SG Fiji/NZ Business Council
SG Fiji/NZ Business Council 2June06
1 Jun 2006 22:46:53
PACIFIC ISLANDS FORUM SECRETARIAT
FIJI / NEW ZEALAND BUSINESS COUNCIL CONFERENCE
Suva, Fiji, 2 June, 2006
THE PACIFIC AND THE ECONOMY
Mr Greg Urwin, Secretary General, Pacific Islands Forum Secretariat
Ladies and gentlemen: I would like to thank you for inviting me to participate in today's programme. Fiji and New Zealand are both founder members of the Pacific Islands Forum or the South Pacific Forum as it was originally called. Indeed, the first Forum Leaders meeting took place in Wellington in 1971, with Sir Keith Holyoake in the Chair, and Ratu Sir Kamisese Mara and five other Pacific Leaders attending. The establishment of the Forum in that year was, more than anything, an expression of the newly independent Pacific which was created in the sixties and seventies. The Forum's agenda was nevertheless, a quite practical one which grew out of, in substantial part commercial concerns. Indeed, the direct ancestor of the Forum is generally held to be an Association of Pacific Banana Producing Countries which was at the time seeking better access to the New Zealand market.
2. Over the years, the Forum's agenda has expanded, and now covers a range of political, economic, commercial, security governance and social issues, and one or two others which creep in from time to time. I think its fair to say that along with the other regional organisations which have grown up with us (SPC, SOPAC, SPREP, FFA, USP and others ) the Forum and its Secretariat has been useful to the region, and sometimes a good deal more than that.
3.3. We have reached a point, however, where our Leaders, faced with an array of challenges some domestic, some regional, many encapsulated in the word globalisation , are looking for a deeper measure of regional cooperation, one which might, in an as yet undetermined way, take us into a fuller regional integration than we now enjoy. To that end they called, two years ago, for the development of what has become known as the Pacific Plan, and I guess that is more or less why I've been asked to participate today.
4. As I say, Leaders called for the development of this Plan to create stronger and deeper links between the sovereign countries of the region and identify the sectors where the region could gain the most from sharing resources of governance and aligning policies. Its development during 2004 and 2005 was carried forward by a Task Force comprising senior official representatives from all Forum countries and representatives from regional organisations, with a Core Group of Leaders providing leadership oversight. Development of the Plan was underpinned by an extensive 12-month consultative process, which included quite broad-based consultations at national level; and input also from regional NSAs and other civil society and private sector organisations, Pacific non-sovereign territories, and development partners. To create awareness of the benefits of regionalism and the Pacific Plan, the Forum Secretariat held seminars at national and regional levels on the broader issues of strengthening regional cooperation, integration and the provision of public goods. That whole consultation process will need to be further developed (there is a predictable but certainly justifiable range of views about its quality thus far) if the Plan is really to become a sustainable integration mechanism. New Zealand has been a key proponent of the Plan from the outset. The Plan was adopted by Leaders at their Annual Meeting in Port Moresby in October.
5. The analytical work done in support of the development of the Plan considered several different concepts of regionalism and concluded that, in broad terms, there were two key areas which might be expected to provide the highest gains in the Pacific, that is: (i) the regional provision of goods and services to compensate for and overcome capacity limitations at a national level; and (ii) increasing development opportunities through integration and the creation of larger markets.
6. The Plan, with its range of priority initiatives under the four inter-related goals of economic growth, sustainable development, good governance and security, is now in its initial implementation phase, in other words, the hard part. Its activities are now being progressed, by a partnership of the regional agencies and institutions, other partners and of course, the Forum members themselves with coordination by the Forum Secretariat, and with political oversight and guidance provided by a Pacific Plan Action Committee (PPAC), chaired by the Forum Chair - this year, Papua New Guinea.
