Further to the recent calls by some within Australia to expand the number of horticulture/agriculture places available in the Seasonal Workers’ Program, there is also a need to look at how the hospitality component of this program can be utilised to provide a safety net for those who face losing their jobs or becoming under-employed within the tourism industry.

The impacts of Cyclone Pam will affect the hospitality industry significantly, particularly in SHEFA province (centred on Port Vila) and TAFEA province (predominantly Tanna, where one experienced operator has predicted an 80% contraction during 2015). Although the industry is working to promote the destination, including by encouraging visitors to rebook for Santo and Malekula, which have been largely unaffected by the storm, there have already been cancellations and more can be expected. This exacerbates a pre-existing lack of confidence within the sector reflecting forward bookings that were significantly lower than have been experienced in recent years.

Information from within the industry is still coming to hand. However, a number of the larger properties are yet to confirm when they will reopen. These are the properties that provide the bulk of employment within the sector.

The problem

The tourism industry constitutes the most significant part of the formal economy in relation to jobs. A survey of tourism businesses conducted in 2007/08 established that there were 3,300 full-time equivalent jobs and 1,400 part-time jobs in the industry and we should expect that number to have grown given the expansion in the industry since then. If staff are laid off or moved to part-time work there is no absorption capacity elsewhere in the industry and unlikely to be any for some time. Given the geographical extent of the impact of Cyclone Pam there is limited opportunity for people who are laid off in Port Vila to return to their home islands given what we know about food security issues, lack of income-earning opportunities and the need to rebuild homes in outlying and rural areas.

There are risks associated with social cohesion and urban resilience associated with even medium scale job losses plus if people lose access to income earning opportunities they are less able to support immediate and extended family networks, many of which have additional and possibly urgent needs at this time.

How can Australia help?

There are 2 ways in which the government of Australia can respond to this issue to support Vanuatu in the short to medium term:

1.         Expansion of the Seasonal Worker Program’s hospitality componentThe Seasonal Worker Program (SWP) can be expanded by a set number of positions that are reserved specifically for workers from Vanuatu. The SWP already has a hospitality component and given the background to this (see above) it is appropriate that the quota be increased in this sector. This proposal should be seen as additional to the proposal to expand the number of places in horticulture and agriculture.

This will require a ‘Whole of Government’ response with particular focus on addressing the demand side constraints as identified in recent research undertaken by the World Bank and the Development Policy Centre. In addition, steps should be taken to ensure that any additional transaction costs arising are not borne by the Government of Vanuatu or Vanuatu-based agencies and businesses that need to be part of the process. As we know, the government of New Zealand has responded to the impact of Cyclone Pam on Vanuatu by waiving visa fees for ni-Vanuatu workers travelling there as part of the Recognised Seasonal Employment (RSE) program. This is an example that Australia could look to follow.

This approach would fit very well with the commitment expressed by Foreign Minister Bishop to address and remove these bottlenecks as a matter of priority for further developing the SWP.

We have seen that there is appetite for people to take up opportunities such as this with reference to a number of groups having departed since the passage of Cyclone Pam to participate in both the SWP and its counterpart in New Zealand. However, the fact that the SWP already includes a hospitality component makes it particularly suitable to provide an additional solution of this type that specifically addresses the impacts on those employed in the tourism industry.

2. Influence Carnival to increase the quota of jobs made available to ni-Vanuatu workers on their cruise ships and work with Carnival to ensure that the revised quota is filled.

Foreign Minister Bishop has made many references to the development partnership between her government and Carnival Cruises as a flagship for her new aid paradigm that prioritises the role of the private sector in promoting economic growth in the Pacific island region. She cited this agreement with great approval during her joint press conference with the Hon Joe Natuman, Prime Minister of Vanuatu in Port Vila on Sunday 22nd March.

In exchange for a reduction in tying-up fees at the wharf in Port Vila, Carnival undertook to employ ni-Vanuatu people on ships that operate in the Pacific island region. In 2014, there were 120 people employed under this arrangement. The Government of Australia can utilise its very positive relationship with Carnival via the development agreement to have this quota increased and ensure that demand-side constraints and additional transaction costs are met without placing any extra burden on the Government of Vanuatu and Vanuatu-based agencies and businesses that need to be part of this process.

Why is this good for Vanuatu?

  • It provides a safety net for those whose employment status is likely to be affected by closures or scale-down (whether temporary or otherwise) in the tourism sector.
  • It provides opportunities for ni-Vanuatu people to earn money to support recovery and rebuilding efforts within their families and communities, thus preserving resilience and self-reliance.
  • It allows those with hospitality/tourism experience to preserve and enhance industry-related skills in anticipation of returning to the industry within Vanuatu when tourism begins to recover.

Why is this good for Australia?

  • It allows the government of Australia to be a ‘first responder’ in terms of short/medium term inputs to build on the immediate humanitarian response effort already provided.
  • It allows the government of Australia to demonstrate that its pre-existing investments can be made to respond innovatively and nimbly to address development needs without having to invent something new.
  • It fits with the government of Australia’s aid paradigm with its focus on promoting economic growth and working with private sector partners.

It is important to be aware of the longer term risks associated with increasing places in seasonal migration schemes. In a forthcoming paper, Luke Craven has pointed to the danger of communities becoming dependent on access to such schemes, even though they are by their nature demand-led and therefore may be an insecure revenue stream in the long term. Whilst out-migration can bring economic benefits, there is a need to address associated risks of increased vulnerability within sending communities in order for schemes of this type to achieve their full development potential.

My recommendation for the proposals I have put forward here to meet adverse employment impacts in the tourism industry is that they be time-bound in nature. It is anticipated that the fact that they are focused on tourism-focused jobs means that there will be an in-built time-bound aspect as people can be expected to return to jobs at home once they become available.

 

About Tess Newton Cain

With more than 20 years’ experience of living and working in the Pacific, I understand its needs, local customs, issues and challenges, and have built strong networks and productive relationships with policy makers, opinion formers, key institutions, private sector operators and development partners. If you are a development agency or NGO needing more and better information about the Pacific context for your work or a business looking to enter a new and unfamiliar Pacific market, I can provide you with the research, analysis and strategy you will need.

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