Deputy Prime Minister Professor Biman Prasad recently welcomed World Bank Group President Ajay Banga during his first visit to Fiji, where they discussed significant challenges facing the region.
Professor Prasad pointed out that Pacific Small Island Developing States (SIDS) confront unique development obstacles that are often difficult to articulate through reports and presentations. He expressed gratitude to Mr. Banga for taking the opportunity to witness firsthand the intense challenges experienced by Fiji and other Pacific islands.
He noted that the Pacific region deals with the highest costs in banking, digital connectivity, air travel, and shipping globally, with populations spread across numerous islands. The Fiji-Tuvalu airlink, in particular, was highlighted as having exceptionally high overhead costs.
The Deputy Prime Minister emphasized that the region’s distance from markets affects its competitive capacity, and several countries are nearing economic collapse due to climate change vulnerabilities. He mentioned that the continued outflow of skilled workers to developed nations is leaving Pacific states increasingly “hollowed out.”
Additionally, he addressed the increasing expenses associated with global market access for agricultural products such as sugar and kava, which negatively impact the livelihoods of farming and rural communities.
Professor Prasad highlighted the issue of Pacific tuna migrating to cooler waters, significantly affecting nations that depend on it as their primary export. He stated, “All our infrastructure stands hostage to climate change – excessive rains, storm surges, frequent and unseasonal floods, and higher surface temperatures mean that debt levels constrain our ability to respond.”
He added that the costs of repairing essential services, including schools, health centers, roads, airports, jetties, and wharves, are rising dramatically. A large portion of investment budgets is being consumed by emergencies and recovery efforts after cyclones.
Ultimately, Professor Prasad concluded that the Pacific’s limited economic drivers remain at the mercy of deglobalization, geopolitical tensions, and climate change.