Front Matter

Front Matter

Author(s):
Christopher Browne
Published Date:
August 2006
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    © 2006 International Monetary Fund

    Production: IMF, Multimedia Services Division, Creative Services

    Cover design: Massoud Etemadi

    The cover depicts a palm leaf and a map of selected Pacific islands.

    Cataloging-in-Publication Data

    Browne, Christopher, 1944—

    Pacific Island economies / Christopher Browne — [Washington, D.C. : International Monetary Fund, 2006]

    p. cm.

    ISBN 1-58906-516-6

    1. Islands of the Pacific — Economic policy. 2. Islands of the Pacific — Economic conditions. 3. Foreign exchange rates — Islands of the Pacific. 4. Emigrant remittances — Islands of the Pacific. I. International Monetary Fund.

    HC681.B76 2006

    Price: $25.00

    Address orders to:

    International Monetary Fund, Publication Services

    700 19th Street, N.W., Washington, DC 20431, U.S.A.

    Tel.: (202) 623-7430 Telefax: (202) 623-7201

    E-mail: publications@imf.org

    Internet: http://www.imf.org

    CONTENTS

    The following conventions are used in this publication:

    In tables, a blank cell indicates “not applicable,” ellipsis points (…) indicate “not available,” and 0 or 0.0 indicates “zero” or “negligible.” Minor discrepancies between sums of constituent figures and totals are due to rounding.

    An en dash (—) between years or months (for example, 2005-06 or January-June) indicates the years or months covered, including the beginning and ending years or months; a slash or virgule (/) between years or months (for example, 2005/06) indicates a fiscal or financial year, as does the abbreviation FY (for example, FY2006).

    “Billion” means a thousand million; “trillion” means a thousand billion.

    As used in this publication, the term “country” does not in all cases refer to a territorial entity that is a state as understood by international law and practice. As used here, the term also covers some territorial entities that are not states but for which statistical data are maintained on a separate and independent basis.

    Foreword

    The Pacific island region has considerable potential for development, especially in the areas of tourism, fisheries, forestry, mining, and agriculture. With these resources and the continued substantial economic assistance from donors that is expected, it is certainly feasible to lift these countries’ medium-term economic growth record, improve human development indicators, and reduce poverty. Experience since independence demonstrates that the traditional way of life can be preserved, even while the processes of development create modern institutions and help to meet changing aspirations.

    The Pacific island countries face many challenges in developing their economies and raising living standards, including their small size, distance from major markets, and vulnerability to natural disasters. Successfully overcoming these challenges will require the continuation of macroeconomic stability and increased emphasis on the structural reforms to which island governments are committed, including improved public sector efficiency and greater private sector activity. While recognizing that important economic, political, and cultural differences exist between the islands, there are a range of policy recommendations that are widely applicable throughout the region.

    The International Monetary Fund has for many years enjoyed regular, open, and fruitful discussions on economic policy with all the member countries in the region. This dialogue is now being intensified through more frequent staff visits. The islands have made only limited use of IMF resources in the past, but financial support can always be considered when needed.

    The IMF will also continue to play a key role in providing technical assistance to the region, particularly through the Pacific Financial Technical Assistance Center (PFTAC). This institution is located in Suva, Fiji, and serves 15 Pacific island countries: Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Marshall Islands, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tokelau, Tonga, Tuvalu, and Vanuatu. It is funded by the Asian Development Bank, Australia, the IMF, Japan, the Republic of Korea, and New Zealand.

    This book provides an assessment of regional issues that are currently being addressed by economic policymakers. The country-specific chapters, which comprise the second half of the book, provide in each case a broad overview of the main factors affecting the countries’ individual economic performance since independence and the main challenges that lie ahead.

    David Burton

    Director, Asia and Pacific Department

    Acknowledgments

    This volume is a collective effort, authored by economists of the IMF’s Asia and Pacific Department (APD) who have worked on Pacific Island countries. The project was conducted under the general guidance of Christopher Browne, Assistant Director, APD, who authored several chapters and reviewed the remaining chapters. Steven Dunaway, Deputy Director of APD, provided helpful comments. Fritz R. Pierre-Louis from APD finalized the charts and tables. We are particularly grateful to Linda Griffin Kean of the IMF’s External Relations Department, who edited the manuscript and coordinated production of the book.

    The views expressed are those of the authors and do not necessarily reflect those of the IMF, its Executive Board, or its management.

    Abbreviations

    ADB

    Asian Development Bank

    AML

    anti-money laundering

    AML/CFT

    anti-money laundering and combating the financing of terrorism

    BCBS

    Basel Committee on Banking Supervision

    CARICOM

    Caribbean Community and Common Market

    CCQG

    Council on the Cost and Quality of Government

    CET

    common external tariff

    CFT

    combating the financing of terrorism

    Compact I

    original Compact of Free Association with the United States, 1987-2003 (Marshall Islands, Micronesia, and Palau)

    Compact II

    renewed Compact of Free Association with the United States, 2004-23 (Marshall Islands, Micronesia, and Palau)

    ECCU

    Eastern Caribbean Currency Union

    ECTEL

    Eastern Caribbean Telecommunications Authority

    EEZ

    exclusive economic zone

    EMU

    European Monetary Union

    EPA

    Economic Partnership Agreement (with the European Union)

    EU

    European Union

    FATF

    Financial Action Task Force on Money Laundering

    FDI

    foreign direct investment

    FDIC

    Federal Deposit Insurance Corporation (United States)

    FORSEC

    Pacific Islands Forum Secretariat

    FSM

    Federated States of Micronesia

    GDP

    gross domestic product

    IDA

    International Development Association (World Bank)

    IMF

    International Monetary Fund

    MDGs

    Millennium Development Goals

    PIC

    Pacific island country

    PICTA

    Pacific Island Countries Trade Agreement

    The Plan

    Pacific Plan for Strengthening Regional Cooperation and Integration

    PNG

    Papua New Guinea

    PPAC

    Pacific Plan Action Committee

    RAMSI

    Regional Assistance Mission to the Solomon Islands

    RERF

    Revenue Equalization Reserve Fund (Kiribati)

    RMI

    Republic of the Marshall Islands

    RTFP

    Regional Trade Facilitation Program

    SI

    Solomon Islands

    UN

    United Nations

    VAGST

    value-added tax on goods and services

    VAT

    value-added tax

    WTO

    World Trade Organization

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