7. I am sure we could all agree that economic growth is not the only variable which will determine the success, or otherwise, of the Pacific region. But it is, I think also axiomatic that no country anywhere has prospered without sustained growth. And, even given the unique challenges facing our diverse region, - and that diversity can't be forgotten when you are discussing a subject like regional integration - sound economic management to put this no higher - helps countries improve their lot. In saying this, we need also to recognise that inherent vulnerabilities and lack of access to resources inevitably place real limitations on the prospects of some, especially if they seek to go it alone which, overall, has been the tendency so far. I think we might also (perhaps not all of us) agree that the small states of the Pacific will perform better if they are better integrated with the global economy. The region can, however modestly, compete in global markets and generally make its way in the wider world and there are enough success stories to suggest some of the possibilities ,and suggest also the need for a greater measure of integration in the region itself. Realistically, integration and growth will have to go hand-in-hand in the Pacific. If there is to be any real prospect of that growth being sustained, it doesn't seem possible to have one without the other.
8. The economic growth objectives of the Plan are cast very much in terms of sustainable pro-poor growth. This is not because we want to take the emphasis away from macroeconomic policy , that would be unwise , but to emphasise that exclusively focused on macroeconomic stability can, on the evidence, restrict the ability of developing countries to pursue key aspects of social policy. Addressing the direct needs of poor people is key to reducing poverty, which, in turn, is the essential ingredient for a strategy of sustained growth. .
9. Through the maintenance of an investment climate which may specifically benefit the poor (something which may be rather more easy to say than do) given the actual nature of much of the investment in the region.
10. Within this pro-poor context of economic growth, the Pacific Plan is focused on increasing sustainable trade (including services), and investment; improving efficiency and effectiveness of infrastructure development and associated service delivery; and increasing the private sector's participation in, and contribution to, development. Needless to say, All of these goals have to be pursued in an atmosphere of realism. But that said, our view is that regional integration can improve access for Pacific businesses to consumers, hopefully increasing economies of scale, reducing prices and making more goods available.
11. The present or planned market integration arrangements in the Pacific include the South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA) which has been in place for a number of years; a free trade agreement among Pacific Island Countries (PICTA), thought by some to be of somewhat limited value, given the amount of actual inter-island country trade, but in our view a very necessary stepping stone; a closer economic relations agreement among all Forum members, the Pacific Agreement for Closer Economic Relations (PACER); and an Eeconomic Ppartnership Aagreement (EPA) between the FICs and the European Union. Other arrangements may well also develop, as other partners strengthen their relationships in the region, and we are seeing increasing evidence of the wish of some of them to do so. Most of these arrangements, up to now, have been about trade in goods. There is now increasing discussion in the region about the extension of their trade in services, an important dimension for a number of island countries where the skills of their people represent one of the most significant trading items.
12. Within the ambit of these integration agreements, and in full knowledge of the complexities involved, Pacific Leaders believe that a carefully constructed policy of providing temporary, as well as a measure of permanent, access to external labour markets will create very substantial economic benefits for the region. For the Pacific, meaningful integration must extend beyond trade in goods to global and regional labour markets. Temporary movement arrangements, for both the skilled and, in properly designed programmes, the unskilled, could help to fill labour market gaps in the region, without leading to 'brain drain' and other imbalances or adverse social impacts in the source countries. Such a policy, combined with significantly increased attention to skills formation as proposed by the Pacific Plan, could play a key role in shaping the long term future of the Pacific, as well as generating substantial short term benefits for, I would suggest, every Forum Member.
13. A development along these lines would surely strengthen regional integration per se, but might also induce the progressive movement towards a comprehensive framework agreement among all Members - or settlement, if you like, one that includes trade in goods and services (including labour), and broader-based economic cooperation, and, perhaps in the end, some other elements as well development assistance, security, governance matters perhaps. There is a good deal of complexity in such a proposal such as this, for the Forum Island Countries not least, and there will need to be a level of comfort on all sides before we proceed, decisively, down such a track. That said, given that successful regionalism requires larger markets to stimulate growth, a partnership of this general kind between the island countries, on the one hand and Australia and New Zealand, Forum members also, and the nearest metropoles, would seem to me to get to the heart of it if Pacific regionalism is to be strengthened. The importance of these two markets for generating the larger economic benefits to be derived from Pacific regionalism seems clear enough, even if there is a great deal of devil in the detail, and because of this, Pacific Island Leaders, will continue to urge Australia and New Zealand to review its approach to the issue of labour mobility. The last Forum Leaders' meeting agreed, in effect, that this would be so.
