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Rural Development & Agriculture in Pacific Islands

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Source: World Development Indicators 2006  

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Not if but whenNot if But When: Adapting to Nat. Hazards in the Pacific Islands Region

   
 

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Overview

The Pacific Islands is the region of the world, together with Sub-Saharan Africa, less likely to reach the Millennium Development Goals. The lack of economic growth in the face of growing populations (nearly 40 percent of the population is below the age of 15) has contributed to rising unemployment and “hardship” (a term preferred to poverty in the Pacific Island countries. 

Shore Even those countries that have seen positive growth in per capita income have been unable to fully translate it into adequate job creation and poverty reduction.

While Samoa and Fiji have been the better performers, they still lag behind regional and income level comparators. In the case of the Solomon Islands and Vanuatu, living standards have fallen significantly over the past decade.

The nine Pacific Island member countries of the World Bank (Palau, Federated States of Micronesia, Marshall Islands, Kiribati, Solomon Islands, Vanuatu, Tonga, Samoa, and Fiji) occupy a total area of 88,800 square kilometers with a population of 2.1 million spread over a vast sea area of 30.6 million square kilometers. 

These countries share tremendous challenges as small, isolated island economies: remoteness, resulting in high transportation costs and distance from main markets; limited institutional capacity and higher cost of provision of public goods per capita; lack of diversification of the economy, due to a narrow resource base, small domestic markets and low private sector capacity; and openness, leaving the economy vulnerable to external economic and environmental shocks.

Smiling FacesThe World Bank’s engagement in the Pacific Islands has been guided by its Regional Pacific Engagement Framework for 2006-2009. The aim of the Regional Pacific Engagement Framework is to help addressing the issues of rising hardship and youth unemployment by creating an environment conducive to generating economic growth and employment opportunities for Pacific Islanders, working in cooperation with other development partners in the region.

The Pacific Engagement Framework identifies two major strategic priorities at regional level as regards rural development and natural resources management: (i) safeguarding service delivery by improving resilience to natural hazards; and, (ii) enhancing sustainable revenues from resource-based sectors.  Although not specifically identified at regional level, agricultural and rural development forms the third possible cluster of activities in the Pacific, especially in agrarian societies in Melanesia (Solomon Islands and Vanuatu, both IDA countries) and Fiji (IBRD).

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Progress

FlowerBecause there are wide disparities among Pacific Island countries, it is useful to categorize them into broad groups based on resource endowments, size, and the importance of agriculture:

  1. Relatively large countries of Melanesia (Fiji, Solomon Islands, Vanuatu). These countries have the best natural resources (over 90 percent of the land) and most of the population (around 85 percent). The countries of western Melanesia (Solomon Islands and Vanuatu) are agrarian societies in which agriculture provides the overwhelming main source of employment and livelihoods. Despite rich resource endowments these two Melanesian countries have a low ranking in terms of human development indicators.  Melanesian countries, excepting Fiji, have extremely high population growth rates. All, including Fiji, are experiencing moderate to high rates of urbanisation.

    The Fijian economy is more diversified, with a higher percentage of the population living in urban areas. Yet sugar remains the largest net foreign exchange earner and the biggest employer of labour. The Fiji sugar industry is now in crisis with the loss of preferential access to the EU and the non-renewal of many land leases to tenant farmers. This will place huge pressure on the Fijian economy and non-rural livelihoods. Fiji has much higher per capita incomes, life expectancy, and literacy levels than the countries of western Melanesia. Fiji’s strategic location gives overwhelming advantages in terms of diversifying agricultural exports. 
     
  2. IslandMiddle sized countries of Polynesia (Tonga and Samoa). These countries have more modest land resources. Tonga has enjoyed agricultural led growth with the development of vanilla and squash. For Samoa, taro was the lead export product until the industry was decimated by disease. Samoa continues to enjoy a high level of domestic food security. These economies benefit from low population growth and high levels of remittances from their overseas communities. In recent years Samoa has the best performing economy in the region in terms of growth.
     
  3. Land resource poor, micro, predominately atoll states (Kiribati, Federated States of Micronesia, Marshall Islands, and Palau). These are amongst the tiniest nations on earth, spread over vast areas of ocean. They have very limited land resources but vast marine resources at their disposal. Some earn meager, but important, cash income from copra. In terms of human development measures, such as life expectancy and infant mortality, these countries perform better than the countries of western Melanesia, but worse than Fiji and group two countries. They face serious environmental problems relating to sea level rise, coastal erosion, and for some, rapid population growth. All these factors make these tiny states highly vulnerable to natural disasters.

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Key Issues

Adaptation and Natural Hazard Management:  The Pacific Island countries are among the most vulnerable countries in the world to natural disasters and climate change.

SundownThe World Bank has been a key player in supporting adaptation and hazard risk management efforts in the Pacific since 1999-2000, when the Regional Economic Report 2000 “Cities, Seas and Storms ” was released.  This economic report argued that in order to succeed, natural hazard risk management needed to be mainstreamed within national economic planning. 

The Bank has since supported five operations in Samoa, Tonga and Kiribati; a major Catastrophe Insurance Study in Vanuatu; regional processes leading to two High Level Adaptation Consultations in 2002-03; and a Policy Note (Not If, But When: Adapting to Natural Hazards in the Pacific Islands Region) summarizing major lessons learned and recommending the direction forward (FY06).

Natural Resources Management: Most of the Pacific Island economies are heavily reliant on the exploitation of natural resources for government revenues and foreign exchange earning in addition to employment creation. The Bank has been involved in natural resource management assistance since the mid-1990s. Most efforts have primarily been on analytical and advisory activities and largely ad hoc efforts in response to demand from client countries.

Agriculture and Rural Development:   With a few exceptions, most of the population in the Pacific Islands lives in rural areas and depends on the rural economy for their livelihoods.

ShoreCommon issues include access to affordable and quality services and infrastructure in rural areas, maintaining the competitiveness of the agriculture sector and facilitating private sector investment in the rural economy.

The Bank is currently collaborating with the EC and AusAID in preparing an agriculture and rural development strategy in the Solomon Islands. It is envisaged that this would lead to a joint Rural Development Project in FY07. Similar opportunities could emerge in other countries in the region (e.g. Vanuatu and Fiji), where donors are increasingly promoting joint operations with international financial institutions and donor harmonization.

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World Bank Program

Adaptation and Natural Hazard Risk Management: New operations include the Kiribati Adaptation Program II, which is the second phase of a longer-term program aimed at piloting and scaling-up climate change adaptation initiatives. The program is jointly financed by the Bank (GEF funds), AusAID and NZAID.  In addition, the Bank is involved with other donors and regional organizations in the Partnership Network on Disaster Risk Reduction and Disaster Management in the Pacific. The Network (and the Bank) is currently providing assistance to Vanuatu in preparing a National Adaptation Plan. Similar support is envisaged in 2007-2008 for other countries in the Pacific.

SundownNatural Resource Management: In the short- to medium-term, future support in that area is most likely to remain in the form of analytical and advisory activities and continue to respond to ad hoc client demands.

Agriculture and Rural Development:  In addition to the Solomon Islands Agriculture and Rural Development Strategy and Rural Development Program, recently approved, the Bank would be ready to respond to demand of other countries for support in those areas and continue dialogue with countries which have expressed interest in Bank assistance (e.g. Fiji). As in the Solomon Islands where the Bank is working with AusAID and the Europen Commission, the Bank would seek to promote joint work with other donors and moving forward donor harmonization in the sector, while bringing in its experience from other regions of the world.

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Last updated: 2007-09-26




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