Tuesday, 13 April 2010

• World Bank's Ivailo Izvorski Answer to Fiji Czars FTA Question on Pacific Islands

  

   

  Interview with Ivailo Izvorski and Vikram Nehru on East Asia and Pacific Update 

   

  April 12 2010

   

  Fiji Czar:

  Are Free Trade Agreements such as PACER PLUS in the Pacific Islands conducive to the goals of the World Bank? What are the consequences (if any) of small Pacific Island nations NOT entering into PACER PLUS, in light of other emerging Pacific Rim agreements such as the US Trans Pacific Partnership?

   

  Ivailo Izvorski:

  Dear Fiji Czar, thank you for the question.

   

  Firstly, note that the World Bank strives to help countries reduce and ultimately eliminate poverty and boost living standards.The Pacific islands face unique development and policy challenges, given the small size of their economies and population, the significant distance to large markets, and exceptionally high dependency on single sectors. And if the global economy grow more slowly in the medium term than before the crisis, these challenges will not get easier.

   

  While there are numerous long-term challenges confronting this group of countries, it is worth highlighting several where potential solutions are feasible.

   

  The first is aid coordination and aid predictability. Stable and predictable aid is needed, in good times and bad, to help support reform efforts across the region. Catastrophic risk insurance instruments need also be created to ensure resources are available when natural disasters hit.

   

  The second is to overcome the costs of distance and isolation by facilitating the quiet telecommunications revolution taking place in the Pacific. That “revolution” has helped reduce costs of telephone calls, internet access, long-distance transactions, information flows and service delivery, helping reduce distances previously thought unbridgeable.

  And thirdly, and this is where your question comes into focus, is the importance of sub-regional integration. The most important among many steps undertaken are efforts to implement sub-regional agreements on the management, conservation, and development of fisheries; develop regional arrangements for marine mineral resource management; and implement key regional agreements to promote the freer movement of goods and services.

  There is also considerable potential for deepening integration with the nearest large market, which for the Pacific Islands mostly means integration with Australia and New Zealand.

  Most recently, temporary migration schemes with New Zealand and Australia have been at the forefront of this agenda. New Zealand now runs a Recognized Seasonal Employer program that allows up to 8,000 temporary migrants from the Pacific islands to work in the country’s horticulture. Such efforts can be expanded, particularly given Australia’s need for large numbers of temporary agricultural laborers. 

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