亚开行-《太平洋经济观察报》-2024年8月：以太平洋方式建立韧性

PacificEconomicMonitor

August2024/pacmonitor

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BuildingResilience

thePacificWay

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2Highlights

Contents

InternationalandRegionalDevelopments3

CountryEconomicIssues6

PolicyBriefs:

BolsteringClimateResilienceinthe28

PacificIslands

ResilientInfrastructure—ThePacificWay32PublicFinancialManagementand38

EconomicResilience

UnderstandingVulnerability,Fragility,42

andResilienceinPacificSmallIslandDevelopingStates

EconomicIndicators47

CreativeCommonsAttribution3.0IGOlicense(CCBY3.0IGO)

©2024AsianDevelopmentBank.

Somerightsreserved.Publishedin2024.PrintedinthePhilippines.

ISBN978-92-9270-821-4(print);978-92-9270-822-1(PDF);978-92-9270-823-8(ebook)

PublicationStockNo.SPR240375-2

DOI:http://dx.doi.Org/10.22617/SPR240375-2

AsianDevelopmentBank

PacificEconomicMonitor,August2024.MandaluyongCity,Philippines.

ThiseditionoftheMonitorwaspreparedbyGholam

Azarbayejani,RobertBoumphrey,PrinceCruz,Lily-Anne

Homasi,AnaIsabelJimenez,KaukabNaqvi,KatherinePassmore,CaraTinio,JenniferUmlas,andIsoaWainiqolo.Publishing

productionassistancewasprovidedbyCecilCaparas.

Theviewsexpressedinthispublicationarethoseoftheauthorsanddonotnecessarilyreflecttheviewsandpoliciesofthe

AsianDevelopmentBank(ADB)oritsBoardofGovernorsorthegovernmentstheyrepresent.

ADBdoesnotguaranteetheaccuracyofthedataincludedinthispublicationandacceptsnoresponsibilityforany

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endorsedorrecommendedbyADBinpreferencetoothersofasimilarnaturethatarenotmentioned.

Bymakinganydesignationoforreferencetoaparticularterritory

orgeographicareainthisdocument,ADBdoesnotintendtomakeanyjudgmentsastothelegalorotherstatusofany

territoryorarea.

ThispublicationisavailableundertheCreativeCommonsAttribution3.0IGOlicense(CCBY3.0IGO)

/licenses/by/3.0/igo/

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AsianDevelopmentBankProjections

GDPGrowth

Nauru

1.8

PacificsubregionPacificislands

2015105

0 (5)(10)(15)

2.0

Vanuatu

1.9

2.42.52.5

2.62.3

2.71.7

SolomonIslandsTonga

MarshallIslands

3.02.7

3.12.8

202021

222324p25p

Fiji

FSM

3.33.5

4.6

PapuaNewGuinea

Tuvalu

2.4

4.24.0

Samoa

5.3

Kiribati

3.5

6.5

8.0

Palau

9.1

5.2

CookIslands

0.04.08.012.0

2024p

2025p

ChangeinrealGDP(%)

Inflation

PacificsubregionPacificislands

Tuvalu

SolomonIslands

Fiji

Kiribati

FSM

Tonga

Samoa

CookIslands

PapuaNewGuinea

Vanuatu

6

4

2

0

(2)

3.0mm3.0

3.2mm2.7

3.7mm2.6

4.03.0

4.1

3.5

202021222324p25p

4.54.24.54.3

4.5mm2.3

4.54.8

4.8mm2.9

5.5mm1.0

Palau

5.84.3

MarshallIslands

10.3

3.5

Nauru

0.03.06.09.012.0

Changeinconsumerpriceindex(%,annualaverage)2024p2025p

()=negative,FSM=FederatedStatesofMicronesia,GDP=grossdomesticproduct,p=projection.Notes:

1.ProjectionsareasofJuly2024andrefertofiscalyears.Fiscalyearsendon30JunefortheCookIslands,Nauru,Niue,Samoa,andTonga;31JulyforFiji(forgovernmentfinancedataonly);30SeptemberfortheMarshallIslands,theFederatedStatesofMicronesia,andPalau;and31Decemberelsewhere.

