Weathering the hardships

Ministers talk about surviving the global recession in the Pacific

The three day Forum Economic Ministers Meeting (FEMM) began on Monday 26 October with Economic Officials agreeing on a summary of the key issues to be discussed at the Forum.
Top of the agenda is the impact of the global recession on the economies of the various Pacific nations with each to present individual country reports to the Forum on how they are weathering the hardships arising.
According to the official report from Australia and New Zealand commissioned by their respective Prime Ministers, demand, output and employment have fallen internationally.
Pacific economies are feeling the effects, some countries more than others such as Nauru which reports their annual budgets go toward essential services of health, education and infrastructure and are doing their best to finding ways to reduce their discretionary expenditure. They have virtually nil in cash reserves which has meant they have been unable to attract a bank to their country Nauru has appealed to the international aid agencies to cut the red tape in order to fast track aid to their country.
Samoa and Tonga also attracted a lot of sympathy on account of the effects of the double whammy of the tsunami and the global recession. Unemployment and high inflation and the contraction of the GDP (gross domestic product) are key concerns but surprisingly, their tourism and remittances have not experienced any negative impact (so far). However, the figures were prepared before the tsunami hit and so the forecasts are bound to be revised accordingly.
The change in United States labour policy re minimum wage rates has adversely affected employment opportunities in American Samoa where 60% of the workers are from Samoa. Imported food prices are rising at the same time that there is a slowdown in construction and manufacturing.
On the bright side, they are trying to up their agricultural production, and looking toward renewable energy especially solar and wind as well as aiming at energy efficiency management eg their Parliament has just passed a Daylight Savings Act whereby as of 2010, they will change their business hours in order to have one extra hour of daylight as a way of energy saving.
Tuvalu says their strategies to cope with the global recession include a tight fiscal policy such as the introduction of their new Audit Act 2008 which gives their Auditor-General more clout than before. Their country partnerships are with European Union, Asian Development Bank and Republic of China. Vanuatu say the global recession is affecting them economically and socially but their issues were already tabled and circulated at a recent Forum meeting held in Port Vila and still stand.
Papua Niugini was represented by their High Commissioner, Senator Sherry, as their Finance Minister is currently trying to ensure that the government Budget is successfully passed in the House. PNG has gone from positive growth of 2.5% in 2008 to minus 2.2% in the current year. There has been a low demand for goods and services and they have begun some micro-reform on the communications and transport industries. Moderating influences are very strong commodity prices which have shielded PNG somewhat as well as a vibrant private sector. Challenges include extreme ethnic diversity, population dispersion and health issues such as HIV and Aids. However, relative political stability has been achieved (eg by limiting the invoking of votes of no confidence) which has led to policy stability.
The final country report before the lunch recess was from the Cook Islands and was presented by Associate Finance Minister, Junior Maoate followed by a brief overview of the Cairns Compact (see separate report) adopted at the 40th annual meeting of the Forum leaders held in Cairns, Australia from 4-6 August 2009.
The FEMM conference was held at the Rarotongan Beach Resort and Spa and ends Wednesday 28 October 2009.
In the weekend prior to the start of the conference, Ministers visited Aitutaki.

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