Island home

Development in Pacific island countries depends on greater labour mobility, more private investment, arms-length government and integration, according to international development economist Dr Satish Chand.

When Dr Satish Chand speaks about his research for a more stable Pacific, you realise he is drawing on two perspectives: his experience as an international development economist, and someone with a deep personal connection to the region.

He understands that many Australians form their perception of the Pacific Islands from what they see in the news: civil unrest in the Solomon Islands, mismanagement and corruption in Nauru, fresh water crises on small atolls, and gang crime in Papua New Guinea. These are negative attitudes he wants to change.

When asked about security issues in PNG, Chand responds, “Have you been to PNG? It is beautiful. It is really stunning. You really should go.” He opens photographs on his computer of his latest trip to Australia’s former colony. These snaps are enough to tempt any paradise holiday hunter: a bungalow on stilts overlooking crystal blue waters; ripe, red coffee beans heaped on wooden platters; and children in traditional tribal dress staring into the lens.

Forget the strife-torn country so often depicted in the news – this could be the holiday destination featured in glossy magazines.

Chand acknowledges there are many challenges – social, economic and political – facing the Pacific. At the centre of these are basic human security, Chand says, which is the “modern spin” given to Australia’s recent practical interventions.

“It is well known that you need to maintain law and order as a backstop to slippage into conflict, which leads to poverty,” he says. “Security of an individual’s property and their person is essential for the development of any nation.

“Frequent breakdowns in law and order are not only a deterrent to foreign investment, they also dissuade the locals from investing. These investments are critical for growth of the economy. Long-term peace can only be built on prosperity and we have done poorly on the latter.

“If, somehow, law and order could be underwritten within the individual Pacific island states, you could attract the quantum of investments for growth in income. The collective pay-offs for the region could be large, particularly in the heightened post-9/11 world.

“But unfortunately, what we are seeing is significant, and often growing, poverty in the islands. Subsistence affluence, a term coined here at ANU, is increasingly a distant memory to many,” he says.

Chand uses the example of PNG, which is larger than New Zealand in terms of population, land area and its exclusive economic zone; unlike New Zealand, PNG has a lot of unskilled labour.

According to the World Bank, in 1996 some 38 per cent of the PNG population lived below the poverty line, he says.

“At a National Press Club address in March, PNG Treasurer Bart Philemon gave some sobering statistics on his country’s development, including that 70 per cent of the rural communities in his country do not have access to safe drinking water, some 7,300 babies die each year before reaching their first birthday, and 3,700 mothers die each year from complications at childbirth.”

And according to the Asian Development Bank, more than half of the Kiribati population lives in poverty.

“These are frightening statistics, with many heading in the wrong direction,” Chand says.

The interactions between social welfare, health and education systems are making development in the region all the more complex. For example, the effect of a growing population infected with HIV/AIDS is eroding traditional social support structures, particularly in PNG.

Estimates that infection rates have surpassed the one per cent level are commonly reported, but there is a consensus that HIV/AIDS has reached a ‘take-off’ stage and is thus likely to reach epidemic proportions in a matter of years.

“Those unfortunate enough to be already infected pay a hefty price, both in terms of the health consequences and the stigmatisation that follows,” Chand says.

“Many families and their dependants have been ostracised from their extended-family support networks on the knowledge of a member being HIV-positive. Under-reporting, not surprisingly, is a serious concern.

“The reach of education and health facilities is poor in PNG, so you have the conditions for a rapid expansion in infection rates of the HIV virus, and this is what we have seen,” Chand says.

He recalls a recent trip to PNG in 2003 where he struck up a conversation with a young mother whose husband had died of AIDS. She was also infected.

“She was obviously worried about herself, but even more so for her nine-year-old daughter. Who would look after her once she passed away, she kept asking. I asked, in some puzzlement, ‘Won’t the clan take care of the child?’

“When a child is orphaned, the norm in Pacific villages, at least when I was growing up, was for the clan to ‘adopt’ the child and to provide for their basic needs. Like the other kids in the extended family, orphans went to school, got fed, and did the usual chores.

“This mother responded, with much sadness, in the negative. The stigmatisation of AIDS is so serious that clans kick people out if any of their immediate relatives have died of the disease.

“This is in part driven by the fear of the disease and partly by the fact that it reflects poorly on the wider clan. This mother was naturally concerned for her child, who would grow up without any family, probably on the street, once she passed away.

“For me, this remains one of the saddest stories from an otherwise extremely caring society.

“This is an example of how the social welfare system – developed over centuries and one that has served well historically – has been destroyed by AIDS. The misinformation on this epidemic is only part of the reason for this. This is not the Pacific I knew,” Chand says.

According to Chand, there are strategies that would assist development and security in the Pacific, based on the notion of regionalism.

Chand has strongly advocated labour mobility, or facilitating a freer flow of workers, in the Pacific, helping the flow of money around the region. The issue of labour mobility is currently being examined as part of the Australian Parliament’s Inquiry into Pacific Region seasonal contract labour.

“And in my view, this should not only be about a freer flow of workers from the Pacific to Australia, but from Australia to the Pacific as well,” Chand says. “The unskilled workers in the Pacific do want to come to Australia and work here, and for Australia there are many under-utilised resources in the Pacific that could be brought into productive use.

“An unemployed Pacific Islander, following a four-hour flight into Sydney, does double shifts of hard labour, then goes home to cook, clean, wash and prepare for the next day. What has changed in the four hours? Not much, except that there is less social support for them to rely on and better remuneration for their labour. Labour mobility is very important, and it is critical to getting the cash and investments into the Pacific.”

