Strengthening Pacific economic engagement with Australia & NZ - - PowerPoint PPT Presentation

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Strengthening Pacific economic engagement with Australia & NZ - - PowerPoint PPT Presentation

Strengthening Pacific economic engagement with Australia & NZ Phil OReilly Business NZ Economic engagement not just Pacific issue World has entered phase of increased economic engagement We in the Pacific can gain from the


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SLIDE 1

Strengthening Pacific economic engagement with Australia & NZ

Phil O’Reilly Business NZ

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SLIDE 2

Economic engagement not just Pacific issue

  • World has entered phase of increased

economic engagement

  • We in the Pacific can gain from the lessons of

increased economic integration elsewhere

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SLIDE 3

Potential challenges from economic engagement

  • ‘Hollowing out’ – population/brain drain from

small centres

  • Encourages credit-based economics →

volatility, debt risks e.g. Asian crisis 1997

  • Local cultures weakened?
  • National sovereignty undermined?
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SLIDE 4

Potential integration benefits

  • Greater trade flows
  • Greater returns from specialisation
  • Stable international institutions (WTO, ILO etc)
  • More widespread use of technology
  • Pressure for democracy, openness, transparency
  • Overall, economic engagement a good thing
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SLIDE 5

Who loses?

Q: Which countries lose out in context of greater economic engagement? A: Countries that:

  • erect or maintain trade barriers
  • don’t specialise
  • don’t enforce rule of law
  • deter investment
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SLIDE 6

Who gains?

Q: Which countries benefit from more economic engagement? A: Countries that:

  • make free trade deals
  • specialise to sell to defined markets
  • create business-friendly environments
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Business-friendly environment:

  • Rule of law: fair enforcement, corruption-free
  • Light-handed regulation, easy for business to

comply

  • Regulation that doesn’t deter foreign

investment

  • Investment in education, skills
  • Investment in infrastructure
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SLIDE 8

Enablers

Pacific nations wishing more economic engagement with Aust, NZ could consider policy moves towards:

  • specialisation of goods & services
  • investment-friendly environment
  • more open trade to encourage

specialisation

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SLIDE 9

Enablers - specialisation

  • ‘Doing what you do best’
  • Tourism (natural environment, hospitality)
  • Specialised crops sugar, kava etc
  • Others? – increasingly, we all have to fiind

more

  • Have to move up the value chain
  • Where are your new areas of speciality to be

found?

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SLIDE 10

Look to your strengths

  • Finding new areas for specialisation involves

considering your competitive advantages – resources & people

  • Pacific people strengths – open, friendly,

hard-working, sense of family, sense of community, have great contacts in many parts of the world….

  • How do you see your strengths?
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Specialisation case study: kava

  • Traditional medicine – analgesic, tranquilliser,

anti-depressant, also ceremonial uses

  • 1990s: significant kava industry in Vanuatu,

Fiji, Samoa, Tonga

  • 10,000 hectares under cultivation
  • US$200 million annually from US, Europe
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Specialisation threatened

  • 2002: Germany banned kava products
  • Evidence linked kava to liver disease
  • Other EU countries followed suit
  • But Pacific growers had invested heavily in

kava specialisation → economic loss

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Pacific response

  • Individual Pacific countries could not fight the

ban alone

  • Grouped together with European drug

industry reps, alerted WTO

  • Requested World Health Organisation inquiry

into kava ban

  • Medical literature surveyed
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Review of kava ban

  • Inquiry found kava dangers overestimated by

German authorities

  • New studies initiated
  • Germany now reviewing kava ban

What worked:

  • Pacific nations worked as a team
  • Made good use of international institutions
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Other enablers - dialogue

Regional dialogue e.g. recent ILO-Business NZ Pacific Workshop brainstormed responses to Vanuatu, PNG, Samoa, Fiji, Solomons, Kiribati issues:

  • overtaxation
  • political corruption
  • political volitality
  • overregulation of business
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Enablers – resident links

Resident links

  • Useful to create database of Pacific Island

people living in Australia, NZ

  • Keep in touch with those residents
  • They are a connecting ‘bridge’
  • Support network for individuals
  • A base for outreach initiatives
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Enablers - education

Education

  • Education of Pacific Island people in Aust, NZ

creates communities of interest in both countries

  • (Similar to effect of 1960s Colombo Plan in

NZ – forged relationships that are paying off now)

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Enablers – leadership

Leadership Changes required to improve economic engagement start at the top

  • Leaders must model attitudes to education,

transparency, rule of law

  • Hard policy issues – overtaxation,
  • verregulation, corruption can only be

attacked by lawmakers

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Enablers - partnerships

Partnerships

  • For education – more NZ/Pacific education

initiatives may now be possible with growth in PTEs in NZ

  • For infrastructure – PPPs possible with

private or public sector organisations in NZ & Pacific

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We’re all in same boat

  • Australia & NZ the same as other Pacific

nations

  • In global context, we all have relatively small

populations

  • Our citizens migrate to larger centres
  • In global context, we all are relatively small

economies

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Remoteness

  • As Pacific nations we’re all remote from the

rest of the world

  • But isolation can be a benefit
  • Free from ‘old world’ paradigms
  • Less danger from terrorism, disease
  • How can the Pacific use remoteness to its

advantage?

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Economic engagement

  • Globally, all of us in the Pacific are ‘close to

the edge’

  • We can use the positive forces of economic

engagement

  • Need to get past old paradigms
  • Economic engagement in the Pacific is in all
  • ur interests