Reduce costs, manage risk, and enable value creation that will help address the shared challenges facing developing island countries in the Pacific, says ADB's James Lynch.

The Asian Development Bank (ADB) works with small island countries in the Pacific as they address a unique set of development challenges. James Lynch, Deputy Director General of ADB's Pacific Department, explains how Pacific island countries can reduce costs, manage risk, and create value to develop their economies.

What are the key challenges facing Pacific island countries? 

Some of the key development challenges facing small island developing countries in the Pacific include not only their smallness but also their remoteness from major markets. Most of the economies are very narrow in terms of their economic base. And it goes without saying that virtually all of the small states in the Pacific are extremely vulnerable to climate change but also economic shocks.

How does ADB support development in the Pacific? 

ADB, recognizing these challenges, has prepared what we call the Pacific Approach, which is our strategic roadmap for providing development assistance to these countries. And it’s pretty much anchored on three key pillars.

The first pillar is reducing costs. And by reducing costs we mean improving access to markets through transport, and also here in Palau through the fiber-optic cable network and also through energy.

The second major priority or thrust under the strategy is to really help these countries manage risks. And as I said, both climate change risks and economic risks.

The third key pillar of our strategy is enabling value creation. And this is where we are trying to invest in human capital to build up their capacities and skills, and also looking at how the private sector can really help promote development in these countries.

What are the main sectors in which ADB invests?

Our strategy really provides the strategic direction for all of our member countries. Specifically here in Palau, with the launch of the fiber-optic cable network, clearly we will try to leverage that and look at applications across e-governance, e-health, e-education, e-commerce, and so forth.

But again, in terms of our primary investment projects moving forward, they will be anchored in the infrastructure sector. And on the softer side, in terms of technical assistance, we are working very closely with government on a range of initiatives primarily in terms of fiscal management and also trying to look at opportunities to enable more private sector participation. In that context, we are looking at public-private partnerships and other modalities to bring in the private sector.