Growth will help poverty in Pacific, says AusAID

from the Sydney Morning Herald

Jonathan Pearlman Foreign Affairs Correspondent

AUSTRALIA'S 15 neighbours in the Pacific face daunting challenges to overcome alarming levels of poverty and some smaller states have uncertain futures, a report by AusAID says.

The report, which looks at social and economic conditions in 14 countries in the Pacific plus East Timor, says the region faces serious challenges including rising sea levels, epidemics of malaria, diabetes and HIV and surging oil prices. But it says long-term growth is possible and areas such as transport and aviation have begun to improve.

"Many [of the countries] face growing health problems, increasing environmental threats (including climate change), high levels of joblessness and poverty, and population pressures," the report says. "Without higher, sustained economic growth these challenges will not be effectively addressed … Some of the poorest countries - PNG, Timor Leste and Solomon Islands - have the highest mountains to climb."

The report, which was written by AusAID and guided by 10 business and political leaders from across the region, will be launched today in Vanuatu by the parliamentary secretaries for the Pacific, Duncan Kerr, and international development assistance, Bob McMullan. It says smaller economies are stagnating and economic growth across the region last year was less than 4 per cent of GDP - almost half the rate for developing countries. But the future outlook is "positive" and includes expected growth this year of 4.5 per cent.

The Government will use the report to support development in the Pacific states - a commitment outlined earlier this month in its Port Moresby Declaration. Mr Kerr said the report was grounds for "cautious optimism" and showed improvements were possible.

The report says five states have developed a tourism industry - Fiji, Samoa, Cook Islands, Vanuatu and Palau - and two have benefited from the high prices of oil, copper and gold - Papua New Guinea and East Timor.