By Dennis McKinlay As New Zealand begins a slow climb out of the recession, it's easy to forget that our neighbours in Pacific island states are far worse off than us - as their incomes fall and costs rise.

Remittances from relatives in New Zealand are a huge source of income to Pacific island states. In 2005 the International Monetary Fund said remittances were worth US$425 million ($567 million), representing 22.5 per cent of Polynesia's income and 40 per cent of Tonga's.

Remittances are double the value of overseas aid, says the Ministry of Foreign Affairs and Trade.

Although it is not certain how much remittances have changed since the 2008 financial crisis, the evidence about Pacific island economies points to an unhappy cocktail of falling incomes and rising costs and unemployment.

There is a two to one multiplier. A fall of 1 per cent in New Zealand's GDP means a 2 per cent fall in the Pacific island states, says a 2009 Unicef report, called Protecting Pacific Island Children and Women during Economic and Food Crises.

With New Zealand's flat economy today, remittances are unlikely to increase for a while.

This report paints a bleak picture of the Pacific, pointing to a tsunami of increased food and fuel prices in Pacific island states, combined with decreased remittances from relatives in New Zealand.

The report found that in previous financial crises, the labour market has taken four or five years to recover.

The Pacific is a huge and complex place. There is a wide disparity in wealth between countries. To explain the differences, the UN Development Programme has produced a Poverty Index. At the top are the Pacific people we mostly see coming to New Zealand - Samoa, Tonga, Niue and the Cook Islands. Fiji is more than twice as poor as Tonga and at the bottom are the Solomons and Papua New Guinea.

The better off Pacific island states have a middle class, Government employees and free primary school education. But in the worse off Pacific countries, such as Papua New Guinea and the Solomon Islands, young children are about 10 times as likely to die as in developed countries.

In Papua New Guinea there is also an HIV/Aids epidemic. Unicef and its partners have had a programme there for years. It is beginning to have some effect, particularly in reducing the rate of transfer of Aids from mothers to children. Continued subsistence agriculture, high child deaths and poverty will be their lot until the circuit is broken.

A reliance on imported food has weakened many of the wealthier Pacific island states. So inflation from imported food has become a serious problem - in Tonga as high as 12 per cent. People are increasingly relying on staples such as bread and rice, rather than fresh vegetables and fruit. A UN study has found nearly half of the average Pacific household budget is spent on food - even in rural areas.

If you live in the country you can probably grow fruit or veges, but for urban slum dwellers, it's not an option.

But the worst hit by the recession are those who find it hard to help themselves: people without land, the elderly, widows, orphans, children in large families, those supporting relatives, unemployed youth and school drop-outs.

Education should be the key for the Pacific island states to climb out of poverty. But even in better off Pacific states, too few children attend secondary school, meaning they remain unskilled.

In the Solomon Islands and Papua New Guinea, too few children attend primary school. Girls are more likely to be kept at home than boys after an economic crisis hits - reflecting the common belief that educating boys is more important. But as girls' rate of school attendance rises there is a measurable improvement in children's health.

The good news is that over the past decade, increasing numbers of Pacific girls and boys are attending primary school. But only the Cook Islands, Federated States of Micronesia, Tonga and Tuvalu claim 100 per cent attendance at primary school. The report has suggested some simple remedies.

They include improving teacher quality (including paying extra to better or more skilled teachers) and encouraging more girls to attend school. Simple steps, such as providing separate toilets and washing areas for boys and girls will help here.

Unicef favours a broader thrust policy change, focusing on the poorest of the poor. This may mean taking a particular interest in say, urban slum dwellers.

It may mean that NGOs and governments need to co-operate better. It means starting from scratch in some Pacific countries - giving poorer children therapeutic foods and mosquito nets and teaching women and children about their rights - so they can better help themselves. Pacific Governments - perhaps with help from ours - could work on strengthening social policy.

But there is a step that you, the reader, could also take. You could donate to an aid organisation that is running schools in the poorer island states. Or buy a gift for someone in need overseas. It needn't cost much.

Dennis McKinlay is executive director of Unicef New Zealand.

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