Bangkok (UN Information Services) – Pacific island economies are largely expected to see continued growth into 2008, but political uncertainties and rising numbers of people seeking employment need to be addressed to sustain economic development, according to the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
In its Economic and Social Survey of Asia and the Pacific, ESCAP said the Pacific economies generally experienced “modest growth,” with individual countries benefiting from higher commodity prices, expanded tourism and construction, as well as infrastructure spending.
“Papua New Guinea continued to benefit from mineral and petroleum prices, which have been rising since 2003. The economic boom has spilled into the non-mining sector, which includes retail, construction, agriculture, forestry and fisheries,” ESCAP said.
Solomon Islands’ real gross domestic product grew strongly through 2007 due to increased logging and log exports. But a coup in Fiji in December 2006 led there to uncertainties, falling tourist arrivals, worker layoffs, a fall in wholesale and retail trades and a freeze on private sector investment projects.
The island states of Kiribati and Nauru faced special issues. Kiribati remains highly reliant on income from fishing licenses. Although Nauru gained from investments in phosphate mining infrastructure, growth in 2007 and 2008 is expected to be negative.
Palau expects growth buoyed by tourism arrivals and infrastructure project development. Samoa also reported growth in tourism and construction, as well as strong remittance receipts. But Tonga’s growth was undermined by civil unrest, affecting both commerce and tourism.
ESCAP supported recommendations for the privatisation of public and semi-public utilities to raise efficiencies. ESCAP also called for liberalization of the Pacific telecommunications market which could lower service costs and mitigate the effects of geographic isolation.
The need for employment opportunities amid increasing numbers of young people seeking to enter the workforce remains a long term concern for Pacific island economies. Women are also underrepresented in formal employment.
ESCAP noted that a 20 per cent increase in employment in Fiji between 2004 and 2015 “is plausible if tourism growth continues.” But for the smaller states “the prospects for employment growth is weak.”
“With 45 per cent of the population in the 15-24 age groups the labour force in most Pacific island developing countries is young. Unemployment in this age group is widespread, and many youths are underemployed in subsistence work” ESCAP said in its Survey said. It also noted that while overseas remittances were a key source of revenues, they also led to a reduced pool of human resources.
ESCAP called for “substantial improvements in the investment environment,” together with a review of legislation for labour and employment “to respond to changing macro-economic and business conditions.”
Further information on the Survey can be found at:
For more information, please contact:
Hak-Fan Lau, UN Information Services, ESCAP
Tel.: +66-2-288-1866, Mob.: +66-84700-1147
Ari Gaitanis, UN Information Services, ESCAP
Tel.: +66-2-288-1862, Fax: +66-2-288-1052