The World Bank has issued a significant call for increased investment in its latest Pacific Economic Update, addressing the region’s declining economic growth. The report, titled “Diminishing Growth amid Global Uncertainty: Ramping Up Investment in the Pacific,” emphasizes the urgent need for focused investments to generate jobs, enhance infrastructure, and build resilience against climate impacts, all in the face of global uncertainties.
According to the report, economic growth in the Pacific is projected to decrease to 3.6 percent in 2024, a drop from 5.8 percent in 2023. This decline is attributed to a waning post-pandemic recovery, weak investment, escalating climate risks, and enduring structural challenges, resulting in a less optimistic outlook compared to previous years.
The World Bank warns that if immediate measures to escalate investment are not taken, Pacific nations could face obstacles in reducing poverty and creating new economic opportunities for their populations. Stephen N. Ndegwa, the World Bank’s Country Director for the Pacific and Papua New Guinea, noted that while the region confronts pressing challenges, there exists an opportunity for transformative change.
He stated, “By prioritizing investments in key sectors and increasing efficiency, Pacific countries can unlock economic growth that directly benefits local communities, creates jobs, and enhances resilience to climate change impacts.”
The Pacific Economic Update presents six essential recommendations aimed at driving investment and ensuring that local populations benefit from economic growth. These actions include focusing on high-potential sectors like agriculture, sustainable tourism, and the blue economy, which are poised to create jobs and bolster rural livelihoods.
Furthermore, improving infrastructure—such as transportation networks and energy systems—will enhance connectivity, allowing businesses to grow and generate more employment opportunities. The report also stresses the importance of building fiscal and climate resilience, suggesting investments in sustainable infrastructure and disaster preparedness.
In order to attract private investment, regulatory reforms are required to simplify business operations, which could spur growth in vital sectors and promote local development. Additionally, increasing access to financing, particularly for small enterprises, is crucial for fostering sustainability and long-term economic growth.
The report highlights the significance of harnessing international financial assistance to initiate impactful projects benefiting Pacific communities. It concludes that appropriate policy measures designed to boost investment can help Pacific nations navigate current economic difficulties, create a resilient future, and deliver real advantages to communities, businesses, and governments throughout the region.