Catalog

	Table of Contents
p. 5 of 29 BACK | NEXT Executive Summary I. Introduction II. Development Challenges A. Economic Growth B. Poverty C. Private Sector Development D. Environmental Degradation E. Gender III. Key Variables Influencing Development IV. External Assistance V. Review of ADB Assistance and Strategy VI. The New Pacific Strategy

A Pacific Strategy for the New Millennium : II. Development Challenges

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B. Poverty

11. Poverty is beginning to increase in the Pacific. Until recently, poverty was not regarded as a significant problem among the PDMCs, which have high per capita incomes by developing country standards and relatively productive subsistence sectors. Cases of need that did exist were thought to be taken care of by the redistributive mechanisms of the kinship networks. However, poverty is a significant and growing problem in the PDMCs due to two decades of weak economic performance, fairly rapid population growth and urban drift, and growing inequalities. Traditional support mechanisms are under strain, and in some instances, are breaking down.

12. The Melanesian countries⁵ suffer the most widespread poverty. The PDMCs other than PNG, Solomon Islands, and Vanuatu exhibit, to varying degrees, higher levels of human development and lower levels of human poverty: Cook Islands, Samoa, Tonga, and Tuvalu rank higher in socioeconomic measures and exhibit little poverty. The FSM, Kiribati, Nauru, and RMI, rank in the middle range of both socioeconomic development and poverty. But in all cases, poverty profiling is needed to establish the real nature and extent of poverty.

13. The systematic documentation of poverty is ongoing. The Fiji Islands and PNG are the only two PDMCs for which the extent and severity of poverty has been documented (although in the Fiji Islands case, data are relatively old, based on household surveys conducted in 1990/91). In both cases, significant percentages of the population are worse off than average income levels might suggest. Two other lower middle-income Melanesian countries where this is likely to be true are the Solomon Islands and Vanuatu. Like PNG, they rank in the low human development category (Figure 1).⁶ They also score poorly on the United Nations Development Programme’s (UNDP) gender-related development index, and rank high on the human poverty index compared with 72 other developing countries (Figure 2). Populations in these two countries have poor access to safe water and health services, and high percentages of underweight children under five years old. Based on the UNDP definition, the human poverty index is a composite of the percentage of (i) people not expected to survive to age 40, (ii) adults who are illiterate, (iii) underweight children, and (iv) people without access to safe water and health services.⁷

14. There is a close link between poverty and vulnerability. Vulnerability threatens the sustainability of livelihoods. A composite vulnerability index was calculated and is a weighted aggregate of openness as measured by export dependence, economic diversification as measured by the diversification index of the United Nations Conference on Trade and Development, and susceptibility to natural disasters as measured by the proportion of population affected by disasters during 1970-1996. Among 111 developing countries, the PDMCs that were included ranked as follows: Vanuatu 1st (and most vulnerable), Tonga 3rd, Fiji 8th, Solomon Islands 11th, Samoa 20th, PNG 30th, and Kiribati 59th.⁸ The country coverage of vulnerability indices must be updated and extended, prior to analyzing the implications of vulnerability for the development of poverty reduction strategies. Such analysis would have to consider the probability of disasters occurring, and the associated expected economic losses. Appendix 2 provides details on the poverty profile of individual PDMCs.

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