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aid, Federated States of Micronesia, Forecasts, Kiribati, Marshall Islands, Nauru, Tuvalu

How viable are the economies of Pacific Island nations: Hezel

A new discussion paper by Micronesian based teacher, historian and thinker, Francis X. Hezel says foreign aid may need to be a long term fixture in the Pacific if island governments are to continue to exist.

In his paper “Pacific Island Nations: How Viable Are Their Economies” for the East West Centre, Hezel compares economic statistics, export industries and economic develoment choices and options of various Pacific island countries.

He concludes that “few nations have been able to benefit from exports, the conventional pathway of economic development, and even those who have relied on their exports do not appear significantly better off for their trade…Fiji seems to be the only Pacific nation to have prospered because of its exports.”

Hezel says remittances can be a major contributor to the economy, and migration looks set to continue for the forseeable future.  The result of consistent migration he says,  is “to put a cap to population and limit the stress on the local economy, as well as provide a steady resource stream to assist the island population.”

But Hezel suggests other nations have no clear economic pathways to development –with no exports, little tourism and few remittances- including Tuvalu, Kiribati, Nauru, Federated States of Micronesia and the Marshall Islands—and it is in the case of such countries where aid needs to be redefined.

Hezel believes foreign aid should not be seen “simply as a means of investing in the growth of the economy…Nor should it be seen as a stopgap measure to keep the government running until the economy expands enough to form a suitably large tax base that will allow the government to become self supporting.”

He believes the Pacific may become a “testing ground” for a new vision of foreign aid –aid as part of the world community’s sense of responsibility for fellow global citizens and nation-states–and aid without an expiration date.

Hezel’s full paper can be read here.

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About Samantha Magick

Journalist and editor

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