2.SubregionalaveragesofGDPgrowthandinflationarecomputedusingweightsbypurchasingpowerparityGDPincurrentinternationaldollars.

3.AveragesforthePacificislandsexcludePapuaNewGuinea.Source:AsianDevelopmentBankestimates.

INTERNATIONALANDREGIONALDEVELOPMENTS

Steadygrowthisexpecteddespiteheadwinds

●Globaleconomicgrowthwas3.2%in2023,aseconomicactivityshowedresiliencedespiterisinginterestrates,andisprojectedtoremainatthisratein2024–2025.Thisislowerrelativetohistoricalperformanceascontinuedhighborrowingcosts,fiscalconsolidation,mutedproductivitygrowth,lingeringimpactsofglobalshocks,andincreasingconstraintstotradeandinvestmentflowsareallseentolimitexpansion.Meanwhile,growthindevelopingAsiawas5.1%in2023,drivenbyaresurgenceindomesticdemand.Thisisprojectedtobe5.0%in2024and4.9%in2025.SustainedexpansioninSouthAsiaandSoutheastAsia,fueledbyrobustdomesticdemandandhighersemiconductorandservicesexports,shouldoffsetmoderatinggrowthelsewhereintheregion,includinginthePeople’sRepublicofChina(PRC).

●Afterexpansionof3.5%in2023,thePacificsubregionisprojectedtogrowby3.3%in2024and4.0%in2025.RecoveryofresourceextractioninPapuaNewGuinea,stablevisitorarrivalsinmosttourism-dependenteconomies,andstimulusfrompublicinfrastructureprojectsareseentodrivegrowth.However,thisoutlookhasseveraldownsiderisks,includinglaborshortages,reducedfiscalspace,continuedexposuretodisasterrisk,andvolatilityinglobalcommoditypricesandsupplychains.

●TheUnitedStates(US)economygrewbyanannualrateof1.3%inthefirstquarter(Q1)of2024comparedto3.4%inQ42023.Themoderationreflectedslowergrowthinconsumerandstateandlocalgovernmentspendingandexports,aswellasreducedfederalgovernmentspendingandincreasedimports.Growthisprojectedtobe2.0%in2024beforeslowingto1.7%in2025.

●InthePRC,grossdomesticproduct(GDP)grewby5.3%(year-on-year)inQ12024,slightlyfasterthanthe5.2%growthrealizedinQ42023.Growthinhigh-techmanufacturingdroveanexpansionof6.1%inindustrialoutput.However,thecontinuingdownturnintherealestatesectorremainsachallenge,withseriousimplicationsforconsumerspending.ThePRCeconomyisforecasttogrowby4.8%in2024and4.5%in2025.

●Japan’sGDPdeclinedbyanannualrateof1.8%inQ12024afternogrowthinQ42023.Privateconsumptionfellforthefourthstraightquarterby0.7%,asrisingcostsdampeneddemand.Privateinvestmentsandnetexportswerealsosubdued,butgovernmentconsumptionandpublicinvestmentsincreased.TheJapaneseeconomyisseentogrowby0.6%in2024,risingto1.0%in2025.

●TheAustralianeconomyremainedflatinQ12024,recordingannualizedgrowthof0.1%after0.3%inthepreviousquarter.Householdconsumptionincreasedduringtheperiod,asdidgovernmentexpendituredrivenbyincreasedspendingonsocialassistance,energybillreliefpayments,andnationaldefense.Accumulationofinventorieslikewisecontributedtogrowth.Offsettingthesedevelopmentsweredeclinesintotalinvestment,reflectingthewindingdownofrecentminingandgovernmentprojects,subduedpropertymarketactivity,andincreasedmerchandiseimports.Growthisprojectedtobe1.4%in2024,pickingupto2.3%in2025.

