Reskilling, labour migration vital to the Pacific’s recovery

A new World Bank study examines the pandemic’s impacts on Pacific labour markets while underscoring regional opportunities and policy responses.

While the Pacific and Papua New Guinea have avoided some of the worst health impacts of the Covid-19 pandemic, the closure of international travel and lockdowns to curb the spread of the Covid-19 have had serious impacts on employment, international labour mobility and livelihoods across the region.
A new World Bank report , Pacific Island countries in the era of Covid-19: Macroeconomic impacts and job prospects detailed the potential extent of job losses and labour market impacts in the region, while suggesting how the Pacific might benefit from changing employment trends and other opportunities.
Fewer local jobs and sluggishness in new international opportunities are all taking their toll on labour markets in the seven Pacific countries examined in the report (Fiji, Kiribati, PNG, Samoa, the Solomon Islands, Tonga and Vanuatu).
Of these, countries that are more reliant on international tourism such as Fiji, Vanuatu and Samoa have borne the brunt of these effects, with tourism-related employment dropping by an estimated 64 per cent in Vanuatu and unemployment claims last June nearly tripling the 2019 total in Fiji.
Employment figures in countries where tourism plays a smaller role are sobering, with job advertisements in PNG dropping by 76 per cent between last February and May as a result of lockdowns and travel restrictions.
Flow-on effects to other industries, including retail and food services, together with reductions in commodity prices and remittance inflows, have added to this significant economic hardship across the region.
“The changes that we have seen in labour markets and employment across the Pacific are profound and are hitting the most vulnerable hardest – but importantly they are also leading families who would have been previously secure into vulnerable positions, especially workers in the tourism sector,” said Yasser El-Gammal, practice manager, social protection and jobs at the World Bank.
The report also highlighted opportunities to mitigate the economic and employment shocks presented by the pandemic.

These included prioritising retraining and skill development of workers in affected industries, such as tourism, so they could move into sectors that required similar skill sets; promoting digital literacy skills to help Pacific islanders participate in remote working opportunities; and, exploring new employment opportunities for low- and semi-skilled Pacific workers in Australia and New Zealand in the long term.
“Ultimately, workers from the Pacific will remain in demand in Australia, New Zealand and elsewhere for a long time to come,” said report author Matthew Dornan, senior economist at the World Bank.
“The various Pacific labour mobility schemes that are focused on employment in rural and regional areas are not only crucial to livelihoods and employment in the Pacific, but beneficial for employers and businesses in Australia and New Zealand.”
Of particular focus in the report was the need to support skills development and employment services in response to the crisis and as part of the economic recovery.
This could include subsidising the reskilling of workers, support for work-study and apprenticeship schemes, the provision of temporary wage subsidies for the unemployed and an expansion of international labour mobility opportunities for Pacific Islanders.
The latter could be facilitated by efforts to improve the employability of Pacific workers (for example, through upskilling), reducing the costs associated with cross-border labour migration and by improved marketing and relationship management with international employers.
Recipient countries could also play a role through labour policies.
“Labour mobility requires close cooperation between countries,” said co-author Soonhwa Yi, senior economist at the World Bank.
“While policy improvements from Pacific governments could help expand the overseas employment opportunities available to Pacific Islanders, receiving countries also need to ensure their migration and working visa policies support future demand for increased labour mobility.” The report stressed that moderating the employment and livelihoods impacts of the Covid-19 across the region required supportive policy responses from governments.
While support to affected populations was a priority, governments could also consider support to businesses, as has been provided in Tonga and PNG; safeguarding cash-flow through tax and import duty relief, as has been undertaken in PNG, Samoa and the Solomon Islands; and, exploring opportunities for direct cash transfers and social assistance to vulnerable populations.
“The Covid-19 pandemic crisis also highlights the urgency for Pacific countries to expand IT-related infrastructure and increase their engagement in the digital economy,” said Yi.
“This would provide opportunities for workers in the digital economy and better position Pacific countries to export digital services across borders.”

The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response.