MANILA, PHILIPPINES – Cyclone Pam’s devastation in Vanuatu is a tragic reminder of the acute development challenges the remote Pacific islands nations face and the need for resolute support from the Asian Development Bank (ADB) and other partners to help them better withstand economic shocks, natural disasters, and climate change.
Indeed, geographical isolation, small populations, and paucity of resources—as well as extreme vulnerability to climate change—call for a very different approach to development in the Pacific, says the newly released Independent Evaluation study, ADB Support to Small Pacific Island Countries.
“The category five cyclone that devastated Vanuatu could well be the new norm,” said Vinod Thomas, Director General of Independent Evaluation at ADB. “Pacific countries are extremely exposed to climate change, but have the least resilience to adapt. ADB, with other development partners in the region, must meet this issue with a sense of great urgency,” he said.
Many are calling Cyclone Pam, which also affected the Solomon Islands and Tuvalu, the worst storm Vanuatu’s 266,000 people have ever faced. It was by several measures among the most extreme cyclones ever to hit the South Pacific, and a harbinger of the expected increase in frequency and intensity of weather-related natural disasters worldwide.
“When disaster hits this region it wipes out years of development. All the small Pacific island countries risk sharp reductions in national incomes after natural or economic shocks unless measures are implemented to prepare for them,” says Joanne Asquith, the principal author of the report. The countries covered in the study also include Cook Islands, Federated States of Micronesia, Kiribati, Nauru, Palau, Republic of the Marshall Islands, Samoa, Tonga, and Tuvalu, which are among the smallest and most isolated countries on earth.
In addition to their unusual vulnerability to climate change, these countries face a unique set of challenges to achieve sustained and inclusive economic growth, private sector development, and job creation. Their small populations face serious obstacles to meet human resource needs and create the economies of scale essential for private sector development. At the same time, vast distances from major markets drive up business costs and severely limit trade and private sector investment.
The countries also rely considerably more than other regions on external support to supplement domestic tax revenue, to provide public services, and to drive their development— receiving more aid per person than any other region in the world. And new donors are entering the region, including the People’s Republic of China.
In contrast, ADB is a relatively small player with limited country presence. Even so, the study found ADB’s relevance in the region had improved over the past decade. It increased its use of grant financing, attracted cofinancing and other cooperation for large infrastructure projects—from a range of sources such as Australia, New Zealand, the World Bank and other prominent partners—and supported reform measures, such as those to encourage private sector investment.
ADB’s field presence in all Pacific countries, except Nauru and Tuvalu, has also strengthened, helped in particular by cooperation from Australia. In addition, the doubling of ADB’s minimum country allocation to $3 million starting in January this year should help to restore positive net aid flows to Nauru and the Republic of the Marshall Islands, which had been on the decline.
On climate change, ADB has supported activities to promote adaptation and disaster risk reduction, particularly through climate proofing its infrastructure investments. Donor support for climate change adaptation that builds on traditional and local ecological knowledge at the community level will help to protect livelihoods, while building resilience to hazards.
Also needing attention are environmental pressures from rapid population growth, unsustainable patterns of consumption and production, and coastal development (resulting in loss of mangrove forests and coral reefs). Combined with climate change impacts, these threaten the region’s food, water, and livelihoods.
The destruction in Vanuatu sadly demonstrates just how quickly a natural hazard can overturn development results in the Pacific. The evaluation therefore recommends that ADB’s new Pacific Strategy for 2015–2020 sharpen its engagement in the smaller island countries. ADB’s Pacific Department needs more staff and financial resources to help meet the intense development challenges in the region’s fragile and low-capacity states. The organization in turn must find innovative ways to help boost capacity in these countries to manage the public sector and, now more than ever, build resilience to climate change.
More generally, the donor community needs to be on the ground with lasting commitment in these fragile countries. It is not just a matter of quickly rehabilitating infrastructure after a storm or any other crisis. These countries need consistent, long-term support to remain viable.
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, it is owned by 67 members – 48 from the region.