GrossDomesticProductGrowth(%,annual)

WorldDevelopingAsia UnitedStatesPRC

Japan

AustraliaNewZealand

0123456

20232024p2025p

p=projection,PRC=People’sRepublicofChina.

Notes:AsdefinedbyADB,developingAsiacomprisesthe46ofthebank’smembersinAsiaandthePacific.

FiguresarebasedonADBestimatesexceptforworldGDPgrowth(IMF),andAustraliaandNewZealand(ConsensusEconomics).

Sources:AsianDevelopmentOutlookdatabase(accessed

17July2024);ConsensusEconomics.2024.AsiaPacific

ConsensusForecastsMay2024;andInternationalMonetaryFund.2024.WorldEconomicOutlook:SteadybutSlow:

ResilienceAmidDivergence(April).

GrossDomesticProductGrowthinDevelopingAsia(%,annual)

10

mlulin

8

6

4

2

0

ThePacific

DevelopingAsia

SouthAsia

SoutheastAsia

EastAsia

Caucasus

andCentral

Asia

2024p

2025p

20222023

p=projection.

Note:AsdefinedbyADB,developingAsiacomprisesthe

46ofthebank’smembersinAsiaandthePacific.

Source:AsianDevelopmentOutlookdatabase(accessed

17July2024).

4PacificEconomicMonitor

FoodPrices

(January2022=100)

160

140

120

100

80

60

Jan2022

May2022

Sep2022

Jan2023

May2023

Sep2023

Jan2024

WorldBankfoodpriceindexCereals(grains)

Rice——Oilsandmeals

Source:ADBcalculationsusingdatafromtheWorldBank.2024.

WorldBankCommodityPriceData

(PinkSheet)

(accessed14May2024).

PricesofSelectedResourceExportCommodities(January2022=100)

180

160

140

120

100

80

2022

2022

2022

2023

2023

2023

2024

60

Jan

May

Sep

Jan

May

Sep

Jan

LNGLogsGold

LNG=liquefiednaturalgas.

Source:ADBcalculationsusingdatafromtheWorldBank.2024.

WorldBankCommodityPriceData

(PinkSheet)

(accessed14May2024).

●NewZealandrecordedaslightannualizedgrowthof0.2%inQ12024comparedwitha0.1%contractioninQ42023.Expansioninrental,hiring,andrealestateservices,aswellaselectricity,gas,water,andwasteservices,offsetdeclinesinconstruction,manufacturing,professionalservices,andpublicadministration.Ontheexpenditureside,privateconsumptionroseby0.8%asspendingonservicesandnon-durablegoodsincreased,offsettinga6.1%increaseinimports—mainlyofintermediategoodsandgoodsforconsumption—anda1.3%declineingrosscapitalformation.TheNewZealandeconomyisseentogrowby0.7%in2024and2.3%in2025.

Internationalfoodandfuelpricesmoderating

●ThepriceofBrentcrudeoilaveraged$83.15perbarrelinQ12024,downfrom$84.03inthepreviousquarter.Theaveragepriceisforecasttobe$84.00perbarrelin2024,slightlyhigherthanin2023.Thisisnearly$17.00lowerthanthe2022annualaveragewhenconcernsoverthefalloutfromtheRussianinvasionofUkrainesawpricessurge.Brentcrudeoilhit$90.05perbarrelinApril2024amidescalatingtensionsintheMiddleEast,attacksonRussianrefineries,andanextensionofoutputcutsthroughJune.

●TheWorldBankfoodpriceindexdeclinedinQ12024by3.9%fromthepreviousquarter.Grainpriceswere4.3%lowerinQ12024comparedtoQ4

2023aswheatandcornpricesfell.AftertheRussianFederationterminatedtheBlackSeaGrainInitiativeinJuly2023,UkraineinitiatedthemovementofcivilianvesselsthroughanewcorridorinOctober2023.EstablishingthisnewcorridortoresumeBlackSeaexportshasboostedUkraine’sexportsofgrainsandagriculturalproducts,especiallycorn.Pricesofoilsandmealsalsodecreasedby5.2%inQ12024.Ontheotherhand,ricepriceshavebeencontinuouslyrisingsincetheendof2022,increasingby3.5%inthesamequarter.Theywillremainhighin2024,assumingIndiamaintainsitsexportrestrictionsandtherewillbeamoderate-to-strongElNiño.

