Pacific Islands Forum Economic Ministers Meeting (FEMM) last week considered an update on Pacific Strengthening Correspondent Banking Relationship (CBR) Project, developed by the World Bank and other development partners.
They emphasised the importance of integrating Pacific knowledge and context into the project.
The ministers voiced serious concerns over the negative socioeconomic impacts of derisking and debanking in the region.
They highlighted the imminent risk faced by some members of losing CBR and banking services.
Tiofilusi Tiueti, Tongan Finance Minister and Chair of the Forum Economic Ministers Meeting (FEMM), explained, “The issue for the Pacific is that correspondent banks are withdrawing their services due to profitability concerns.
This affects countries like Nauru, making it difficult for them to conduct overseas remittances and payments. We have developed a roadmap with support from the World Bank, Australia, and the U.S to address this issue,” said Tiueti.
Fiji’s Finance Minister, Professor Biman Prasad, also stressed the significance of banking relations for Pacific economies.
“Banking relations are crucial for our economies. Some banks withdraw due to profitability issues related to our small scale and remote location. This regional facility, funded by a US$77 million World Bank grant, will establish a process to address this critical issue. It’s an innovative and timely development,” he said.
The project will be financed by participating Forum Island Countries (FICs) through International Development Association (IDA) grants and credits from the World Bank.
Participating countries include Fiji, Kiribati, the Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu.
The project has a budget of US$77 million for six years and is expected to begin implementation by the last quarter of 2024.
