Deficits, global uncertainty worsen climate threat

The ongoing challenge facing Pacific Island countries to build climate change and disaster resilient infrastructure will only worsen for economies facing continuous fiscal and current account deficits.

Chair of the 2019 Forum Economic Ministers Meeting (FEMM), David Adeang, said this during his opening remarks at the Pacific Island Forum Secretariat in Suva, Fiji.

Global economic growth for 2019 is expected to be lower than anticipated reflecting a slowdown of the global economy at the end of 2018, ongoing US-China trade tensions and continued uncertainty surrounding BREXIT.

Adeang says any impact on the Pacific will likely be felt through major trading partners, though the outlook remains rather positive for them with economic growth expected at 2.4 percent.

However he said the most significant impacts for all Pacific economies will continue to be those associated with climate change and disasters, and stressed the need to prioritise resilient infrastructure investment.

“Our ability to build explicit buffers to shocks and stressors to withstand the impacts of climate change and disasters is our constant challenge,” he said.

Adeang noted that challenge is deepened for developing Pacific economies facing fiscal and current account deficits.

He said investment in public infrastructure will determine growth for all our economies in the immediate term.

“However, given that climate change and disasters remain the greatest threat to our economies, it is crucial that such infrastructure investment prioritise resilience, including at the community level. To that end, I look forward to the robust panel discussion on resilient infrastructure development by our colleague Ministers at the FEMM Public Seminar.”

A proposed fund to assist Pacific economies address this issue is the Pacific Resilience Facility (PRF), a regional fund to assist governments, businesses and communities in the Pacific build climate change and natural disaster resilient infrastructure.

The PRF aims to provide contextualised and affordable products to governments in the form of grants or concessional loan, the private sector (concessional loans), and communities through Civil Society Organisations (as grants).

Adeang reminded Economic Ministers to rethink standard approaches to sustainable economic development both within Pacific economies and as a regional collective.

“The four substantive agenda items before you today seek to do just that - with the aim of moving us Towards a Resilient and Sustainable Pacific. In different ways, each of the policy issues for our consideration focuses on mobilising development finance for a sustainable and resilient Blue Pacific. Our officials have considered thoroughly the various policy options outlined in the policy papers and have put forward a set of recommendations for our discussion and decision.

“Before I conclude, I do offer one final thought - deepening Pacific regionalism is a long-term initiative that requires political settlements to be reached amongst sovereign states – this takes time. The persistence of differences of opinion within any collective is a norm typical to multilateralism.

“However, we do not give up but rather persist with open and respectful dialogue and critical analysis of the issues, always with our eye firmly fixed on the goal of a resilient, sustainable and viable Blue Pacific,” said Adeang.

Papua New Guinea is represented by High Commissioner to Fiji, Lucy Bogari.

Other Participants at the FEMM include:

  • Chris Legg, Chief Adviser, Treasury (Australia)
  • Mark Brown Deputy Prime Minister and Minister of Finance (Cook Islands)
  • Sihna Lawrence, Secretary Department of Finance & Administration  (FSM)
  • Aiyaz Sayed-Khaiyum, Attorney General and Minister for Economy, Public Enterprises, Civil Service and Communications (Fiji) 
  • William Vanizette, Director of Economic Affairs (French Polynesia)
  • Dr Teuea Toatu, Minister for Finance & Economic Development (Kiribati)
  • David Adeang, Minister for Finance (Nauru)
  • Sandrine Bellier, Adviser Economic Cooperation and Trade (New Caledonia)
  • Fletcher Tabuteau,  Parliamentary Under-Secretary to the Minister of Foreign Affairs, Minister of Disarmament and Arms Control and Minister for Regional Economic Development (New Zealand)  
  • Elbuchel Sadang, Minister for Finance (Palau)  
  • Brenson Wise, Minister of Finance (Republic of Marshall Islands)
  • Sili Epa Tuioti, Minister of Finance (Samoa) 
  • William Soaki, High Commissioner to Fiji (Solomon Islands)
  • Dr Pohiva Tu’i’onetoa, Minister for Finance and National Planning (Tonga) 
  • Maatia Toafa, Minister for Finance and Economic Development (Tuvalu)
  • Gaetan Pikioune, Minister of Finance (Vanuatu)

(Photo credit: Luis Ascui)               

Cedric Patjole