Weathering the Storms

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    Op – Ed by Caleb Jarvis, Australia’s Trade and Investment Commissioner

    Across the world, we are experiencing an overwhelm of global crises. The continuing implications of the ongoing impacts of COVID-19, international conflicts, heightened climate recovery efforts, and interrelated social and economic tensions, are all placing cascading pressure on the world economy, world leaders, and our international community.

    Many developing countries, including the Small Island Developing States and nations that make up the Blue Pacific, are set confront some of the most dramatic challenges of our modern times. Compounding the existing and nuanced pressures that developing nations invariably face, there is a downpour of additional global stresses that will require more than formidable local leadership.

    Weathering this amalgamation of storms will take more than the remarkable strength and resilience of the Pacific ‘family’, which has been tried time and time again. It will require a transformation in relationship with neighbours and long-time friends.

    With a newly elected government at the helm, Australia is being called to do more than step-up and step-in when it comes to the peace and prosperity or Pacific. Rather, Australia is being tasked with learning to move ‘in-step’ with the many sovereign nations of the ocean we call home. With heightened mutual understandings and decision-making, Australia has the opportunity to ensure the region walks side-by-side through these challenging times together.

    If our intertwined economies are to overcome this period successfully as a unified Pacific, we must first understand the path that led us here. We must recognise how the recent conglomeration of ‘unprecedented times’ have impacted the least responsible and most vulnerable. We must take the first steps towards mutual understanding, by walking in each other’s shoes.

    In early 2020, COVID-19 triggered one of the worst employment crises since the Great Depression, with job losses and labour shortages being faced simultaneously worldwide. Inflation began to surge in many economies due to soaring commodity prices and pandemic-induced supply-demand imbalances. On the fiscal side, policy space was slowly eroded by necessary COVID-19 related spending. This all happened at a time when debt levels in low-income countries, including many in the Pacific, were already significant, with a World Bank report finding that almost 60 per cent of low-income countries were in debt distress or at high risk of it. Since then, this figure has only increased as the cost of servicing borrowing continues to grow.

    The early days of the pandemic saw trade route disruptions and pressurised supply chains impact the Pacific tremendously. In a region that isolated and remote, trade routes being scaled back, rerouted, or ceased, cut entire countries off from the world. Airfreight too dwindled, as most Pacific airfreight is carried on passenger aircrafts, which were drastically reduced in response to closed international borders. These challenges were, and continue to be faced, on top of the health crisis.
    Russia’s invasion of Ukraine earlier this year, caused a heartbreaking humanitarian crisis in Eastern Europe, and corresponding sanctions that have proceeded to have significant impacts on the global economy. As Russia is a major supplier of oil, gas, and metals, and, together with Ukraine, of wheat and corn, the current and anticipated decline in the supply of these commodities has already driven their prices up sharply. While Europe, Central Asia, and the Middle East-North Africa region are the most affected, the food and fuel price increases hit middle and lower-income households globally, including those in the Blue Pacific region.

    Further still, the bottleneck in global supply chains is far from over, with frequent and wide-ranging lockdowns in China are slowing activity in key manufacturing, causing extraordinary flow-on effects trickling right through to the Pacific region. While it may appear that the global economy is on a slow but steady mending path from the catastrophic COVID-19 pandemic and the crises that followed, that is not the case the world over. In fact, there are significant discrepancies between the recoveries of advanced, emerging and developing economies. For many communities, it has not been one crisis after another, it has been an avalanche of overlapping threat, upon already strained economies.

    This is particularly noticeable here in the Pacific where some island nations are only now seeing COVID cases soar for the very first time, leaving many facing the ever-compounding impact of a global food crisis, health crisis, supply chain issues, and global inflation simultaneously.

    Of course, here in the Pacific, perhaps the most tremendous storm we are weathering is the constant threat of the increasing and worsening real ones. The economic costs of the Climate Crisis and associated loss and damage, this already large and only set to increase. In the 1990s, extreme weather cost the Pacific region more than $1 billion. In 1990 and 1991, cyclones Ofa and Val alone cost Samoa $440 million, which is more than the country’s gross domestic product. In early 2005, the Cook Islands faced five cyclones within 5 weeks, four of which were Category 5. In 2008, Fiji lost $32 million to Cyclone Gene, forcing the government to provide $1.2 million in food rations. Assuming the world does not deviate from its business-as-usual scenario, the total cost of climate change in the Pacific will continue to grow prohibitively high over the long-term, reaching 12.7% of annual GDP equivalent by 2100, which is an alarming figure.

    As one contemplates these many challenges, it cannot be disputed that we are contending with extremely difficult times. Despite this, the trials and tribulations we are facing as a region, are not insurmountable. Instead, they call for robust relationships, sincere conversations, and innovative collective solutions.

    One such solution private sector development throughout the region. We have long known thriving private sectors are paramount in creating mutual economic growth and improved relationships between nations. Good quality investment, sustainable value-added exports, and digital innovation, coupled with unrestricted movement of labour across the region, would go a long way to shifting the dial of partnership. A perfect arena to practise instilling comradery values into processes, is Australia’s current Kava Pilot Program. As phase two begins in earnest, we can imagine what a truly industry fostering model could look like. One that allows for a prioritisation of Pacific products within regulatory and administrative processes. Bio Security controls in Australia are cumbersome, bureaucratic and restrict the export of fresh produce from the Pacific to Australia. The case in point is that it took Bio Security Australia 90 years to approve the importation of NZ apples. We require a system that is designed to allow Pacific products into Australian markets with ease, rather than the many expensive, cumbersome, and often intrusive administrative barriers currently in place.

    Another solution that would both resolve tensions and create countless gains, is the improvement of mobility access for Pacific people into to Australia, whether for work, travel, or migration. Pacific labour mobility provides significant economic benefits for the Pacific countries, Australian employers, and all people involved. While Australia has established several labour mobility schemes, there is a need to ensure that workers are not subjected to exploitation by unscrupulous employers. Access must come with dignity. These schemes must account for longer stays, consider accompanying families, possibly even allowing for permanent migration, particularly as the concept of climate migration comes to the fore.

    Finally, Australia’s stance on the Climate Crisis must change. It has become untenable in the Pacific, where the issue is more than a political football for many. Solving this divide, is essential to achieving unity in the region. The inability of Australia to meet Pacific Island expectations thus far, has undermined Australia’s relationship and leadership credentials in the region. It has also provided windows for other countries to grow influence in the islands. Meaningful climate actions, including implementing domestic policies to reduce emissions and fossil fuel extraction, will go a long way to mending fractures within the Blue Pacific.

    As observed recently by Dr Tess Newton-Cain, ‘Australia and the island members of the “Pacific family” share more than just an ocean. They have many common challenges. Addressing them requires sharing resources [1]’. The recent turbulence and challenges ahead, can simply be view as a conch call for us to gather and share what we can with each other. It is a call to move away from viewing sovereign nations as ‘strategic locations’ or as belonging to a ‘backyard’. It is time for listening, for applying lessons, and for moving forward together. It is time for us deliver all that is needed for the long-term stability, and sustainable prosperity of the Blue Pacific. After all, if there is one thing this time has taught us, it is that the Pacific is not only strong, but stronger together.

    For further information, please contact:
    Michaela Long
    michaela@pacifictradeinvest.com
    m: +61 449 563 263.

    SOURCE: PTI AUSTRALIA/PACNEWS