14. New Zealand, with its large Pacific population has historically, as we know, opened its labour markets to some Pacific countries through its immigration policies. And against a background of increasing labour shortages and the lowest unemployment rate in the OECD, New Zealand Ministers have indicated that the issues involved are now being looked at more closely. It is of interest that the Pacific Cooperation Foundation Conference, at the end of June, will bring together current thinking and seek to identify the labour needs of both New Zealand and Pacific Islands; ways of creating jobs and developing increased employment throughout the region; and the economic pros and cons of growing the Pacific labour market.
15. There are a range of other specific Pacific Plan regional initiatives relevant to our economic growth objectives. These include, not exhaustively:
" Implementing the Forum Principles on Regional Transport Services (FPRTS), and the full establishment of the Pacific Aviation Safety Office (PASO).
" Developing regional bulk purchasing, storage and distribution of petroleum and pharmaceuticals. A long-standing issue this, and a difficult one. But a start can be made on standardising regulatory frameworks and coordinating negotiations with suppliers. The Small Island States have a particular interest here.
" Maximising sustainable returns from fisheries, again a long-standing issue and one which will require greater unity than we have sometimes enjoyed.
" Implementing the regional tourism marketing and investment plan.
" Implementing a regional digital strategy for improving information and communication technology.
" Establishing an accountable and independent macro-economic and micro-economic technical assistance mechanism (to include statistics collection), to strengthen treasury and finance functions and provide economic analysis, a development, in effect, of the good work done over a number of years by the PFTAC facility.
16. Private sector development issues facing the region are specifically being examined at the Heads of Investment and Promotion Agencies meeting and ACP-EU discussions, taking place as I speak in Tonga and Port Moresby, respectively. Private sector development is also a key agenda item for Forum Trade Ministers when they meet at the end of June and for Economic Ministers in early July.
17. The Forum Secretariat helps countries operationalise policy decisions taken at high-level meetings such as these, and our Regional Private Sector Development Strategy addresses the region-wide need for an enabling environment for business development. With the support of the Forum, a number of private sector summits have been held at national level all of this regional work has to be translated into national circumstances if it is to have any value. These have covered, among other matters, PSD/SME policies and regulations, access to finance, incentives, national private sector representation, entrepreneurial education, technical assistance and capacity building for SMEs, niche product and sectoral development as well as for business organisations.
18. Another recent regional initiative, supported by the Forum Secretariat under the Pacific Plan, is the establishment this year of the Pacific Islands Private Sector Organisation (PIPSO) to represent each Forum Island Country's private sector. PIPSO has now been registered with the Fiji authorities and has finalised its first annual work programme and budget. UNDP, CDE/ProInvest and AusAID have already started working with PIPSO on PSD-related activities. Forum Secretariat trade officers also work at the national level to help countries develop public-private sector partnerships, national export strategies, import management and substitution, as well as technical and quality standards to enhance overall competitiveness. The introduction of a national entrepreneurial education curriculum into schools is also being pursued through a pilot project involve, initially, four Pacific countries, including Fiji.
19. The potential benefits from the kinds of trade arrangements and new initiatives envisaged by the Pacific Plan can be large and so are the measures which are being pursued in the Plan, and elsewhere, which have as their aim, the strengthening of governance. In fact, would, I think, argue, that the benefits of addressing issues of governance dwarf, by a considerable order of magnitude, the benefits from any other of the proposed activities. One is never, of course, obliged to take such matters completely at face value, but for PNG, Solomon Islands, and Fiji Islands, we have estimated the potential of these benefits, in a very preliminary way, to be of the order of US$8 billion (discounted over a 10-year period).