●Liquefiednaturalgas(LNG)pricesreachedrecordhighsin2022buthavedeclinedcontinuouslysinceQ22023,despiteglobalLNGproductionremainingrelativelytightin2023.ThedeclineinLNGpriceshascontributedtoincreasedgasconsumption.Ontheotherhand,goldpricescontinuedtheirupwardtrajectory,supportedbystrongdemandamidheightenedgeopoliticaltensions.Recentpriceincreaseshavebeensupportedbystrongdemandfromseveralemergingmarketsanddevelopingeconomiesandincreasedactivityinexchange-tradedfundsinthePRC.Higherpriceswerealsoobservedforcocoa(43.6%),coffee(4.8%),andcoconutoil(9.8%),whilepricesdeclinedforlogs(0.5%)andsugar(4.9%)inQ12024.

TourisminthePacificshowsvaryingrecoverytrends

●AustraliaandNewZealandremainsignificantvisitormarketsinthePacificsubregion,andAustralianvisitorstomostmajorSouthPacificdestinationshaveexceededpre-pandemiclevels.BetweenJanuaryandApril2024,AustralianvisitorstoVanuatuwere14.9%higherthantheaverageforthesameperiodsin2018–2019.AustralianvisitorstoFijiandSamoawereupby18.5%and29.8%,respectively.

●Duringthesameperiod,109,989NewZealandersvisitedthePacific,a6.0%increasefromthe2018–2019average.ThenumberofNewZealandvisitorstotheCookIslands(25,794)was7.5%higherthanpre-pandemiclevels,whilevisitorstoTonga(9,179)were93.8%ofthe2018–2019averageforthesameperiod.

TouristDeparturesforPacificDestinations(‘000persons,JanuarytoApriltotals)

142.6142.8152.0

110.0

103.0

93.194.3

65.566.3

22.6

0.40.8

201920202021202220232024

AustraliaNewZealand

Sources:GovernmentofAustralia,AustralianBureauof

Statistics.

OverseasArrivalsandDepartures

(accessed

15June2024),andGovernmentofNewZealand,StatsNZTataurangaAotearoa:

InternationalTravelandMigration

(accessed15June2024).

140

120

100

80

60

40

20

0

OutboundTourismfromMajorSourceMarkets(relativetopre–COVID-19pandemiclevels,monthly)

2018-19monthlyavg.=100

Jan-21Jul-21Jan-22Jul-22Jan-23Jul-23Jan-24

——AustraliatoPacificNewZealandtoPacificJapantoGuamandCNMIUStoAsiaandOceania

avg.=average,CNMI=CommonwealthoftheNorthernMarianaIslands,COVID-19=coronavirusdisease,

US=UnitedStates.

Sources:GovernmentofAustralia,AustralianBureauofStatistics.

OverseasArrivalsandDepartures

(accessed30June2024);GovernmentofNewZealand,Stats

NZTataurangaAotearoa.

InternationalTraveland

Migration

(accessed30June2024);GovernmentoftheUS,DepartmentofCommerceInternationalTradeAdministration.

USOutboundTraveltoWorldRegions

(accessed04July2023);andJapanTourismMarketingCo.

JapaneseOutboundTouristsStatistics

(accessed30June2024).

Leadauthors:AnaIsabelJimenez,CaraTinio,andJenniferUmlas.

InternationalandRegionalDevelopments5

●InQ12024,Tongawelcomed18,773visitors,equivalentto74.9%oftheaverageforthesameperiodin2018–2019.Ontheotherhand,thetotalnumberofvisitorstotheCookIslandsandSamoawasupby5.6%and1.1%,respectively.