Pacific Islanders working in other countries are important for another reason: remittance, or money sent home by workers earning a wage in another country.

“In Fiji, remittance is one of the biggest sources of foreign exchange earnings; it ranks second to tourism,” Chand says.

According to Chand, two of the biggest factors working against development are isolation from the major markets and the small size of the Pacific islands. The size of the islands acts as an impediment to the growth of industries that could otherwise absorb the region’s large pool of unskilled workers.

Industries in the Pacific have been sheltered by the “natural protection” afforded through isolation, but then they operate well below the norms of international best practice, he says.

“While one could argue that jobs could be created at home instead of exporting the workers out, this is not an option for many and definitely not for the short term.

“I cannot see too many investors willing to invest in a garment factory on Nauru, for example. There are strong advantages of agglomeration: the movement of workers into the metropolitan cities in Australia from the outback is witness to this fact.

“While a worker has the option of moving out of Bowral into Sydney for work, this is not an option for someone in Tarawa, Kiribati.

Although the Pacific Islands are isolated and small, they are blessed with a lot of sun, sea, and surf and according to Chand, their people are extremely friendly, helpful, and hospitable.

“There remains huge potential for tourism growth. PNG, a nation blessed with breath-taking natural beauty, historic World War II relics including the Kokoda Trail and the Japanese bunkers in Rabaul, attracts fewer than 60,000 tourists annually.

“PNG and crime often get mentioned in the same breath, but people seldom realise that much of the reported crime in relation to tourists is committed within the two major urban centres of the country.

“Those of us fortunate enough to have wandered out into the countryside are amazed by the hospitableness of the people and the natural beauty of the country.”

But again, there are barriers to tourism. Getting to PNG is expensive, despite the fact it is a 90-minute jet ride from Cairns. Telephone costs are not only high but have been rising rapidly over the past year.

These factors put the citizens of PNG at a particular disadvantage.

“The high costs of transportation and communication have forced a significant proportion of the community into subsistence production and away from modern commerce.”

A stronger collaborative justice structure in the region is another potential prospect which could be developed under regionalism.

“It is often hard to enforce arms-length governance in the smallest of the communities. Think of Nauru, a country of 10,000 individuals all living on a 21 square kilometre single island.

“Nearly everyone knows each other, they could even be distantly related. It would be very hard for a judge, a policeman, and a public prosecutor on Nauru to put all their effort into having a close relative face the full force of the law for a misdemeanour.

“How would those responsible for sending their relative to jail face up to their kin in a social gathering? Australian civil servants outposted to the Pacific Islands have often been a lot more effective in delivering impartial governance, at least partly because they are not burdened with this conflict of interest.”

The political and civil unrest which hits the headlines of Australian newspapers is a symptom of ineffective governance, which may benefit from a more collaborative Pacific approach, Chand says.

“How do we get around the now repeated incidences of coups, riots, and related events that have plagued the region over the recent past? Unlike the initial media reports, we are now learning that these were not spontaneous reactions of a disenchanted crowd.

“Media reports are suggesting that the April 2006 riots in Honiara were orchestrated by some disgruntled leaders; similar allegations are being heard on the June riots in Dili.

“Given their size and limitations on providing arms-length governance, the island nations could collectively pool their efforts in ensuring that no single nation is put at risk of facing anarchy due to the actions of a small, albeit powerful, minority. 

“Sovereignty would still need to be protected; each nation has the rights to legislate laws of its own.

“All I suggest is that the region, as a collective entity, underwrites the laws that have been legislated by the individual parliaments of the member states.

“If a parliament enacts laws, as an example, that permit its police or military to hold a government to ransom, then the region should respect this.

“But I am not sure that many parliaments would enact such legislation. Furthermore, there are good reasons for the region to be concerned about breakdowns in law and order in the member states.

“Conflicts, now more than ever before, spill across national borders. The first coup of 1987 in Fiji disrupted trade to the neighbouring nations that used Fiji as a hub.

“A credible promise to restore law and order should it fail in a member state could be enough of a deterrence against such socially disruptive action.”

The move toward regionalism could also see smaller countries form integrated markets to “reap the benefits of scale in a global world”.

This concept has precedents, Chand says, with a regional airline and a regional university already established.

“The Pacific island countries, as a group, face cost disadvantages due to their small local markets and isolation from the major markets … Falling transportation and communication costs present the opportunity to the Pacific island countries to integrate their markets in order to tap the gains from a larger and more deeply integrated market,” Chand writes in a recent book he edited, Pacific Islands Regional Integration and Governance.

He says the economies of even some of the smallest Pacific islands have much to rely on in terms of natural and human resources to achieve this regional partnership.

“Most of the Pacific island countries have the inputs for development. Somehow, they have failed to translate these into superior developmental outcomes.

“We continue to have the poorest indicators of social development within the Asia-Pacific region.

“But for many of the island communities, the issue is not that we lack the natural resources, but more with how we use these to improve on our wellbeing. We are learning from the mistakes of the past, but maybe there is a case for faster learning!”

His belief in the potential for Pacific island countries to establish a path for development is clear, and is particularly telling from his final remarks on the resources of the region.

“Despite all of the problems of the Pacific Islands, I feel privileged to be working in and on a region that I belong to and a people whom I greatly love and admire. These islands have some of the most beautiful scenery you will ever see, along with extremely hospitable people. You really should go visit for yourself.”



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ANU Reporter
Winter 2006