20. To move forward with confidence, we will need to continue to build up transparency, accountability, equity and efficiency in the management and use of resources in the region. This is an area in which, I think it would be fair to say, performance has been mixed. Economic growth requires capital and a number of Pacific Island Countries have not been especially successful in attracting significant foreign investment. High transaction costs in the region are an obvious disincentive. But good governance, apart from the savings it generates, can also be a powerful leverage on foreign investment investment is ultimately an act of faith, and quite evidently, without investors being convinced that the governance procedures of a country are of a quality to ensure a future for their efforts, they will go elsewhere, and we have seen them do so.
21. Regional approaches endorsed by the Pacific Plan have the potential to provide at least part of the solution in a number of governance areas, perhaps initially in respect of Audit and Ombudsman's Offices, anti-corruption measures and the strengthening of judiciaries and legislatures. Again, some careful thought is required about exactly what we might do - and how we do it - we are, after all dealing with matters here which touch on the very fundamental responsibilities of a nation state, if it is to be a nation state. Just as clearly, however, the availability of regional mechanisms may serve to lessen internal constraints on effective governance.
22. The Pacific Plan is based on the assumption that regional approaches are best taken, certainly at this stage, only if and when they add value at a country level and when governments decide that the market or national and local governments cannot provide a service well. I make the obvious, but often misunderstood, point that regionalism is not intended to replace national policies and programmes, but to support and complement them. Protecting and enhancing effective national sovereignty is, in fact, a key goal of regionalism. This can seem counter-intuitive, and people and countries do, obviously worry about what might in some circumstances, appear to be a compromise of sovereignty. It seems to me, though, that a more realistic view is that national governments can, in fact, enhance their sovereignty by having regional bodies implement some of their policy decisions (in effect, as service providers). This devolution of service provision to regional mechanisms can allow national governments to focus on critical priorities and the direct needs of their people rather than spending scarce resources on expensive, duplicative services whose overhead costs might be shared with others. It goes without saying that the regionally provided service will need to be good.
23. We need not, I think, be too puzzled by the fact that our success in implementing regional decisions at national level has thusfar been a thing of parts. That fact is in part a consequence of the historical period we have been going through in the Pacific and of the fact that as experience elsewhere shows, sound regional institutions need to be grown, sometimes painfully. It is also a consequence of the diversity I've already referred to; it will be incumbent upon us to keep examining what actually stands a chance of working region-wide; some specific proposals may have better prospects if approached on a sub-regional, sub-group or indeed, individual basis. It is a question of what works. That said, if strengthened regionalism is to make a positive impact on the lives of Pacific people, then we will have to find better means of matching our regional good intentions with national interest and commitment. There are many aspects to that, by no means all of them matters we can influence. Within the context of the Plan, we are approaching this issue in a range of ways. First, and most importantly, I think, we have begun work on building an appropriate regional architecture; in other words to work out the best and most rational configuration of our regional institutions for achieving our regional objectives.
24. The Secretariat is also now putting a lot more effort into capacity building and coordination at the national level. We are, together with other partners, assisting member countries with the formulation of National Sustainable Development Strategies, this in the context of helping countries develop mechanisms to translate Pacific Plan initiatives into their national circumstances. We will be posting Forum officers in our smaller member states to help make better connections between national needs and regional resources. The services of these officers will be available to the other regional organisations. The regional organisations and others are working to establish 'virtual' technical teams to provide more concerted and integrated assistance to member countries. We are developing monitoring and evaluation mechanisms in respect of the Plan's initiatives , we need to know when to keep riding the horse, and when to get off it. All of that work will have to come together in a more coherent way, over the next few months.
25. There is now both considerable enthusiasm for and heightened expectations of the Pacific Plan. But much, over the longer haul, is going to depend on political will, on good organisation and cooperation among partners. The Plan does not, for the broad range of measures, attempt to provide an all-encompassing solution to the many challenges facing Pacific people, it is all still taking coherent form; many things will have to come together over the next few years if we are to get where we want to go. I would suggest, I hope not over-confidently, that the Pacific Plan is, however, here to stay as a mechanism for shaping the region's longer-term future.
