Donors asked to help PICs hit by crisis

GOVERNMENTS, donors and non-governmental organisations (NGO) should consider developing systems and methods to closely monitor impacts of economic and other shocks on Pacific Island countries.
And international donors should assist by providing Pacific country governments with budget support to protect social expenditure, Oxfam International said following its study on 13 Pacific Island countries (PIC) including Papua New Guinea affected by the global economic crisis (GEC).
The recommendations were among those included in the 28-page report, The Impact of the Global Economic Crisis on the Pacific region, released yesterday.
It forecast PNG’s growth this year at 3.9% behind Timor-Leste’s 9% and ahead of Vanuatu at 3.5%.
Last year’s forecast was: PNG 4.5%, pre-crisis forecast at 4.6%, and adjustment post crisis – 0.1; Timor-Leste 8%, 4.9%, and 3.1%; and Vanuatu at 4%, 4.3% and – 0.3%,
PNG, Timor-Leste and Vanuatu were least affected by GEC but it was PNG and Timor-Leste that were well-positioned to undertake fiscal expansion because the others would need additional grants from international community to protect essential expenditure, it stated.
The study was on GEC impacts on PICs as part of an Oxfam research project analysing impacts and responses to it across the countries.
It was authored by Dr Simon Feeny, an associate professor with School of Economics, Finance and Marketing at Royal Melbourne Institute of Technology (RMIT) University in Australia.
This was following a study on 14 countries that included PNG, Fiji, Solomon Islands, Kiribati, Marshall Islands, Nauru, Palau, Federated States of Micronesia, Samoa, Cook Islands, Tonga, Timor- Leste, Vanuatu and Tuvalu.
The key GEC aftermath that affected all the countries was “declining trade and loss of government revenue”.
The other GEC effects were declines in remittances, tourism, foreign aid, and trust fund revenues, which collectively impacted 10 countries except PNG, Timor-Leste, and Vanuatu.
The report said the GEC raised questions about what form of future economic development best served PICs.
It further said economic development was effective when it reflected peoples’ needs, so donors such as Australia should support PIC governments to engage their populations to consider future economic development.
It also called on policy makers to examine the “traditional economy”, being part of the traditional social support systems.
The report said access to land for subsistence farming could support and strengthen resilience against crisis.