.
As Stephen Howes at the Australian National University writes, the COVID-19 response is being communicated separately to the main aid allocation, perhaps because “the government does not want to be seen to be providing a permanent boost to aid.”
Australia has made big cuts to its aid to South and West Asia, sub-Saharan Africa, the Middle East and North Africa. These cuts continue a trend that has been evident for some time.
Tim Costello, who heads Christian international NGO Micah Australia, says “This increased one-off support of AU$305 million for the COVID-19 response and recovery in the Pacific and Timor-Leste is good news for our closest neighbours whose economies and livelihoods are reeling from the pandemic.”
Oxfam Australia CEO Lyn Morgain has also welcomed the increased allocation, while saying it should be a permanent commitment: “It is heartening to see the Government’s recognition that this is not over for Australians until it is over for everyone. But this change of heart must be permanent.
The Australian government is forecasting a budget deficit of $213.7bn, or 11% of GDP, for 2020/21.
“From capital to develop and export goods like coffee, to training and support with digital platforms, Pacific businesses – especially female-led business – are in urgent need of tangible support,” says the Pacific Trade Investment (PTI) Australia Trade & Investment Commissioner, Caleb Jarvis.
The economic impacts of COVID-19 on female-led businesses in the Pacific continues to rise, according to the latest Pacific Business Monitor survey conducted by PTI.
The fifth survey in PTI’s ongoing series has found that 92% of female-led businesses have reported a fall in revenue. In comparison to the previous survey, the number of fully operational female-led businesses has declined from 29% to 23%, while partially operational businesses have increased from 19% to 41%.
Jarvis states that despite the COVID-19 free status of most Pacific Island Countries (PICs) “the economic impact of closed borders has been debilitating, especially for nations that are reliant on tourism – a sector with a high proportion of female employees.”
“Many women are performing a juggling act – balancing work with being the primary care givers,’ explains Jarvis- a trend correlating to findings published in a recent report by the United Nations titled, ‘Policy Brief: The Impact of COVID-19 on Women’.
The UN report notes that girls and women are ‘suffering more’ due to many factors: home schooling, disproportionate lack of access to digital tools, work capital, skills and higher care responsibilities.
The latest PTI survey finds that COVID-19 has had a ‘negative impact’ on the mental health of 31% of female-led business in contrast to 14% of male-led businesses. Levels of happiness and optimism continue to decline as 45% report felling worried ‘most of the time’ or ‘all of the time’.
Despite the negative impacts, more female-led businesses are implementing adaptive measures such as pivoting to online business, and seeking rent reductions or relief.
Jarvis states that “it’s a long road ahead, and its vital that we continue to champion the voice of businesses in the Pacific by continuing to provide quantitative results to governments, donors and regional organisations so they can see the realities facing Pacific businesses.”