●FromJanuarytoApril2024,Fijirecorded271,683visitors.Palaureceived19,159visitorsduringthesameperiod,equivalentto48.7%oftheaverageforJanuary–April2018–2019.OfthetotalvisitorstoPalau,mostwerefromthePRC(6,564;or34.2%),followedbyCanadaandtheUS(3,703;19.3%),andTaipei,China(3,460;18.1%).

●AirNiuginisuspendedweeklyservicefromBrisbane,Australia,toPalauviaPortMoresbyduetolowpassengerandfreightdemand.Atthesametime,NauruAirlinescommencedanonstopflightbetweenPalauandBrisbaneunderanAustralian-supportedscheme.UnitedAirlines,CambodiaAirways,andamajorairlinebasedinTaipei,Chinacarriedalmost90%ofarrivalstoPalauinApril2024.

●AirVanuatu—astate-ownednationalairline—wentintoliquidationinMay2024.TheairlinepreviouslyoperatedflightstoSydneyandBrisbane,Australia;Nadi,Fiji;Auckland,NewZealand;andotherSouthPacificdestinationsandcontrolledallthedomesticroutes.Thepotentialdeclineintourismisexpectedtosignificantlyimpacttheservicessector,includingretailandwholesaletrade,hospitality,andtransport.Moreover,thedisruptioninairtravelinanarchipelagicandsmallstatelikeVanuatucouldlimittheavailabilityandmobilityoflaborandcargoforinfrastructureinvestment(seepage25).

References

AsianDevelopmentBank.2024.

AsianDevelopmentOutlookApril2024.

ConsensusEconomics.2024.

AsiaPacificConsensusForecastsMay2024.

GovernmentofAustralia,AustralianBureauofStatistics.2024.

Australian

NationalAccounts:NationalIncome,ExpenditureandProduct.

Mediarelease.

5June.

GovernmentofJapanCabinetOffice,EconomicandSocialResearchInstitute.2024.

QuarterlyEstimatesofGDP,January–March2024(the2ndpreliminary).

GovernmentofNewZealand,StatsNZTataurangaAotearoa.2024.

Gross

domesticproduct:March2024quarter.

Mediarelease.20June.

GovernmentoftheUnitedStatesBureauofEconomicAnalysis.2024.

GrossDomesticProduct(SecondEstimate),CorporateProfits(Preliminary

Estimate),FirstQuarter2024.

May.

L.He.2024.

China’seconomyexpandsbyasurprisinglystrongpaceinthefirst

quarterof2024.

CNN.16April.

InternationalMonetaryFund.2024.

WorldEconomicOutlook:SteadybutSlow:

ResilienceamidDivergence.

April.

InternationalMonetaryFund.2024.

IMFStaffCompletes2024ArticleIV

MissiontoVanuatu

.20June.

RNZ.2024.

DomesticmarkethitbyAirVanuatufallout

.13May.

WorldBank.2024.

CommodityMarketsOutlook,May2024.

COUNTRYECONOMICISSUES

BuildingClimateandDisasterResilienceintheSouthPacific

Leadauthors:Lily-AnneHomasi,AnaIsabelJimenez,CaraTinio,andJenniferUmlas

TheSouthPacificeconomiesoftheCookIslands,Samoa,andTongaarehighlyvulnerabletotheadverseeffectsofclimatechange,includingincreasedintensityofrainfallandtropicalstorms,risingsealevels,anddroughts;disasterstriggeredbynaturalhazardincludingearthquakes,volcaniceruptions,andtsunamis;andhealthemergencies.Thisexposureisnotjustduetogeographicallocationandtopography,butalsotoeconomicandpublicfinanceconstraints—includingdependenceonclimate-sensitivesectorssuchasagriculture,fisheries,andtourism—thatcanaffectthecapacityforreconstructionandrehabilitation.Withincreasingtemperatures,shiftingrainfallpatterns,andrisingsealevels,climatechangeraisesdisasterrisksfromflashfloods,cyclones,coastalinundation,drought,andvector-bornedisease.Italsoincreasestheimpactofsuchevents,whichrangefromdamagetoinfrastructure,crops,andbuildingstothelossoflivesandlivelihoods.

