Reclaiming Pacific Island Regionalism: Does Neoliberalism Have to Reign by C. Slatter and Y. Underhill-Sem

1. Reclaiming Pacific Island Regionalism: Does Neoliberalism Have to Reign?byC. Slatter and Y. Underhill-Sem Comments by Mahendra Reddy College of Business, Hospitality and Tourism Studies, Fiji National University.

2. Introduction Regionalism is an ideology that focuses on the interests of a particular region or group of regions, whether traditional or formal. This paper demonstrates this aspects by providing a history of how regionalism is not a new concept but has been in practice in the region for decades. The authors very ably quote the 1993 seminal work of late Prof Hau�ofa (Our Sea of Islands).

3. Introduction cont.. The authors also quote a 1949 piece in Christian Science Monitor by Albert Norman, European Observer who noted that colonisation of the region imposed political barriers which has indirectly disintegrated the invisible linkages and connectedness amongsts the Pacific Society.

4. The Old Regionalism There was limited trade amongst the Pacific communities; There has been sub-regions within the larger Pacific community, the Micronesians, the Melanesians and the Polynesians. Regionalism within these clusters were enhanced by similar music, culture and traditions, food consumption and lifestyle.

5. Pacific Community and Region Has Grown

6. Why Has the Region Grown Authors argue that it is top driven, the advent of Neoliberalism. I argue that it is more than that.

7. Neoliberalism Ideology and Changing Face of Pacific Region The authors argue: that economic ideology has changed in the Pacific; The ideology has been externally driven; The ideological basis for economic decision making is the cause for economic woes in the Pacific

8. Neoliberalism Ideology and Changing Face of Pacific Region cont� I argue: that economic ideology has changed in the Pacific; Yes The ideology has been externally driven; Yes The ideological basis for economic decision making is the cause for economic woes in the Pacific; Not really

9. Changing Economic Ideology Yes �Capitalism has been the ideological orientation since the colonisation. However, it was gradually embraced by the Pacific community

10. Origins of Economic Ideology Yes but why As population grew while land resource remained constant, the need for surplus creation arose; As every household started to create surplus, the capitalist ideology became the national ideology; Then local government started to send its people to get educated in the western world to further the capitalist ideology.

11. Is the Ideological Basis Cause of Economic Woes? Not really Surplus creation worked well; Surplus creation was supposed to: Make the economy grow; The benefits from the growing to be re-distributed;

12. Governance Problems However, the countries got plagued with governance problems; Corruption and rent seeking rife; Disruptions in macroeconomic policy making Disruption in national governance This led to: Low growth Worsening social problems

13. Is it a Ideological Problem ?

14. Washington Consensus In their May 1997 issue of the World Economic Outlook, the International Monetary Fund provided a �new Washington consensus� that sought to summarize the state of play by arguing that: A key lesson seems to be that the pressures of globalization, especially in the past decade or so, have served to accentuate the benefits of good policies and the costs of bad policies. Countries that align themselves with the forces of globalization and embrace the reforms needed to do so, liberalizing markets and pursuing disciplined macroeconomic policies, are likely to put themselves on a path of convergence with the advanced economies, following the successful Asian newly industrialized economies. These countries may expect to benefit from trade, gain global market share, and be increasingly rewarded with larger private capital flows. Countries that do not adopt such polices are likely to face declining shares of world trade and private capital flows, and to find themselves behind in relative terms (IMF, 1997:72).

15. Assumes Away a Number of Key PIC Economic Features However, the Washington Consensus fails to paint an accurate picture of the situation; It assumed: that the necessary institutions for the policies that they advocate to be effective, both private and public; The institutions are in place and that they are operating effectively. The general population are educated to understand the importance of the new economic order; How to deal with information assymetries; How to deal with imperfect markets; How to deal with negative externalities; That factors of production were free to move to productive areas; That cultural and tradition did not create any impediment for business operation; That culture and tradition was not an impediment for people to raise concern about abnormal behaviour.

16. Is Ideology a Problem No It is timing and sequencing

17. Consequence of Low and Slow Growth People have migrated to live elsewhere; People have temporarily migrated to supplement household income back home; Rugby players; Military and Police Officers serving on peace keeping missions abroad; People are going overseas to perform in concerts and musical shows; Sea fearers

18. Consequence of Low and Slow Growth cont� People are leasing land for commercial development and thus an income source; Tourism projects; Pearl farming; Fishing rights on qoliqoli areas; Top class residential lots;

19. Pacific Community Outside the Pacific! Same taste and preferences People are exporting primary products to them; People are receiving remittances from them; People go for holidays to their places

20. Pacific Community outside Pacific: Props up Pacific Economy Globalisation has: Made tourism industry prosper and thus the economy; Unlike other industries, this industry infiltrates the rural and costal community who other wise are forgotten; Made money transfer easier; Made money transfer reach not just the urban elites but the rural dwellers as well; ANZ rural Banking programme started in 2004 with 72 clients and a total deposit of $4230. In June 2008, the total deposit was $5,004991.00 with 62257 clients. Provided opportunities for the rural agrarian communities;

21. So why Social Indicators Say Otherwise? Globalisation and market economy rewards the owners of factors of production Who are they? People who have access to land (higher returns to land); People who are educated and skilled (higher wages and salaries) People who have access to capital (higher interest rates)

22. How to Address Social Woes of Those not Addressed by Globalization Not to derail globalization but to: Strengthen, widen and deepen financial institutions which the poor can find accessible and affordable; Make land accessible to those willing to till; Make education, TVET training accessible and affordable to all;

23. Failure to do so While growth will occur, it will get concentrated in the hands of the few hence growing disparity and inequality. Increasing social problems. Ideology is not the problem = it�s the lack of the fundamentals.

24. Regional Initiatives Can Help Regional approaches have the potential to provide at least part of the solution in a number of areas: governance areas training and education; Market access; Capital sourcing; Enhancing labour mobility schemes; Free trade areas to reduce final product costs;

25. Dhanyavad and Vinaka!