The Pacific Islands may present a vision of paradise, but their financial situation is less than idyllic. The disparate nations, with a total population of 2.3 million and covering 15% of the world’s surface, are striving to create economies that do not depend on tourism.
When up to half of its gross domestic product comes from the tourist industry, a nation is at significant risk from climate change. If a cyclone hits an area with luxury resorts, earnings could be slashed for years to come.
With this in mind, Pacific Island nations are moving into providing services such as international call centres, making use of native English and French speakers, and healthcare services for the affluent Australian and New Zealand market.
A third growth area is financial services, which is perhaps the most challenging. Pacific Island nations are still fighting blacklistings which stop them from engaging fully in the international markets. Most recently, the EU has blacklisted several countries due to their tax regimes.
Lacking their own funds, Pacific Island nations need international support. Getting the funds they need is not always easy, although China has become a partner ready to offer loans. This has proved unpopular among Western observers, who question China’s motives. But the island nations strenuously deny that they are being exploited.
What the Pacific Islands really need is support that goes deeper than aid loans, rather than lectures on how they can do business. Perhaps they would benefit most from a change in image, as a region with services to offer and diversified economies primed for growth.
