Sheer Distance a Factor as Pacific Islands Seek to Boost Growth

Samoa event to discuss building resilience, fostering inclusive growth

Many Pacific island countries still to regain pre–global crisis income levels

More integration with region brings benefits, raises vulnerability to shocks

The nations comprising the Pacific islands must address the impact of their remoteness and other unique economic issues as they seek to regain income levels prevailing before the global economic crisis.

Other elements affect the Pacific islands in particular, such as small populations, narrow production and export bases, and limited economies of scale. When these additional factors are also considered, they make up a set of economic hurdles arising from the islands’ special circumstances and location.

The IMF is organizing jointly with the government of Samoa a high-level conference on the Pacific in Apia, Samoa, on March 23. The conference will discuss how to build resilience against shocks and foster inclusive growth in a region that, although geographically remote, has felt the impact of the global economic crisis.

About 120 participants are expected at the conference, including policymakers from 10 Pacific island nations and representatives from regional development partners, international organizations, academia, and the private sector.

In an interview, IMF Deputy Managing Director Min Zhu talks about the policy priorities for the Pacific, the IMF’s role in the region, and what he hopes will come out of the conference.

IMF Survey online: How has the Pacific been doing in the face of the crisis in Europe and elsewhere and what are the vulnerabilities?

Min Zhu: Many Pacific island countries are still to reach the income levels seen before the crisis and poverty has increased in some communities. Growth in the Pacific islands has been quite low over the last decade or so, averaging just 2 percent a year.

By comparison, other low-income countries in Asia have shown growth of about 6 percent, while other small states have grown by at least 4½ percent. Further afield in Eastern Caribbean Currency Union countries, which face some comparable challenges, growth has been 4 percent. Yet, strong linkages with resilient Australia and emerging Asia has helped during the global economic crisis compared to the Caribbean islands which rely on heavily on the U.S. economy.

The Pacific Islands Forum is based in Suva, Fiji...