Baron Waqa, Secretary General of the Pacific Islands Forum, emphasized the necessity of enhancing the effectiveness, affordability, and security of payment systems across the Blue Pacific to foster a more inclusive and resilient regional economy. During his address at the 2025 World Bank and IMF Annual Meetings in Washington D.C., he noted that the payment systems are essential for commerce, remittances, and livelihoods in Pacific Island nations. Unfortunately, many families and businesses in the region still encounter some of the highest transaction costs globally.
To tackle this issue, Waqa highlighted the collaboration between the Forum Secretariat, the World Bank, and regional central banks under the Pacific Strengthening Correspondent Banking Relationships Project. With a budget of USD $77 million, the initiative aims to improve payment systems in eight Pacific Island countries. Papua New Guinea is expected to join as the ninth participant early next year.
This initiative includes a Payments Technical Assistance component that focuses on enhancing payment system oversight, ensuring interoperability, and gathering essential remittance and gender-disaggregated data. Such data will be pivotal in crafting inclusive financial policies. Furthermore, a feasibility study is being advanced for the development of a Pacific Payments Mechanism, intended to design a regional payment aggregation system that can improve economies of scale and reduce costs.
Waqa underlined the importance of leveraging existing platforms, like the Pacific De-risking Group, to navigate the challenges posed by the limited capabilities of Pacific Island nations. He called for a cohesive approach among development partners to provide transparency and alignment with regional priorities in technical assistance.
“Only through collective effort and coordinated action can we build a more connected, resilient, and inclusive financial future for our Blue Pacific,” Waqa stated, conveying hope that through these initiatives, the region can overcome financial barriers and foster unity.
These developments echo previous warnings from regional leaders regarding the loss of Correspondent Banking Relationships (CBR) due to global banks’ “de-risking” practices, which have disrupted access to trade and finance, thereby increasing transaction costs for banks and businesses in the Pacific. The Pacific Strengthening CBR Project seeks to avert further declines in these critical banking ties by enabling comprehensive improvements in the region’s financial infrastructure.
Overall, the concerted efforts towards enhancing payment systems and financial collaboration provide a hopeful outlook for the Pacific Islands, showcasing an ambitious and proactive strategy to secure a sustainable financial future. Through these strong regional partnerships, Pacific nations are positioned to tackle the challenges they face and create resilient economies that can thrive in the face of global uncertainty.
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