MEDIA RELEASE
Released By:
McMullan
A new economic report says creative policies in labour, trade and energy management will enable the Pacific and East Timor to build economic resilience.
The report, Pacific Economic Survey 2009, engaging with the world was launched in Tonga today by Australia's Parliamentary Secretary for International Development Assistance, Bob McMullan.
The survey was prepared by the Australian Government's overseas aid agency, AusAID, and specialists from the Pacific and East Timor.
"Considering the scale of the global recession, some economies in the Pacific and East Timor have performed reasonably well," said Mr McMullan. "However, in general the recession has had an impact on trade, tourism and remittances which brings risks to economic growth. In some countries, progress towards the Millennium Development Goals is likely to slow."
The survey identifies areas where Pacific island countries and East Timor could strengthen their economies to create greater resilience against external shocks such as volatile food and fuel prices.
These areas include greater diversification of trade in goods and services, increased labour mobility within countries and around the world and improved energy management to reduce reliance on imported fossil fuels for energy generation.
"Economic history shows that countries perform better when they engage with the world, not turn away from it," said Mr McMullan. "Recent structural reforms in some countries to increase competition and build a robust private sector will enable Pacific island countries and East Timor to strengthen their economic bases and benefit more from international trade.
"For example, Tonga's renewable energy legislation will give the country more options for long-term energy solutions, especially in remote islands. Samoa's innovative oil purchasing strategy already gives it the cheapest oil in the Pacific. Aviation reform in Vanuatu is making travel to that country cheaper. East Timor is revising its corporate tax laws to make it easier to do business, Papua New Guinea is exploring ways to expand its non-mineral sectors and Solomon Islands is making progress in reducing port charges," said Mr McMullan.
The survey encourages countries to provide more training to their workforces so that people can take advantage of participation in labour mobility programs. When skilled people work for periods in other countries, they generally earn more and send higher levels of remittances back home.
The survey also proposes countries capitalise more fully on the overseas image of the Pacific as a tropical paradise and further develop tourism and niche markets for organic and other products unique to the Pacific and East Timor.
"There are already instances where quality agricultural products from these countries are being skilfully marketed and sold for premium prices in the region," said Mr McMullan. "Expanding this sector in an environmentally friendly way will help create employment, raise incomes and further reduce poverty."