- Christopher Browne
- Published Date:
- August 2006
© 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.
Browne, Christopher, 1944—
Pacific Island economies / Christopher Browne — [Washington, D.C. : International Monetary Fund, 2006]
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.
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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.
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.
Director, Asia and Pacific Department
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.
Asian Development BankAML
anti-money laundering and combating the financing of terrorismBCBS
Basel Committee on Banking SupervisionCARICOM
Caribbean Community and Common MarketCCQG
Council on the Cost and Quality of GovernmentCET
common external tariffCFT
combating the financing of terrorismCompact 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 UnionECTEL
Eastern Caribbean Telecommunications AuthorityEEZ
exclusive economic zoneEMU
European Monetary UnionEPA
Economic Partnership Agreement (with the European Union)EU
Financial Action Task Force on Money LaunderingFDI
foreign direct investmentFDIC
Federal Deposit Insurance Corporation (United States)FORSEC
Pacific Islands Forum SecretariatFSM
Federated States of MicronesiaGDP
gross domestic productIDA
International Development Association (World Bank)IMF
International Monetary FundMDGs
Millennium Development GoalsPIC
Pacific island countryPICTA
Pacific Island Countries Trade AgreementThe Plan
Pacific Plan for Strengthening Regional Cooperation and IntegrationPNG
Papua New GuineaPPAC
Pacific Plan Action CommitteeRAMSI
Regional Assistance Mission to the Solomon IslandsRERF
Revenue Equalization Reserve Fund (Kiribati)RMI
Republic of the Marshall IslandsRTFP
Regional Trade Facilitation ProgramSI
value-added tax on goods and servicesVAT
World Trade Organization