Keynote address by SG Tuiloma Neroni Slade at Pacific Investment Summit, Sydney


12-13 August 2010
Dockside Conference Centre, Darling Harbour, Sydney



Tuiloma Neroni Slade
Secretary General
Pacific Islands Forum Secretariat




Deputy Prime Minister of Samoa, Honourable Misa Telefoni Retzlaff
Minister for Economic Development of Timor Leste, Honourable Joao Mendes Gonclaves
Distinguished Representatives of Industries, the Financial and Private Sectors
Officials from the region
Ladies and Gentlemen

On behalf of the Pacific Islands Forum Secretariat, I welcome delegates to this first Pacific Islands Investment Summit. This is an entirely new opportunity, one neglected for too long, for investors to interact with policy makers from the region to review the state of investment and private sector development in the islands, to establish opportunities for match-making and to explore openings for increasing foreign investment flows to the Pacific Island Countries.

2. It is the first such event to focus purely on investment opportunities in Pacific island countries. As such, the gathering provides a timely context for enhancing understanding of the investment environment and of how investors can take advantage of the new commercial avenues which are available and being generated by developments in the Pacific. For despite many disadvantages, this is a region of promise, with investment opportunities available in tourism, agriculture, fisheries, manufacturing, general services, transport and construction; indeed, with what is expected of the LNG and mineral projects in PNG, the potential of resources in other island States, including in the seabed and maritime areas, the Pacific is a region of infinitive promise.

3. The Summit is being held at a critical time for economies of the Pacific region. The global economic and financial crisis has affected all economies and one of the impacts has been on investor confidence. We hope there has been no undue erosion of that confidence. The past two years have been particularly challenging for countries seeking to attract investment. But with the crisis, lessons have been learnt and many countries have been able to undertake essential reforms to create better business-enabling environments, to make them conducive, and more attractive to foreign investors. This can only lead to new openings waiting for those who are prepared to think creatively, strategically and for the long-term.

4. Many of you will be aware that Pacific Leaders have just concluded the 41st Pacific Islands Forum meeting in Port Vila, Vanuatu. The theme for the meeting was “Navigating our challenges and opportunities together towards addressing the needs of the most vulnerable of our communities”. This theme speaks directly to today’s Summit, for broad-based, private sector-led growth is essential to achieving faster development progress, and so that we can respond to the needs of the most vulnerable. Investment is absolutely necessary for economic growth, private sector development and wealth creation. As Caleb Jarvis has mentioned, we need to lift the performance of the Pacific Islands in the achievement of the MDGs. But in the Pacific, as I am sure you all know, investment has always been bedeviled by regulatory and legal impediments, costly access to finance, insecurity of land tenure, regulated capital and the dual tyrannies of diseconomies of scale and distance from markets. All these factors increase the cost of doing business for aspiring investors, and for all those living and trading in the Pacific.

5. The global economic crisis also underscored the need to strengthen the region’s resilience to external shocks, and particularly the need to ensure that strong financial management systems are in place. Governments, as perhaps to be expected, took action to tighten monetary policies and to apply new financial regulations. Banks in turn assumed a more risk averse approach, in part by being selective with their lending and raising their interest rate spreads. To ensure reasonable recovery prospects of the Pacific Island economies, we need to allow for more effective ways to finance productive investments. The choice of monetary policy may perhaps take account of signals for expansionary interventions to promote investment through credit relaxations. For such policy to be meaningful and sustainable would require risk-mitigating interventions for the banks through collateral and interest-support schemes.

6. In the Pacific, small and medium enterprises make up much of the private sector. These enterprises face difficulty accessing finance to support their establishment and growth. As related by the private sector in their dialogue with Forum Leaders last week in Port Vila, less than 20% of adults in the Pacific have access to financial services, and fewer still have access to credit. Investment capital is scarce or regulated in the region and therefore entrepreneurs, both domestic and foreign, cannot make the most of the many opportunities present in tourism, resources, services and manufacturing.

7. This makes foreign investment all the more vital for exploiting the opportunities which are present in the region and which help to create a vibrant and growing business community. At the Private Sector Dialogue with the Leaders’ Plenary in Port Vila, as I have said, business representatives from Forum Member countries drew attention to the difficulty faced by businesses in the region when attempting to raise capital for investment. This puts the spotlight on the mutuality of responsibilities: on the part of Governments to create the enabling environment; and for the private sector investors to respond to the opportunities.

8. There is, in the scheme of regional development, the clear acknowledgment of the role the private sector plays. Foreign investments and the capital they introduce are, of course, major contributors for all countries, as are the jobs created, and the skills and knowledge transferred to workers. Many distinguished people will share insights on this matter. Foreign investment builds the comparative advantage of Pacific countries which allow them to utilize the economic potential of their resources, and to develop the skills of island communities so that their own entrepreneurs can grow and flourish. The partnership with the foreign direct investors is, simply, fundamental; and I cannot over-emphasise the desirability and long-term value of these partnerships.

9. Foreign investment is also needed for export production. The meaningful participation of Pacific Island economies in international and regional trade depends on their capacity to produce exports. Except for a few countries, export production requires substantial development and is one area that calls for the focus of discussions in the next two days, and around which foreign investment could be targeted. I hope investors present here will use the opportunity to explore with representatives from the Pacific Islands how they could potentially invest in export production in their respective countries. Remember, we are talking of a sizeable market of currently close to 10 million and, furthermore, that the region is already working towards a single Pacific economy through intensified regional integration under the Pacific Plan

10. For those of you who are new to the region, in the coming days you will hear about how others have successfully invested in the Pacific island countries in a range of industries, from traditional sectors such as retail, fisheries and tourism, to new industries providing green energy. All share a vision of growth and prosperity for the Pacific, and many, in the ups and downs of commerce, will have addressed the challenges of doing business in Pacific island countries. I note from the programme the presence of long-time investors and senior business personalities of the region who possess vast experience and insights. Their commitment and enthusiasm for the Pacific is evident from their presence here at the Summit and in their continuing operations in the Pacific even under sometimes rather difficult circumstances. Their contribution to the development of Pacific economies is acknowledged and hopefully their successes can inspire other investors to consider investing in the Pacific.

11. This is the first meeting of its kind. It may be that we need to traverse more before we get to the Summit. But there is no reason why we cannot meet again. Annually. Perhaps in Auckland next year where we have a sister Forum Pacific Trade and Invest office and where we have a fire-ball Commissioner, Adam Dennis. Meanwhile, I want very warmly to congratulate Caleb Jarvis and the Forum Secretariat’s Pacific Trade & Invest office in Sydney for hosting this event and, similarly, to thank Andrew Wilkins and Business Advantage International for their outstanding partnership and support without which this Summit could not be possible. I would also like to acknowledge and thank key sponsors Westpac Banking Corporation and Guam’s Sherman Consulting, whose financial support has helped make this gathering a reality, and, I am sure, a total success.

Thank you very much for listening.

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