TheWorldEconomicForum(2023)estimatesthatglobalclimatechangewillcost$1.70trillionto$3.71trillionby2050,or$16.00millionperhour.Thisestimateincludesthedamagetoinfrastructure,agriculture,andhumanhealth.IntheSouthPacific,thesecostscouldbe90%–100%oftheannualbudget,giventhecrosscuttingnatureofclimatechangewithadaptationandmitigationactivitieschanneledthroughsectorssuchaseducation,health,transport,andenergy.Theseexcessivecostssuggesttheimportanceofstrategicallydevisingfoundationalpoliciesthatwillbuildtheresilienceofinterventionsandtheirimpactonthesustainabilityofthissubregion.Policyareascoveringeconomicgovernance,aswellassocialandenvironmentalmanagement,arecritical.

COOKISLANDS

TheCookIslandscomprises15smallislandsandisdividedintotwogroups:thenortherngroupbeinglow-lyingatolls,andthesoutherngroupcomposedofvolcanicislandswithlow-lyingcoastalareasandshallowlagoons.Thecountry’stopographyandremotenessmakeithighlyvulnerabletotheimpactsofclimatechange.Disastersincludeweatherextremessuchascyclonesandcoastalflooding,excessiverainfall,landslides,anddroughts,allexacerbatedbyclimatechangeandsealevelrise.Theimpactofdisastereventsongrossdomesticproduct(GDP)canbestaggeringlyhigh,offsettingdevelopmentgains.In2010,TropicalCyclonePataffected12%ofthecountry’stotalpopulation(78%ofthepopulationontheaffectedisland)andrequiredrecoverycostsequivalentto3%ofGDP(Figure1).ThePacificCatastropheRiskAssessmentandFinancingInitiativeindicatesthataverageannuallossesfromtropicalcyclones,earthquakes,and

tsunamisareequivalentto2%ofGDPintheCookIslands.Probablemaximumlossesforaneventoccurringoncein50yearsareestimatedat$56.8millionfortheCookIslands(PCRAFI;ADB2024c).

Figure1:CookIslandsGrowthandFiscalOutcomes

20 10 0(10)(20)(30)(40)

February2005:CyclonePercy

February2010:CyclonePat

March2020-January2022:COVID-19

pandemic

FY2005FY2007FY2009FY2011FY2013FY2015FY2017FY2019FY2021FY2023

GDPgrowth(%)Fiscalbalance(%ofGDP)

()=negative,COVID-19=coronavirusdisease,FY=fiscalyear,GDP=grossdomesticproduct.

Note:ThefiscalyearoftheGovernmentoftheCookIslandsendson30June.

Sources:AsianDevelopmentBank.AsianDevelopmentOutlookdatabase(accessedJune2024);andCentreforResearchontheEpidemiologyofDisasters.

TheInternationalDisasterDatabase

(accessedJuly2024).

Borderclosuresarisingfromthecoronavirusdisease(COVID-19)pandemiccausedtheCookIslands’tourism-dependenteconomytocontractby15.7%infiscalyear(FY)2020(ended30June2020forallthreeeconomiesdiscussedinthiswrite-up)and25.5%inFY2021,thelargestcontractionsinthePacificsubregionduringtheperiod.Strategiestogrowtheeconomyandbuildpeople’sresiliencetoclimatechangeanddisastershavebeenattheforefrontoftheCookIslandsdevelopmentagenda.

TomitigatetheserisksandstrengthentheresilienceoftheCookIslandstoclimatechange,thegovernment—withsupportfromitsdevelopmentpartners—spearheadedpolicyinitiativesinthefollowingareas:

