Way Out of Stormy Waters for Pacific Islands | Asian Development Bank

Way Out of Stormy Waters for Pacific Islands

Op-Ed / Opinion | 19 February 2007

The Pacific islands call to mind images of paradise. Beneath this romantic veneer, however, are impoverishment and civil strife. Political and social dynamics increasingly resemble those in sub-Saharan Africa. Political upheaval in Fiji, riots in Tonga and earlier crises in the Solomon Islands and Timor Leste are some examples.

A few decades ago, when these nations gained independence, it would have been hard to imagine that the region would be concerning itself with an ever-increasing number of poorly performing states.

If Pacific island leaders cannot adopt more effective and egalitarian means of leading their people into the future, their countries will continue to languish under growing economic and social strain.

While each nation is unique, their people face common challenges, which are rooted in neglected public services and poor business environments.

Prevailing financial, legal and regulatory systems in many countries have hindered private sector development. Excessive government involvement in economic activity has often served to inhibit the delivery of goods and services that are reliable and affordable. The result has been decades of economic stagnation and an inability to generate enough resources to meet the needs of the area's young and growing population.

To compound matters, many governments of Pacific islands are insufficiently transparent and accountable to their people. The states have moved away from traditional consultative and decentralised forms of governance towards centralised and authoritarian forms of rule.

The costs of these missed opportunities are immense.

Since independence, billions of US dollars have been mismanaged. Gross domestic product per capita has actually fallen in many countries over the past two decades. Investments in basic infrastructure have lagged well behind what is needed. And poverty rates have continued to climb as populations grow.

The poor cry out for jobs, essential social services and, increasingly, security. The longer these basic needs are not met, the more citizens seek opportunities elsewhere, in urban centres or, when the chance allows, outside their countries altogether.

Although the problems confronting Pacific island nations are worrying, there is ample opportunity to change course and institute lasting reforms. Over the past decade, some nations have made significant breakthroughs, which provide markers to guide neighbours along the path of progress.

When Pacific island nations have committed themselves to more inclusive governance and introduced sound legal frameworks that encourage free-market competition while protecting fundamental rights, economic growth has ensued.

Samoa has paved the way by linking its national budget to policy priorities and creating accountability mechanisms for government spending.

In the Cook Islands, the introduction of a modern tax system, along with complementary reforms, has strengthened the country's financial position.

In both these countries, the measures have led to greater prosperity and private sector involvement. They have ensured that all citizens receive a proportionate share of social service expenditures, and in the process put a dent in poverty levels.

Other Pacific island nations should follow suit.

New policies, institutions and management systems are needed. These reforms are best realised by giving civil organisations, businesses and communities a meaningful say in the development of legal and administrative structures that better serve people's needs. This is the way forward.

With these reforms, the small, close-knit communities of the Pacific may soon begin to see the benefits of competition and inclusiveness, as opposed to protection and opaqueness.

Governments' performance will improve, families' socio-economic status will rise and greater stability will take root.

The international community can help by insisting on meaningful reforms to improve the effectiveness of development assistance.

But the solutions to the problems facing these nations - and the motivation to seriously address them - must come from within the countries themselves. If the leaders of the Pacific island nations choose wisely, Africa's predicament need not be their own.

This article first appeared in The Financial Times