REMARKS: Vanuatu’s Finance, Economic Management DG August Opens FEOM

The Deputy Secretary General of the Pacific Islands Forum Secretariat;
Excellencies and Senior Economic Officials;
Representatives of CROP agencies and Development Partners;
Representatives of the Private sector and Civil Society Organisations
Distinguished Participants; and,
Ladies and Gentlemen.

Good morning, and Welkam Olketa

• On behalf of the Government of Vanuatu and the Honourable Minister of Finance and Economic Management, Johnny Koanapo Rasou, I welcome you all to this Forum Economic Officials Meeting.

• Before I make a few remarks, let me firstly thank the Senior Economic Officials for your confidence for me to chair this meeting.

• Next, I would like to thank the Secretary for Finance of Tuvalu for the stewardship of the Forum Economic Official Meetings in the last two years.

• Vanuatu is very pleased indeed to welcome all the Honourable Economic Ministers and Senior Officials to our first in-person Forum Economic Officials Meeting in three years since we closed our borders to keep the COVID-19 pandemic at bay.

• Allow me to also acknowledge the delegates from New Zealand, Solomon Islands and Tuvalu who are joining this meeting online. Thank you for making time to attend this meeting.

• My fellow Officials, our Leaders have endorsed the 2050 Strategy for the Blue Pacific Continent last month in Suva. In line with this mandate, our theme for this FEMM is “Towards a Resilient Economic Recovery and Stability”. At the heart of resilience, is the need for us to be more risk-centred in our economic development approach, to confront our challenges with a sense of urgency, and to be coherent in our regional actions, to make 2050 a reality.

• At the official technical level, I believe each of us here knows exactly what the financial and fiscal position of our countries are. We know the challenges, we feel the heartbeat of our countries, as we manage the finances of our governments’ every day.

• COVID-19 has taken its toll on our economies and led to loss of lives in our countries. According to the World Health Organisation, as of last week, there have been 3,200 deaths, and 423,726 cases across 21 Pacific countries. We remember those who have lost loved ones during the pandemic.

• According to ADB’s Pacific Economic Monitor, the Pacific’s regional GDP contraction for 2021 is downwards to -0.6%. Conversely, the 2022 forecast which was projected to rebound by 4.7%, is now cast in a gloomy light.

• At the same time, the IMF’s July World Economic Outlook forecasts increasingly gloomy developments in 2022, with the global outlook overwhelmingly tilted to the downside. The IMF’s forecast is for global growth to slow to 3.2 percent in 2022 and further down to 2.9% in 2023, while inflation has been revised upwards to 6.6% in advanced economies and 9.5% in emerging and developing economies.

• Our combined regional economic response to COVID-19 and the support from our development partners has fortified us to a certain extent from the short-term effects of the pandemic. The crisis has also exposed some of our core vulnerabilities and legacy issues, which we urgently need to deal with.

• The matter before us now is, how do we recover faster, stronger, together, with limited or tightening fiscal head space and debt levels, against a gloomy global forecast? How do we strategize our recovery in such a way, that in spite of these challenges, we build our resilience simultaneously as we respond to ongoing shocks?

• In order to move forward, we need to recognise the risks to our recovery and obstacles to our economic pathway to 2050, and how we design our economic response to mitigate these shocks, so that our development can be non-regressive, given our scarce fiscal and other resources.

• If COVID-19 was the first global shock, then the impact of global fuel price increases on inflation and increased food, energy, transport prices, would be the second. What then will be the impact on the Pacific from the on-going conflict in Europe and what appears to be brewing geo-political instability in the Taiwan strait? And I have not even mentioned shocks from disasters and climate change risks.

• My fellow Secretaries of Finance, the answers we seek to these questions are before us. We will deliberate on them today. Our Honourable Ministers are looking to us to deliberate on the agenda today as articulated by the Deputy Secretary General, and to bring up to them tomorrow, a set of recommendations that offers clear actions to lead us out of the crisis into a more fiscally stable and sustainable recovery phase.

• This is a critical point of pivot in our economic trajectory, what we recommend today will shape our medium to long-term economic prosperity. Let us deliberate with careful thought, as the outcomes from these first face to face FEMM meeting, will define and shape the character of our Pacific spirit, to boldly respond to this crisis from a place of dignity, creativity, and strength.

Thank you Tumas.