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Monday 21 Aug 2017 | 06:56 | SYDNEY
Monday 21 Aug 2017 | 06:56 | SYDNEY

Beating the financial crisis, Melanesia-style

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9 February 2009 16:33

The Pacific Islands region appears to be remote from the catastrophe that began on Wall Street. The popular image of happy locals living on their own fertile land on diets of fresh fish, meat, fruit and vegetables and without any need for bank accounts, mortgages or cars is not an inaccurate way to describe the lifestyle of many Pacific Islanders. 

With this image in mind, the global financial crisis seems to have little relevance to Pacific Island populations. Anthropologist Kirk Huffman’s rosy picture of crisis-free life in Vanuatu suggests we could all learn a lot from Melanesian traditions if we want to survive the financial crisis.

I argued in a Wednesday Lowy Lunch presentation last week that despite this romantic image, the Pacific Islands region was more engaged with the global economy than many observers might imagine. The fall in demand in China will slow economic growth in Papua New Guinea, Solomon Islands and East Timor, largely driven to date by high prices for their resources and commodities exports. Countries like Vanuatu, Samoa, Cook Islands and Fiji will suffer from the decline in tourism that tends to accompany global recessions. 

Even micro-states like Tuvalu, Nauru and Kiribati are feeling the pinch from capital losses to the trust funds they depend on to meet revenue shortfalls. Although most people could survive on subsistence agriculture if required, almost all Pacific Island countries are dependent on imported food to some extent. And cash incomes are increasingly required to pay for education and health services and for fuel, even in subsistence-dependent rural areas.

The impact of the financial crisis might lead some countries to ponder the benefits of stepping back from efforts to integrate with the global economy — this is not the time for withdrawal. But I am not just arguing this because I believe in the power of the free market to drive growth and prosperity in the region. Greater engagement with the world at this time might just give Pacific Island communities an opportunity to teach the world (and their own governments) a thing or two about establishing sustainable economies, running creative trading systems, and investing in renewable energy.

Photo by Flickr user Glahardt, used under a Creative Commons license.

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