The Performance And Prospects Of The Pacific Island Economies In The World Economy

The Pacific island region has considerable potential for development, especially in the areas of tourism, fisheries, forestry, mining, and agriculture. However, these countries face many challenges to developing their economies and raising living standards, including their small size, distance from major markets, and vulnerability to natural disasters. The first half of this book provides an assessment of regional issues. The second half includes country-specific chapters, which provide an overview of each countries economic performance since independence and the main challenges ahead.

In an earlier issue of Pacific Islands Policy, Francis X. Hezel, SJ, examined the economic performance of the Federated States of Micronesia (FSM) and the Republic of the Marshall Islands before and after independence. Despite abundant start-up funds from the United States and advice from consultants on how to create future prosperity, self-sustainability for these island nations remains as elusive as ever. This report is an attempt to answer the question: Are FSM and the Marshall Islands unusual in this respect or are all small Pacific Island nations waging a losing battle in their attempts to create more self-supporting economies? Development economists frequently argue that with the right policies in place and necessary reforms implemented, any nation, whatever its limitations, can develop a successful economy. In this report, Hezel looks at the record to find out how the Pacific Island nations have fared in this respect since independence. Having abundant exports doesn't always translate into a strong economy, he finds, since the two most richly endowed countries in the region are among the poorest in quantified per capita income. Most of the nations in the region, though, are resource-poor and so have had to turn to other strategies for economic development. The pathways to economic development for a small island nation, especially one that is remote and enjoys limited resources, are few and steep. Only one of the Pacific Island nations is close to full economic self-reliance at present, while one or two others may be within striking distance. The rest--and they are the majority--seem to have no real prospects for full self-reliance. Hezel asks what this somber but realistic view of the limits of economic growth in the Pacific might mean for larger nations with a stake in the Pacific, such as Australia, Japan, the United States, and China. Foreign aid, he suggests, may not be just a stopgap to achieve economic self-sufficiency, but a permanent requirement for nations that will always come up short of this goal.

This sixth annual study focuses on the effects of globalization on developing countries and the growing divide between fast and slow- integrating economies. It describes current trends in integration and answers key questions on trade and on commodity-reliant economies. The book examines two questions in particular detail: Will trade liberalization work? The report argues that countries that embark on trade liberalization in the current environment are likely to be rewarded and recognizes that genuine adjustment costs exist and that complementary reforms are important. How can commodity-reliant countries enhance productivity and diversify exports? Although many of these countries have been among the high growth, fast integrators, many others have been poor performers. Successful exporters are characterized by high productivity in existing commodity sectors, the capacity to diversify to non-traditional commodity exports, and the maintenance of economic stability. The report projects continued rapid acceleration of integration over the next decade, with moderate import growth in the developed countries and continued sharp import increases in developing countries. Those countries that continue to reform their economies and expand their participation in the world economy will be in a position to take advantage of the resulting opportunities; those that do not, risk falling further behind.

Covers trends from 1981 to 1991. Provides an overview of important developments and issues, noting, interalia, the increasing economic role of women.

This comprehensive volume examines the future effectiveness of regional institutions as well as key questions concerning the attempts to overcome ongoing serious problems of security, governance and poor economic performance in the Pacific.