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South Pacific economy in dire straits
Published in The Saudi Gazette on 21 - 08 - 2008

South Pacific island nations have armies of unemployed and underemployed people who will turn to violence if their economic, social and political problems are not dealt with, a report by a Sydney-based think tank said.
“It is only a matter of time before the growing army of unemployed and underemployed turns from restless to violent,” said a new report on the South Pacific released on Thursday, adding that the region's poor economic development lags similar island nations like those in the Caribbean.
The report by the Center for Independent Studies in Sydney said two million Pacific island men, or four out of five, were unemployed in towns or villages.
“These islanders are bored and frustrated. Unemployment and underemployment are at the core of the Pacific's arc of instability,” it said.
The South Pacific has some of the world's smallest and poorest countries, with economies reliant upon tourism, logging, royalties from fishing and foreign aid.
The island nations of Papua New Guinea, the Solomon Islands, Vanuatu and Fiji have all suffered coups, military rebellions and civil unrest, and have been labeled an “arc of instability” by Pacific analysts.
The report titled “The Bipolar Pacific” said the South Pacific was divided into nations which are developing and those failing to even supply running water and electricity in homes.
Those floundering islands included Fiji, Papua New Guinea, Solomon Islands and Vanuatu, while those developing were the Cook Islands, French Polynesia, New Caledonia, Samoa and Tonga.
“Without employment-led growth, crime and corruption will worsen. Port Moresby (the capital of Papua New Guinea) has become one of the most violent cities in the world,” it said.
“With major criminal interests now operating in the region, the Pacific is developing its comparative advantage as a location for international criminal activities such as people-smuggling, drug production, and arms trafficking,” the report noted.
The danger was that about 80 percent of the South Pacific's population was found in the failing group of islands, where employment was rare and living standards were not rising, it said. “In the low-growth islands, the state of medical services is dire.”
The report said the larger economies in the Pacific needed to reform policies to encourage employment-creating growth. It said nearly 100,000 young men join the labor market each year.
The Pacific population could reach 13 million by 2030, but its current population growth was unsustainable, it said.


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