PACIFIC POSSIBLECONSULTATIONS OF CONCEPT

Franz Drees-Gross, Country Director, Timor Leste, PNG and Pacific Islands

Robert Utz, Program Leader, Timor Leste, PNG and Pacific Islands

Venkatesh Sundararaman, Program Leader, Timor Leste, PNG and Pacific Islands

Timor

Leste

Study Countries for Pacific Possible

Why Pacific Possible?

Why Pacific Possible?

Achieving higher economic growth and improved

standards of living is a key challenge for the Pacific

Remoteness, small size, and dispersion limit economic

opportunities

Manufacturing-based, export led growth not a

feasible development model for most PICs

Fully exploiting a more narrow set of economic

growth opportunities is therefore key

What is new?

Pacific Plan, Pacific 2010 and Pacific 2020 offer wide coverage of development issues

Thin capacity constrains implementation of wide reform agendas

Focus on a few potentially transformative economic opportunities and challenges

Seek to quantify the potential magnitude of these opportunities while managing a number of key risks that would otherwise undermine the development gains

Long-term perspective and focus on linkages among issues

Offer new ideas on development opportunities

Based on the understanding that progress will require action not only by PICs, but also by developed and large countries in the region and by development partners

A combination of advocacy on some issues and a stock take of others

Pacific Possible will not…

Provide a comprehensive assessment of all development issues

Offer a regional or national development roadmap – Pacific

Possible is intended as an input to a development vision that must be

developed by PICs and their regional organizations

How will we do it?

Currently consulting on focus before formulating a

concept note

Seeking wide partnerships – especially with regional

organizations and academic and research institutions

Preserve independence by having other development

partners engaged through consultations, peer review

etc. but not joint authorship

Once issues have been identified and agreed,

commission back ground papers seeking collaboration

of leading experts inside and outside the region

Timing

Convene consultations on draft background papers

(second half of 2015)

Prepare overall Pacific Possible report (First half of

2016)

Consultations on draft report (mid 2016)

Dissemination (second half of 2016)

Six proposed themes

• Harnessing the Riches of the Pacific Ocean

• Islands in a Sea of Knowledge

• Host to the World

• Labor Mobility

• Managing Increasing Stress on Pacific Livelihoods

• Working Together

1. Ocean Resources (i): Fisheries

1. Ocean Resources (i): Fisheries

Oceanic and coastal fisheries central to many PIC economies

Large revenue gains since introduction of Vessel Day Scheme

Scope for further gains through improvements to VDS and

expansion to long line fisheries, albacore, etc

Options for enhancing employment and public-private

partnerships require review

Coastal fisheries important for subsistence and incomes as well as

employment

Scope for aquaculture

Conservation issues and trade-offs important

Managing revenue and avoiding resource curse critical

1. Ocean Resources (ii): deep sea mining

1. Ocean Resources (ii): deep sea mining

Several PICs have large EEZs: Kiribati (3.6m km2), PNG (3.1m km2), FSM (3.0m km2), RMI (2.1m km2). Growing interest in 3 types of DSM deposits: seafloor massive sulfides (SMS), cobalt-rich crusts (CRC); and manganese/polymetallic nodules (“nodules”).

Hundreds of DSM exploration licenses issued over past 5 years over 1.5m km2

of ocean floor mostly in “The Area” (ISA, Clarion-Clipperton Fracture Zone, CCFZ) but also in national jurisdictions (PNG, SI, Vanuatu, Fiji, Tonga). First mining lease (PNG, Solwara 1, SMS, 2011 with Nautilus. Production in 2018?). SI next?

Companies from China (COMRA), Korea (KIOST), Canada (Nautilus), Neptune (US), UK, India, Japan, Russia, France, Germany, etc.

Could be an important source of revenue, but also important concerns, often by extrapolation of on-shore failures: (i) environmental damage ( on-shore mining, logging); (ii) social unrest ( mining); (iii) failure to capture proper returns ( fishing); and (iv) management of revenue streams (phosphates).

Clear need for adequate regulation of licensing, environmental impacts, taxation etc. to avoid an unmanageable situation.

Stock take of current situation and prospective opportunities and challenges.

2. Islands in a Sea of Knowledge

2. Islands in a Sea of Knowledge

Most PICs have invested in ICT and deregulated their telecomssectors creating a favorable environment for moving into the knowledge economy (KE)

ICT is a key enabler of the KE, and ICT applications can facilitate delivery of economic, social, government services to citizens (e-learning, e-health, e-government, e-money…)

PICs can take advantage of the twin forces of globalization and technological advances to use knowledge better for economic and social development and overcome constraints imposed by distance

But the KE is not just about ICT or high-tech industries -- rather than create an effective KE in the medium to long run, countries should develop an educated and skilled population, an efficient innovation system, a dynamic ICT sector, buttressed by an enabling economic and institutional environment (look at Finland, Ireland, Korea, Singapore…)

Fostering innovation and entrepreneurship critical to developing new opportunities (Fiji water, Noni juice, Pure Fiji beauty products….)

3. Host to the World

3. Host to the World

Tourism sector has performed below expectations in

most Pacific Island countries

Air access/cost major constraint for development of

tourism sector

Scope for diversifying source markets and tourism

offers

Tourists from China increasingly creating new

opportunities and challenges

Beyond tourism – retirement domiciles, conferences,

safe haven locations, diaspora

4. Labor Mobility

4. Labor Mobility

Important element of Pacific livelihood strategies

Countries facing different opportunities and challenges(Compact countries, Samoa and Tonga with well established diasporas, and countries with very limited access to labor mobility opportunities)

Particular focus on atoll nations where climate change and sea level rise could reduce the carrying capacity of affected islands

Strong evidence on triple wins from labor mobility – but also political sensitivities, social issues, and concerns about brain drain

Diasporas can create new opportunities beyond remittances and become important drivers of development

5. Managing increasing Stress on

Pacific Livelihoods

5. Managing increasing Stress on

Pacific Livelihoods

Natural disasters, climate change and rising sea

levels

Non-communicable diseases

Changes to the social fabric of Pacific societies

Pacific Possible would seek to quantify the impact

of these threats on GDP

Highlight strategies to mitigate threats

6. Working Together

6. Working Together

Working together is key to overcoming limitations arising from the small population size of PICs

Working together with multiple partners – other PICs, developed and large economies in the region – Australia, New Zealand, US, China, Japan

Democratic change in Fiji, economic strengthening of PNG, and emergence of non-traditional development partners such as Korea, Malaysia, India create new opportunities

Pacific Possible will seek to quantify potential gains from working together in concrete ways (e.g., medical procurement)

Pacific Possible will also seek to generate new ideas on opportunities for working together among the various stakeholders in the Pacific

Three (3) Cross-cutting Themes

Poverty & Social Impacts

Environmental Impacts

Gender Impacts

Partnership Arrangements

Advisory Committee

Finance Ministers from the Pacific;

Senior Representatives from Australia, China, Japan, Korea,

New Zealand and USA

Reference Group

Senior civil servants from Pacific and development partners;

Private sector representatives (chambers of commerce);

NGOs

Research Partners

Pacific Island Forum Crop Agencies, Secretariat of the

Pacific Community (SPC), universities

Seeking Inputs on:

Are we looking at the right issues?

How can we make sure we add value?

What are appropriate partnership arrangements?

How can we coordinate with and support related

work in the region?