Rosier future as scattered islands gain in Fiji's wake

The remote islands that scatter the South Pacific region may well find themselves cast into the international spotlight as Fiji assumes its G77 and China leadership.

It is a region that is famously home to some of the tiniest and most far-flung communities in the world.

Now, the remote islands that scatter the South Pacific may well find themselves cast into the international spotlight as Fiji assumes its G77 leadership.

For it is not only Fiji but also the surrounding islands that can potentially benefit economically from its leadership of the G77, says Emma Veve, the principal economist of the Pacific department of the Asian Development Bank (ADB).

"Fiji's chair of the G77 is a positive for Fiji and also for the Pacific," she says. "It can be expected to both raise the profile of key Pacific island issues, such as climate change and labour migration, as well as raising international awareness of Fiji and the Pacific region more widely. As such, it is likely to enhance the underlying Pacific regional trend to strengthen links with Asia in particular."

Perhaps the islands with the highest chance of benefiting from the leadership spotlight are those that, in contrast to Fiji, are politically stable, and so are less likely to deter international investors.

For a growing number of islands, the outlook is already starting to look rosier economically. Increased tourist arrivals, healthy fisheries industries and growing spending on infrastructure in recent years have recently yielded conservatively positive results for a number of small Pacific islands economies.

Testimony to this is an ADB report released this month which forecasts that the islands of Kiribati, Nauru and Tuvalu will experience accelerated economic growth in 2013 and 2014 - defying the general trend of a softening of growth in the Pacific region.

The economy in Nauru - which boasts the unlikely accolade as the world's smallest country, covering just 21 square kilometres - is expected to be fuelled by high phosphate exports and the creation of around 200 new jobs at its asylum seekers processing centre.

The tiny republic is also winning points in terms of its growing international reputation, with its current tenure as chair of the 43-member Alliance of Small Island States.

The economy in Kiribati, a parliamentary republic in the central Pacific Ocean region, is also forecast to grow over the coming year, with an increase in public construction and previously delayed infrastructure projects finally under way.

An upgrade to the airport on the island of Tuvalu is cited as a key actor in fuelling its forecast economic growth, alongside retail growth and a strong Australian dollar, in the ADB report.

Another island in the region with a positive outlook is Vanuatu, a former tax haven boasting parliamentary democracy and close economic ties to Australia and the European Union.

A strong tourism industry resulted in its economy growing by 2 per cent over the past year, countering a contraction in its previously dominant agriculture sector - specialising in tropical products ranging from pineapples to peanuts.

Tourist arrivals, mostly from Australia and New Zealand - as is the case with most of the region - increased by around 15 per cent last year, while its construction and service industries were further boosted by hosting the African Caribbean Pacific/European Union Conference.

The coming two years also look positive for Vanuatu: growth fuelled by the starting of delayed construction projects and the recovery of agriculture production is forecast at a rate of 3.2 per cent this year and 3.4 per cent next year, according to the ADB.

Another region where a healthy tourism industry is pushing economic growth are the Cook Islands, with arrivals growing by an average of 8 per cent over the past two years.

This month, the government officially opened an upgraded Avatiuport, which handles 90 per cent of the islands' sea imports - upon which the nation is heavily reliant to sustain its tourism industry.

Other islands are perhaps facing more complex challenges: Tonga is forecast to experience growth but at a low rate, with its strong tourism marketing campaigns attempting to bolster an economy with public debt accounting for around 45 per cent of GDP.

Meanwhile, Samoa's economy is still recovering from the damage inflicted on its agriculture, tourism and infrastructure last December by Cyclone Evan, estimated to have cost the independent island state around 30 per cent of its GPD.

However both Samoa and the Cook Islands are expected to benefit from recently agreed assistance from the European Investment Bank which will help to examine safety improvements and upgrade terminal facilities at its airports as part of a US$1.1 million (Dh4.04m) technical assistance programme.