Page 13 - Islands Business January 2021

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Panuelo described the dilemma leaders face in the case of
stranded citizens when he said: “I authorised the Chief Mailo
to return home to the FSM because the Government was
faced with two choices. The ship’s crew were already at the
minimum operation requirement, and some of the crew were
saying that they would leave the ship to either stay in the
Philippines or see their families stranded in Guam. So, I could
either abandon the ship the National Government uses to
serve the State of Chuuk, and leave its crew and the 12-year-
old boy from Polowat [the sole survivor of a drifting event]
outside of our care, or I could bring them home…I chose to
bring them home. I could not abandon our citizens, and I
could not abandon a 12-year-old child…I take full responsibil-
ity for this choice.”
The Pacific has not been immune to the spread of specula-
tion and misinformation over COVID-19, and providing clear
and timely information as the vaccines are rolled out will be
critical. There is much to learn from what did and did not
work in terms of our health systems and communications last
year.

The economic outlook
As a region, Pacific Island GDP growth was forecast to shrink
Micro enterprises proliferated in 2020. to 0.5% in 2020, the lowest rate since 1967 according to the
World Bank. While most economies are predicted to grow by
small margins in 2021, the World Bank has outlined a num-
ber of risks to these projections. “The pandemic could last
longer than expected, the long term damage from last year’s
recessions could be deeper than anticipated, balance sheet
stress could intensify, or the contraction in global trade could
be sharper or longer lasting than envisioned. More countries
in the region could experience difficulties with procurement
and distribution of the vaccine than currently anticipated,” it
writes in its Global Economic Prospects report for this year.
“The global community needs to act rapidly and forcefully
to make sure the recent debt accumulation [in develop-
ing countries] does not end with a string of debt crises. The
developing world cannot afford another lost decade,” World
FSM President David Panuelo receives the COVID-19 vaccine Bank Acting Vice President for Equitable Growth and Financial
Institutions Ayhan Kose said.
That is a theme that Roland Rajah and Alexandre Dayant at
the Lowy Institute have also picked up on.
“The Pacific faces a potential ‘lost decade’ owing to the
economic devastation caused by the COVID-19 pandemic
and an inability to finance the scale of government largesse
needed to limit the damage, “ they write. In a policy note
published at the end of last year, Rajah and Dayant suggest
a multi-year ‘recovery package’ of at least US$3.5 billion is
needed for the region to fully recover from the pandemic, and
say this should be funded by the region’s official development
partners.
Specifically, they suggest Australia establish a US$1.4 billion
COVID-19 Pacific recovery loan facility.
Rajah and Dayant advocate for increased investment in
infrastructure maintenance and climate adaptation measures,
and labour-intensive small-scale public works. “Coupling
development partner financing with substantial technical

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