By Richard Naidu
An Under-Secretary-General of the United Nations has urged a key gathering of finance ministers from across the Pacific to form a “unified and strengthened Pacific” as a game changer in the struggle against the increasing weight of climate change and a new era of geopolitical jostling by global superpowers.
Armida Alisjahbana, Executive Secretary of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), zeroed in on a “transformative agenda” of re-energising regional development cooperation efforts, as part of which, the Pacific “should consider promoting themselves as one region for trade and investment opportunities”.
She was speaking at a public seminar on the sidelines of a meeting in Suva, Fiji, of finance ministers from the 18-member Pacific Islands Forum.
Alisjahbana said the one-region platform “would entail utilising the competitive (or comparative advantages) of multiple countries to develop a Pacific region-wide trade and investment strategy that would attract investment across the value chain to multiple regional or sub-regional hubs.”.
Speaking after Alisjahbana, Fiji’s Finance Minister and Deputy Prime Minister, Biman Prasad said the Pacific Island Forum region “must become a fully integrated region … in the speediest possible time” because in facing the greatest challenge of its times, the Pacific “must work from this premise that all we have is ourselves … as countries that make up the Blue Pacific. And this is not inconsequential. This is powerful, and significant.”
In comments that underlined the Fijian Finance Minister’s somber depiction of a region left to fend for itself, Alisjahbana outlined the impact on the Pacific, of a contentious new global paradigm.
“For more than five decades, the Pacific family has come together to address common aspirations and challenges. Yet the increased skepticism about the benefits of multilateralism is fueling a trust deficit. The global economy is witnessing deepening development polarisation. Geopolitical challenges, policy uncertainties, and constrained fiscal space are occupying the minds of policymakers. Coupled with these challenges is the ongoing climate emergencies. The window to meet the 1.5 degree Celsius target is fast closing. Moreover, the COVID-19 pandemic has exposed existing vulnerabilities to regional supply chain and connectivity, including across smaller island economies. During the pandemic inequities in production capacity and access to essential products have exacerbated the health crisis into an economic hardship. Today, the increase in energy and food prices have constrained the recovery effort and worsened the fiscal conditions of some Pacific small island developing states.”
She said that despite these development challenges, there are priorities that the region needs to keep its focus on. “Delivering on decent job creation, investing in sustainable infrastructure development, and closing the gender gap, among other pressing goals, are critical elements to bring us all together.”
There were several key parts to regional integration, one of which was enhanced business certainty and reduced trade friction to minimise disruptions to the supply chain.
“In this regard, I encourage countries in the Pacific to take advantage of the various regional and multilateral arrangements around trade, investment, and economic partnership. These arrangements are important to advance the streamlining of trade procedures and reduction of trade costs and raise investment opportunities, which can help expedite cross border flow of goods and services. Another aspect of strengthening supply chain resilience is through establishing mechanisms to address crisis in a coordinated manner, such as by developing provisions in regional trade agreements that focus on keeping trade – particularly that of essential goods and services – flowing during times of crisis.”
Advancing the regional development co-operation agenda would require joint action to promoting greater intra-Pacific economies connectivity, widening access to development finance, connecting transport links, and bridging the digital divide “so that the digital transformation benefits all countries in the region and does not become another driver of inequality”.
Prasad said that “in order to turn our smallness into a stronger strength”, it was time to ask some hard questions, such as, whether the regional architecture was “fit-for-purpose in the context of the gravity of the challenges before us?”
He said the Pacific was now at a cliff edge and was faced with some of the harshest choices if it wanted a sustainable model of economic development.
While the climate crisis was impacting all areas of life with a previously unseen fierceness, the region was now largely falling behind on the Sustainable Development Goals and several of the SDGs were gradually becoming out of reach altogether, said Prasad. The impacts of the growing, multi-dimensional, multi-sectoral vulnerabilities were being felt “most acutely by women, by disabled, elderly, and the young”.
“So, business as usual, more of the same and incremental improvements will be the surest way to disaster for the whole region.
“The impact of climate crisis on our food and nutrition security, both on land-based agriculture and aquatic foods are substantial and worsening,” he said. “Struggling children in Papua New Guinea, malnutrition across the region and nutrition and food insecurity for most vulnerable populations are growing worrisomely. Climate change also threatens our reef systems. This new era of global boiling, as some are calling it, has the potential to trigger a near total collapse of essential aquatic food systems. It already is a reality across much of the urban Pacific that low quality imported canned fish has replaced fresh seafood as the regular meal for dinner for a lot of people.”
He asked why, at a time when the region was so vulnerable to such existential threats, must it be subject to a new era of “geopolitical contestations”.
“Why is there a growing divide between what our development partners say and what they do? They say they are with us on our existential threat, but there is a disconnect between this and the resources they offer on the table. Why is the disconnect between what multilateral banks and Global Fund say, and what they do? They know too well that the region’s adaptation to climate change cannot continue to be financed through soft loans, or even hard. The region knows too well that there are no good or bad guys in the geopolitical contestation. Of course, there is a debate about that as well. And we may say that we can blame the larger economies. But right now, 40 percent of the greenhouse gases come from the US and China.”
The future of the Pacific, said Prasad, lay in integration, as he outlined several key objectives. Pacific business should be able to “shape and expand opportunities unrestrained” and visa travel between all Forum member countries must be an immediate-term goal. The Pacific’s combined diplomacy must be brought to bear on the universe of climate finance because the window of adaptation is “closing at warped speed”.
The sentiments will have a bearing on the upcoming leaders meeting of the Pacific Island Forum in the Cook Islands in November, as the meeting of Finance Ministers informs Forum leaders of relevant regional and international economic development issues facing the region.
Pressures from the COVID-19 pandemic and Russia’s invasion of Ukraine have exposed the vulnerabilities of a region that imports more than 40 percent of its food and energy needs, with inflation diminishing the gains from a return to economic growth.
The latest World Bank Pacific Economic Update launched prior to the start of the Economic Ministers meeting in Suva has outlined that a return to economic growth post-COVID-19 of an average 3.9 percent GDP for the region will slow down to 3.3 percent in 2024 as the initial demand boost – particularly for tourism – dissipates.
Inflation is expected to remain high, projected at an average of 6% in 2023, with the potential to push vulnerable populations into poverty, the report said.
SOURCE: ISLANDS BUSINESS/PACNEWS