1 Jun 2006 22:46:53
PACIFIC ISLANDS FORUM SECRETARIAT
FIJI / NEW ZEALAND BUSINESS COUNCIL CONFERENCE
Suva, Fiji, 2 June, 2006
THE PACIFIC AND THE ECONOMY
Mr Greg Urwin, Secretary General, Pacific Islands Forum Secretariat
Ladies and gentlemen: I would like to thank you for inviting me to participate in today's programme. Fiji and New Zealand are both founder members of the Pacific Islands Forum or the South Pacific Forum as it was originally called. Indeed, the first Forum Leaders meeting took place in Wellington in 1971, with Sir Keith Holyoake in the Chair, and Ratu Sir Kamisese Mara and five other Pacific Leaders attending. The establishment of the Forum in that year was, more than anything, an expression of the newly independent Pacific which was created in the sixties and seventies. The Forum's agenda was nevertheless, a quite practical one which grew out of, in substantial part commercial concerns. Indeed, the direct ancestor of the Forum is generally held to be an Association of Pacific Banana Producing Countries which was at the time seeking better access to the New Zealand market.
2. Over the years, the Forum's agenda has expanded, and now covers a range of political, economic, commercial, security governance and social issues, and one or two others which creep in from time to time. I think its fair to say that along with the other regional organisations which have grown up with us (SPC, SOPAC, SPREP, FFA, USP and others ) the Forum and its Secretariat has been useful to the region, and sometimes a good deal more than that.
3.3. We have reached a point, however, where our Leaders, faced with an array of challenges some domestic, some regional, many encapsulated in the word globalisation , are looking for a deeper measure of regional cooperation, one which might, in an as yet undetermined way, take us into a fuller regional integration than we now enjoy. To that end they called, two years ago, for the development of what has become known as the Pacific Plan, and I guess that is more or less why I've been asked to participate today.
4. As I say, Leaders called for the development of this Plan to create stronger and deeper links between the sovereign countries of the region and identify the sectors where the region could gain the most from sharing resources of governance and aligning policies. Its development during 2004 and 2005 was carried forward by a Task Force comprising senior official representatives from all Forum countries and representatives from regional organisations, with a Core Group of Leaders providing leadership oversight. Development of the Plan was underpinned by an extensive 12-month consultative process, which included quite broad-based consultations at national level; and input also from regional NSAs and other civil society and private sector organisations, Pacific non-sovereign territories, and development partners. To create awareness of the benefits of regionalism and the Pacific Plan, the Forum Secretariat held seminars at national and regional levels on the broader issues of strengthening regional cooperation, integration and the provision of public goods. That whole consultation process will need to be further developed (there is a predictable but certainly justifiable range of views about its quality thus far) if the Plan is really to become a sustainable integration mechanism. New Zealand has been a key proponent of the Plan from the outset. The Plan was adopted by Leaders at their Annual Meeting in Port Moresby in October.
5. The analytical work done in support of the development of the Plan considered several different concepts of regionalism and concluded that, in broad terms, there were two key areas which might be expected to provide the highest gains in the Pacific, that is: (i) the regional provision of goods and services to compensate for and overcome capacity limitations at a national level; and (ii) increasing development opportunities through integration and the creation of larger markets.
6. The Plan, with its range of priority initiatives under the four inter-related goals of economic growth, sustainable development, good governance and security, is now in its initial implementation phase, in other words, the hard part. Its activities are now being progressed, by a partnership of the regional agencies and institutions, other partners and of course, the Forum members themselves with coordination by the Forum Secretariat, and with political oversight and guidance provided by a Pacific Plan Action Committee (PPAC), chaired by the Forum Chair - this year, Papua New Guinea.