(i)Establishalegalframeworktoguideclimatechangeinterventions.InlinewithTeKaveigaNui—NationalSustainableDevelopmentPlan—andtheCookIslandsEconomicDevelopmentStrategy,thegovernmentdrafteditsfirstNationalCookIslandsClimateChangeResponseBill.ThebillbuildsontheClimateChangePolicy2018–2028,providingaconsolidatedapproachtoreducingnationalvulnerabilityandbuildingclimatechangeresilience.Theframeworkandpolicydocumentsfacilitatedthegovernanceandinstitutionalarrangementsforclimatechangeinitiatives.Withsupport

fromtheCrownCounsel,theOfficeofthePrimeMinisterleadsthepolicyside;theMinistryofFinanceandEconomicManagementleadsthecoordinationofpublicinvestment;andInfrastructureCookIslandsandtheNationalEnvironmentServicesoverseeinfrastructureprojectsandsafeguardduediligence.TheCookIslandsalsoprepareddisease-specificresponseandrecoveryplans,suchastheEmergencyResponsePlaninCookIslands.

(ii)EstablishaSovereignWealthFund(SWF).LessonsfromtheCOVID-19pandemicunderscoredtheimportancefortheCookIslandstobuildfinancialassetstomitigateexternalshocks.ThiscallsformultiplesourcesofincomeandthecreationofbufferstosustainCookIslandsoperationsandthewell-beingofthepeopleduringtimesofcrisis.PriortoCOVID-19,theCookIslandshadastabilizationfundworthaboutNZ$50million(equivalentto2monthsofgovernmentoperations).Thiswasexhaustedduringthepandemic,andwiththerecoveryoftheeconomy,ithasslowlybeenbuiltbackup.Asof1July2024,thebalancewasequivalentto3months’worthofoperations.Towithstandanyfutureexternalshocks,thegovernmentisestablishingthenation’sfirstSWF.Unlikeitsstabilizationfund,theSWFwouldenablethegovernmenttobuildthisfinancialassetnotonlyfromtaxreceipts,butalsogainsfromfishinglicenses,seabedmining,andcontributionsfromdevelopmentpartnersandothersources,todirectlysupportitsaspirationsandbuilduptheamounttoprovideasafetynetfortheCookIslands.Thisinitiativedrawsontheexperiencesofotherislandnationfunds,mainlyKiribati,Nauru,andTuvalu.

(iii)Investincriticalinfrastructure.Asidefromtourism,infrastructuredriveseconomicgrowthintheCookIslands.TheCookIslandsNationalInfrastructureInvestmentInfrastructurePlan(2021)providestheframeworkandprioritizationplanforinfrastructureinvestments.Giventhecapacityconstraints,infrastructureprojectsonwaterandsanitation,energy,andhealthwillservenotonlythedomesticeconomybutalsothecriticaltourismsector.

(iv)SupportPublicFinancialManagement(PFM)reforms.ThegovernmenthasalsospearheadedseveralPFMreforms,includingdigitalizingitstaxadministrationfunctionsandstrengtheningitsmedium-termfiscalplanninganddebtmanagement,aswellasprocurementandfinancialmanagement,whicharecriticalforfacilitatingservicedelivery.Thesereformsremaincrucialandongoingdevelopmentpartners'financialandtechnicaladvicewillensuretheyalignwithinternationalbestpractices.Digitizingthesereformswillsustaingovernmentoperationsduringdisasters.

(v)Buildanagilepublicservice.Theislandnationhasanacutelaborshortageissue.CookIslandersareNewZealandpassportholders.Hence,thetendencytomovetoNewZealandandAustraliaforworkiscommonandcanimpedethegovernment’sabilitytodeliverservicestothepublic.Inrecognitionofthis,thegovernment(withsupportfromdevelopmentpartners)conductedafunctionalreviewin2023.Thereviewemphasizedtheneedtorealignsimilarfunctionstoreduceduplicationandsupportefficiencyingovernmentservicestothepublic—forinstance,mergingclimate-relatedfunctionsandlegalandinformationand

CountryEconomicIssues7

communicationtechnologyservices.ThisexercisewillpositiontheCookIslands’publicworkforcetomeetcurrentandfuturechallengesandemergencies.

SAMOA

DisastersandhealthemergencieshavehadasignificantimpactontheSamoaneconomy.TropicalCycloneEvaninDecember2012causedlossesequivalentto28%ofSamoa’s