The Impact of the global economic crisis on the Pacific region

Whilst at a macroeconomic level, the Global Economic Crisis (GEC) has had less impact on many Pacific countries than on most other developing countries, impacts from the GEC are ongoing and vary greatly across Pacific countries. The crisis has manifested itself in declining exports and government revenues, falling remittances and revenues from tourism and a loss in the value of trust funds.

The economic crisis has raised questions about what form of future economic development best serves Pacific Island countries.  This report examines the impacts of the GEC on Pacific countries as part of an Oxfam International research project analysing the impacts of the economic crisis, and the responses to it across 11 countries.

The report recommends:

• governments, donors and non-government organisations should consider developing methods, to closely monitor the impacts of economic and other shocks
• international donors should assist by providing Pacific country governments with budget support to protect social expenditures, such as health and education, from being cut further
• policymakers need to consider how to improve service delivery and the effectiveness of social spending to best meet people’s needs throughout the region. Australia should continue its focus on partnership with the Pacific as a neighbour who is vulnerable to shocks
• the economic crisis raises questions about what form of future economic development best serves Pacific Island countries. Economic development is most effective when it reflects the needs of the people, and therefore donors, such as Australia, should support Pacific country governments to meaningfully engage their populations to consider their future economic development
• traditional social support systems are strong in the Pacific region and policymakers should examine how the “traditional economy”, support systems and access to land for subsistence farming can be supported and strengthened to ensure it continues to provide resilience in times of crisis
• other forms of social support should be considered to work alongside or supplement these traditional systems in cases where they are not meeting current needs, particularly the needs of women and young people