7. I am sure we could all agree that economic growth is not the only variable which will determine the success, or otherwise, of the Pacific region. But it is, I think also axiomatic that no country anywhere has prospered without sustained growth. And, even given the unique challenges facing our diverse region, - and that diversity can't be forgotten when you are discussing a subject like regional integration - sound economic management to put this no higher - helps countries improve their lot. In saying this, we need also to recognise that inherent vulnerabilities and lack of access to resources inevitably place real limitations on the prospects of some, especially if they seek to go it alone which, overall, has been the tendency so far. I think we might also (perhaps not all of us) agree that the small states of the Pacific will perform better if they are better integrated with the global economy. The region can, however modestly, compete in global markets and generally make its way in the wider world and there are enough success stories to suggest some of the possibilities ,and suggest also the need for a greater measure of integration in the region itself. Realistically, integration and growth will have to go hand-in-hand in the Pacific. If there is to be any real prospect of that growth being sustained, it doesn't seem possible to have one without the other.
8. The economic growth objectives of the Plan are cast very much in terms of sustainable pro-poor growth. This is not because we want to take the emphasis away from macroeconomic policy , that would be unwise , but to emphasise that exclusively focused on macroeconomic stability can, on the evidence, restrict the ability of developing countries to pursue key aspects of social policy. Addressing the direct needs of poor people is key to reducing poverty, which, in turn, is the essential ingredient for a strategy of sustained growth. .
9. Through the maintenance of an investment climate which may specifically benefit the poor (something which may be rather more easy to say than do) given the actual nature of much of the investment in the region.
10. Within this pro-poor context of economic growth, the Pacific Plan is focused on increasing sustainable trade (including services), and investment; improving efficiency and effectiveness of infrastructure development and associated service delivery; and increasing the private sector's participation in, and contribution to, development. Needless to say, All of these goals have to be pursued in an atmosphere of realism. But that said, our view is that regional integration can improve access for Pacific businesses to consumers, hopefully increasing economies of scale, reducing prices and making more goods available.
11. The present or planned market integration arrangements in the Pacific include the South Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA) which has been in place for a number of years; a free trade agreement among Pacific Island Countries (PICTA), thought by some to be of somewhat limited value, given the amount of actual inter-island country trade, but in our view a very necessary stepping stone; a closer economic relations agreement among all Forum members, the Pacific Agreement for Closer Economic Relations (PACER); and an Eeconomic Ppartnership Aagreement (EPA) between the FICs and the European Union. Other arrangements may well also develop, as other partners strengthen their relationships in the region, and we are seeing increasing evidence of the wish of some of them to do so. Most of these arrangements, up to now, have been about trade in goods. There is now increasing discussion in the region about the extension of their trade in services, an important dimension for a number of island countries where the skills of their people represent one of the most significant trading items.
12. Within the ambit of these integration agreements, and in full knowledge of the complexities involved, Pacific Leaders believe that a carefully constructed policy of providing temporary, as well as a measure of permanent, access to external labour markets will create very substantial economic benefits for the region. For the Pacific, meaningful integration must extend beyond trade in goods to global and regional labour markets. Temporary movement arrangements, for both the skilled and, in properly designed programmes, the unskilled, could help to fill labour market gaps in the region, without leading to 'brain drain' and other imbalances or adverse social impacts in the source countries. Such a policy, combined with significantly increased attention to skills formation as proposed by the Pacific Plan, could play a key role in shaping the long term future of the Pacific, as well as generating substantial short term benefits for, I would suggest, every Forum Member.
13. A development along these lines would surely strengthen regional integration per se, but might also induce the progressive movement towards a comprehensive framework agreement among all Members - or settlement, if you like, one that includes trade in goods and services (including labour), and broader-based economic cooperation, and, perhaps in the end, some other elements as well development assistance, security, governance matters perhaps. There is a good deal of complexity in such a proposal such as this, for the Forum Island Countries not least, and there will need to be a level of comfort on all sides before we proceed, decisively, down such a track. That said, given that successful regionalism requires larger markets to stimulate growth, a partnership of this general kind between the island countries, on the one hand and Australia and New Zealand, Forum members also, and the nearest metropoles, would seem to me to get to the heart of it if Pacific regionalism is to be strengthened. The importance of these two markets for generating the larger economic benefits to be derived from Pacific regionalism seems clear enough, even if there is a great deal of devil in the detail, and because of this, Pacific Island Leaders, will continue to urge Australia and New Zealand to review its approach to the issue of labour mobility. The last Forum Leaders' meeting agreed, in effect, that this would be so.
