Wed, Aug 12, 2020 page6

• Virus Outbreak: Pacific nations face instability and hunger

  IMBALANCES: While the worst of the COVID-19 pandemic has so far spared the Pacific, its economies are in free-fall, the region’s chief diplomat has warned

  • The Guardian, SUVA
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  Beyond the health and economic crises of COVID-19, the global pandemic has the potential to cause political instability and undermine state security across the Pacific, the region’s chief diplomat has warned.

  Pacific Islands Forum Secretary-General Meg Taylor said that the region’s economies were struggling with the virus-induced shocks, and a prolonged crisis could worsen existing problems of hunger, poor healthcare and state fragility.

  “COVID-19 has exposed and exacerbated systemic and structural imbalances in our systems and societies, underlining the urgency for decisive policy action,” Taylor said.

  

  Two men fish in Suva, the capital of Fiji, on Sept. 15, 2014.

  Photo: AFP

  “If I look at this from what’s happening within communities and different countries, I think some countries are getting harder hit than others, and I think where we’ve seen unemployment, we’ve seen people really struggle,” she said ahead of a virtual meeting of forum’s economic ministers yesterday.

  “We’re seeing in places like Nadi low employment and lots of young mothers and carers with children who do not have sufficient resources to be able to feed themselves,” she said.

  Extreme poverty in the region could increase by more than 40 percent, the Australian think tank Devpolicy found.

  Taylor said the region was threatened by health, economic and the ongoing climate crises, all of which require decisive action from governments.

  A severe virus-related economic fallout threatens the economic, political and social fabric of the region.

  In response to questions about COVID-19’s impact on political stability and state fragility, Taylor said: “Do I want to go further and predict that there’s going to be unrest? I would hope that there wouldn’t be. But I think … there may be disruptions. People are afraid of what is happening.”

  Government revenues across the Pacific have been devastated by precipitous drops in tourism, and the shutdown of export and import industries.

  Most Pacific countries are forecasting economic contractions this year, with recovery not expected until next year or longer.

  Among the hardest-hit are tourism-reliant countries such as the Cook Islands, Fiji and Vanuatu, because of border closures and lockdowns, described as “catastrophic.”

  Tourism makes up 40 percent of Fiji’s GDP.

  The IMF recorded a 99 percent drop in tourist arrivals to the country in May compared with the same month last year.

  Fiji’s economy is forecast to decline by 21.7 percent this year, the most of any Pacific nation.

  Tourism recovery will largely depend on tourists from Australia and New Zealand, but with the worsening COVID-19 situation in Victoria, Australia’s borders might stay shut for some time.

  Remittances, a lifeline for many Pacific households, are also expected to decline by 13 percent, according to the World Bank.

  This represents a huge downturn for Samoa, Tonga and the Marshall Islands, where money sent back by overseas workers account for 40 percent of average household income.

  There are growing concerns that Pacific governments might use the virus to justify accumulating unsustainable debt.

  Fiji has announced a 2 billion Fijian dollar (US$937.2 million) stimulus package, largely financed by loans, pushing its debt to GDP ratio to 83.4 percent.

  Similar scenes are being played out across the region, where governments lack the fiscal space or cash reserves to mount a serious response to long-term crises.
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