15 October 2020
An academics view of resetting Pacific governance in the wake of Covid-19
In an article in today’s edition of the Solomon Times On Line, Binman Chand Prasad had much to say about resetting Pacific governance.
I will quote a shortened version of his commentary.
There have been many proposals made to deal with the fallout of COVID-19 on the Pacific Islands, and for how 'big brothers' Australia and New Zealand could assist in the recovery.
The suggestions include a stimulus package from Australia and New Zealand, an increase in the number of seasonal workers from the Pacific to these countries, and supplies of COVID-19 related medical resources such as testing kits and vaccines when they become available. These are part of renewed calls to strengthen regional cooperation to deal with the socio-economic effects of the pandemic and to minimise its immediate and future impacts.
While these offers are all welcome, what is often ignored in these discussions is the vulnerable state of some Pacific Island economies before the pandemic due to structural weakness, and the challenges placed on development from governance systems lacking in accountability and transparency. There have been serious concerns about Pacific aid effectiveness for decades. Much aid failure and wastage can be put down to poor governance and mismanagement. For instance, despite copious amounts of health aid, the response to COVID-19 has made it clear that the region’s governments don’t trust their health systems at all.
While COVID-19 has become a handy excuse for island governments to blame for their economic problems, it has also exposed the weaknesses in the governance of economic policies and economic performance in Pacific Island states in general.
For example, growth in the Fijian economy had virtually come to a halt well before the COVID-19 pandemic. The expansionary fiscal policy of borrowing and spending over the last five years left no fiscal space for stimulus and relief to address the impact of COVID-19. When the crisis struck, Fiji was left with no choice but to borrow even more heavily. The emergency COVID-19 budget took Fiji’s debt to GDP ratio above an astonishing 80%, and it is likely to rise above 100% by the middle of 2021. As the Fiji media academic and journalist Dr Shailendra Singh remarked in a recent article: “We are living on borrowed funds and on borrowed time. The question is, for how much longer?”
To address the impact of COVID-19, countries in the Pacific will have to rely heavily on our development partners for financing. But this is also a time to revisit – and where necessary, reset – economic governance.
End of quote.
Binman Prasad is a former Professor of Economics and Dean of the Faculty of Business and Economics at the University of the South Pacific. He is an Adjunct Professor at the James Cook University and Punjabi University, and is currently Member of Parliament and Leader of the National Federation Party in Fiji.