14. New Zealand, with its large Pacific population has historically, as we know, opened its labour markets to some Pacific countries through its immigration policies. And against a background of increasing labour shortages and the lowest unemployment rate in the OECD, New Zealand Ministers have indicated that the issues involved are now being looked at more closely. It is of interest that the Pacific Cooperation Foundation Conference, at the end of June, will bring together current thinking and seek to identify the labour needs of both New Zealand and Pacific Islands; ways of creating jobs and developing increased employment throughout the region; and the economic pros and cons of growing the Pacific labour market.
15. There are a range of other specific Pacific Plan regional initiatives relevant to our economic growth objectives. These include, not exhaustively:
" Implementing the Forum Principles on Regional Transport Services (FPRTS), and the full establishment of the Pacific Aviation Safety Office (PASO).
" Developing regional bulk purchasing, storage and distribution of petroleum and pharmaceuticals. A long-standing issue this, and a difficult one. But a start can be made on standardising regulatory frameworks and coordinating negotiations with suppliers. The Small Island States have a particular interest here.
" Maximising sustainable returns from fisheries, again a long-standing issue and one which will require greater unity than we have sometimes enjoyed.
" Implementing the regional tourism marketing and investment plan.
" Implementing a regional digital strategy for improving information and communication technology.
" Establishing an accountable and independent macro-economic and micro-economic technical assistance mechanism (to include statistics collection), to strengthen treasury and finance functions and provide economic analysis, a development, in effect, of the good work done over a number of years by the PFTAC facility.
16. Private sector development issues facing the region are specifically being examined at the Heads of Investment and Promotion Agencies meeting and ACP-EU discussions, taking place as I speak in Tonga and Port Moresby, respectively. Private sector development is also a key agenda item for Forum Trade Ministers when they meet at the end of June and for Economic Ministers in early July.
17. The Forum Secretariat helps countries operationalise policy decisions taken at high-level meetings such as these, and our Regional Private Sector Development Strategy addresses the region-wide need for an enabling environment for business development. With the support of the Forum, a number of private sector summits have been held at national level all of this regional work has to be translated into national circumstances if it is to have any value. These have covered, among other matters, PSD/SME policies and regulations, access to finance, incentives, national private sector representation, entrepreneurial education, technical assistance and capacity building for SMEs, niche product and sectoral development as well as for business organisations.
18. Another recent regional initiative, supported by the Forum Secretariat under the Pacific Plan, is the establishment this year of the Pacific Islands Private Sector Organisation (PIPSO) to represent each Forum Island Country's private sector. PIPSO has now been registered with the Fiji authorities and has finalised its first annual work programme and budget. UNDP, CDE/ProInvest and AusAID have already started working with PIPSO on PSD-related activities. Forum Secretariat trade officers also work at the national level to help countries develop public-private sector partnerships, national export strategies, import management and substitution, as well as technical and quality standards to enhance overall competitiveness. The introduction of a national entrepreneurial education curriculum into schools is also being pursued through a pilot project involve, initially, four Pacific countries, including Fiji.
19. The potential benefits from the kinds of trade arrangements and new initiatives envisaged by the Pacific Plan can be large and so are the measures which are being pursued in the Plan, and elsewhere, which have as their aim, the strengthening of governance. In fact, would, I think, argue, that the benefits of addressing issues of governance dwarf, by a considerable order of magnitude, the benefits from any other of the proposed activities. One is never, of course, obliged to take such matters completely at face value, but for PNG, Solomon Islands, and Fiji Islands, we have estimated the potential of these benefits, in a very preliminary way, to be of the order of US$8 billion (discounted over a 10-year period).
