Interview with Tuiloma Neroni Slade, Secretary General of the Pacific Islands Forum (PIF)

To what extent did the global economic crisis affect the region?

The global economic crisis was felt throughout the Pacific region, although the cause and effects differed from country to country. A significant consequence was the loss of remittances. Countries such as Samoa and Tonga are among the highest per-capita recipients of remittances in the world, and the impact of the global crisis in countries like the USA, Australia and New Zealand meant that these fell as unemployment of Pacific people in those countries rose, especially in lower-skilled industries. This put strain on both communities and national budgets.

Countries including Tuvalu and Kiribati have trust funds that are invested in international equities. They use the returns from these funds to help finance national budgets. The fall of global share markets resulted in these countries receiving less revenue at a time when communities required additional assistance, which put significant strain on their national budgets and meant that spending had to be reduced.

Many Pacific countries are particularly dependent on tourism for their major source of revenue, including Palau, Cook Islands, Vanuatu and Fiji. Declines in tourist numbers meant that tourism-related employment were lost, especially among lower-skilled workers, and the loss of income for national governments from hotel and exit taxes meant that again budgets were cut at a time when many foreign nations were increasing spending to stimulate their own  economies.

And finally, a long-lasting impact on the region has been the decline in investment. Many major projects were cancelled, or put on hold, particularly those in the tourism industry. Locally, businesses found it more difficult to borrow from banks and this has stopped expansion and improvement at the national level. This has been a significant setback for business activity in the region, and we are only now starting to rebuild.

You recently signed in Brussels a Memorandum of Understanding to encourage others to join forces on climate change. How is this progressing?

A 3-day workshop on streamlining climate change into national development frameworks, a policy dialogue and a Ministerial meeting was undertaken in Port Vila, Vanuatu in March 2011 to map out a plan of action to take this agreement forward. The outcome of the conference will be circulated by the European Union out of session.

What sort of contribution can the European Union (EU) make to Pacific integration in view of the fact that New Zealand and Australia dominate in the region economically?

While there is no doubt that Australia and New Zealand are the Pacific region’s largest economies, and both are important development partners, the European Union has demonstrated leadership in a number of areas that support regional economic integration. Not least, the EU leads by example and there are important lessons for the region to learn from the European Union’s experiences with integration. The integration of less developed economies into the EU demonstrates the challenges and benefits of regional integration.

The EU’s leadership in areas such as Aid for Trade and Climate Change has been particularly important as the Pacific grapples with the multiple challenges that it faces.

Aid for Trade will continue to be very important, particularly as the Economic Partnership Agreement (EPA) with the EU reaches a conclusion. The Agreement will only benefit Pacific countries if the private sector is able to take advantage of new market access. Work to improve customs management systems, develop value-added agricultural industries and promote trade to Europe is being supported by the EU and will be essential if the Agreement is to increase trade with the Pacific.

Do the poorer states of the region require more development funds?  

There is no doubt that more, and more effective, assistance is required if Pacific island countries are to increase their development and achieve their Millennium Development Goals (MDGs). Education, healthcare and basic infrastructure require considerable additional assistance if they are to meet the standards necessary to provide decent lives for Pacific communities. The assistance of the global community is vital if the MDGs are to be achieved.

To this end, the Forum Compact on Strengthening Development Assistance brings development partners, including the European Union, together to improve aid effectiveness and increase regional harmonisation and coordination. The Compact is a partnership with Forum island countries, and is based on principles of mutual responsibility and accountability. The Compact is leading the way in improving the way aid funds are effectively managed and spent in the region and will help to produce outcomes that truly assist the people of the Pacific to live free and worthwhile lives.

What is the value of an Economic Partnership Agreement (EPA) between the Pacific given that trade flows between the two are very small?  

Fisheries industries hold the greatest promise for sustainable growth in Pacific island countries. Fisheries is a key sector for the Pacific and a significant driver of revenues and growth in many countries, both through fishing licenses and through onshore industries.  Onshore industries are particularly important to the region, as they are labour-intensive and provide jobs in countries where very few opportunities for employment are available.  A number of countries have canning industries, and Papua New Guinea’s canning industry has a significant export market in Europe thanks to the Rules of Origin concessions negotiated in the interim Economic Partnership Agreement.

Through the negotiation of the comprehensive Economic Partnership Agreement, the region aims to increase the amount of fisheries exports to Europe, particularly in fresh and frozen fish. Even small countries can establish industries to process fish for freezing and smoking, and these industries provide large numbers of safe, secure jobs, particularly for women. It is very important that fresh and frozen fish be granted concessional Rules of Origin in the Economic Partnership Agreement with the European Union if the Agreement is to be truly development enhancing.

Do you feel that the EU’s Overseas Countries and Territories should be better integrated  into the Pacific integration process?

The OCTs have strong ties with Europe, which makes their economies a little different from others in the region. The OCTs are very important to the region, and are involved in many of the regional integration processes through their associate membership and observer status with the Forum and also with their membership of the Secretariat of the Pacific Community (SPC).

What is the continued value of the African, Caribbean and Pacific (ACP) association of states?

The ACP grouping is a very important forum for Pacific island countries. It provides a group of peer countries with pertinent lessons and experiences to share, and which come together to lobby for common interests. The Pacific island countries value the ACP very highly, and there is substantial Pacific island representation in Brussels as a result.

China is interested in exploiting the Pacific’s resources, notably gas and oil in Papua New Guinea. Do you foresee a diminished role by Europe and the West in the region?  

China is an increasingly important partner for most Forum Member economies, both as a source of imports and in export industries such as minerals and energy, fisheries, and increasingly tourism. Its growth is benefitting the region now and with long-term prospects for the future. One of the major challenges for Pacific island countries is diversifying their export base, and where possible to ensure that an over-reliance on one or two major partners does not render their economies more vulnerable in times of crisis, as we saw during the Global Economic Crisis. In that sense there is need to ensure effectively coordinated and quality partnerships with major countries including China.
 
There are still many opportunities for European Member States in the Pacific. Too few Europeans have visited the many attractive tourist destinations in the region, and we would welcome more European visitors to experience the pristine waters and diving wonders in Palau, swim with whales in Tonga and enjoy the exotic beaches in the Cook Islands. European investment could boost industries such as the fish processing industry, mineral waters and beauty products. The organic, high-quality tropical agricultural produce of the region could be sold in European speciality stores. So I believe there are still many untapped opportunities for trade with European countries and, through the EPA, I hope countries of the European Union might be able to explore far greater and more diverse trade opportunities with the Pacific