20. To move forward with confidence, we will need to continue to build up transparency, accountability, equity and efficiency in the management and use of resources in the region. This is an area in which, I think it would be fair to say, performance has been mixed. Economic growth requires capital and a number of Pacific Island Countries have not been especially successful in attracting significant foreign investment. High transaction costs in the region are an obvious disincentive. But good governance, apart from the savings it generates, can also be a powerful leverage on foreign investment investment is ultimately an act of faith, and quite evidently, without investors being convinced that the governance procedures of a country are of a quality to ensure a future for their efforts, they will go elsewhere, and we have seen them do so.
21. Regional approaches endorsed by the Pacific Plan have the potential to provide at least part of the solution in a number of governance areas, perhaps initially in respect of Audit and Ombudsman's Offices, anti-corruption measures and the strengthening of judiciaries and legislatures. Again, some careful thought is required about exactly what we might do - and how we do it - we are, after all dealing with matters here which touch on the very fundamental responsibilities of a nation state, if it is to be a nation state. Just as clearly, however, the availability of regional mechanisms may serve to lessen internal constraints on effective governance.
22. The Pacific Plan is based on the assumption that regional approaches are best taken, certainly at this stage, only if and when they add value at a country level and when governments decide that the market or national and local governments cannot provide a service well. I make the obvious, but often misunderstood, point that regionalism is not intended to replace national policies and programmes, but to support and complement them. Protecting and enhancing effective national sovereignty is, in fact, a key goal of regionalism. This can seem counter-intuitive, and people and countries do, obviously worry about what might in some circumstances, appear to be a compromise of sovereignty. It seems to me, though, that a more realistic view is that national governments can, in fact, enhance their sovereignty by having regional bodies implement some of their policy decisions (in effect, as service providers). This devolution of service provision to regional mechanisms can allow national governments to focus on critical priorities and the direct needs of their people rather than spending scarce resources on expensive, duplicative services whose overhead costs might be shared with others. It goes without saying that the regionally provided service will need to be good.
23. We need not, I think, be too puzzled by the fact that our success in implementing regional decisions at national level has thusfar been a thing of parts. That fact is in part a consequence of the historical period we have been going through in the Pacific and of the fact that as experience elsewhere shows, sound regional institutions need to be grown, sometimes painfully. It is also a consequence of the diversity I've already referred to; it will be incumbent upon us to keep examining what actually stands a chance of working region-wide; some specific proposals may have better prospects if approached on a sub-regional, sub-group or indeed, individual basis. It is a question of what works. That said, if strengthened regionalism is to make a positive impact on the lives of Pacific people, then we will have to find better means of matching our regional good intentions with national interest and commitment. There are many aspects to that, by no means all of them matters we can influence. Within the context of the Plan, we are approaching this issue in a range of ways. First, and most importantly, I think, we have begun work on building an appropriate regional architecture; in other words to work out the best and most rational configuration of our regional institutions for achieving our regional objectives.
24. The Secretariat is also now putting a lot more effort into capacity building and coordination at the national level. We are, together with other partners, assisting member countries with the formulation of National Sustainable Development Strategies, this in the context of helping countries develop mechanisms to translate Pacific Plan initiatives into their national circumstances. We will be posting Forum officers in our smaller member states to help make better connections between national needs and regional resources. The services of these officers will be available to the other regional organisations. The regional organisations and others are working to establish 'virtual' technical teams to provide more concerted and integrated assistance to member countries. We are developing monitoring and evaluation mechanisms in respect of the Plan's initiatives , we need to know when to keep riding the horse, and when to get off it. All of that work will have to come together in a more coherent way, over the next few months.
25. There is now both considerable enthusiasm for and heightened expectations of the Pacific Plan. But much, over the longer haul, is going to depend on political will, on good organisation and cooperation among partners. The Plan does not, for the broad range of measures, attempt to provide an all-encompassing solution to the many challenges facing Pacific people, it is all still taking coherent form; many things will have to come together over the next few years if we are to get where we want to go. I would suggest, I hope not over-confidently, that the Pacific Plan is, however, here to stay as a mechanism for shaping the region's longer-term future.
