This item was first published on the East Asia Forum on January 6th, 2017

Authored jointly with Matthew Dornan

2016 was a big year for Pacific politics. Vanuatu and Nauru held elections — each in the context of significant concerns about governance. Censorship, deportation of the chief justice and arrests of opposition MPs have led to a serious decline in the credibility of democracy in Nauru in recent years. In Vanuatu, the election this year followed 14 members of parliament having been jailed for corruption in 2015.

Fiji’s international profile reached new highs when it assumed the presidency of the UN General Assembly. But domestically there were concerns raised about detention of opposition figures, a sudden cabinet reshuffle and the impacts of retrospective land legislation.

New Caledonia experienced volatility as it approaches the conclusion of the Noumea Accords process, at which point the population will vote on independence from France.

Economic developments have generally been less exciting, with the exception of PNG where the collapse of commodity prices has contributed to a budget crisis. Pacific island countries recorded modest economic growth averaging almost 3 per cent in 2016 — an improvement on their 2015 performance. Growth rates were volatile in many states, and remittances, aid and income from tourism and fisheries were the most important sources of revenue.

Natural disasters again had significant economic impacts. A number of countries suffered serious droughts, with deaths from famine reported in PNG. In February, Cyclone Winston struck Fiji, causing damage valued at F$2.85 billion (approximately US$1.35 billion) — equivalent to almost 30 per cent of GDP. There were 43 lives were lost and 3360 houses were destroyed. The category four cyclone occurred less than one year after Cyclone Pam (a category five storm) hit Vanuatu, causing damage equivalent to 64 per cent of the country’s GDP.

Pacific island countries continued their prominent advocacy on climate change. The Pacific Small Island Developing States group was a key driver of the 1.5 degree warming target agreed at the COP 21 summit in Paris in late 2015. On the back of this agreement, Pacific island governments pushed in 2016 for the incorporation of ‘loss and damage’ into the international climate change architecture.

They also advocated for better access to adaptation funding — advocacy that led to donor support for accessing the Green Climate Fund (GCF), and which contributed to an innovative strategy that will see Pacific micro-states submit a joint funding proposal to the GCF. Next year, Fiji will co-chair the Conference of the Parties (COP 23) to the UN Framework Convention on Climate Change in Bonn in November, and will be co-president of the United Nations oceans conference in New York in June.

Tuna fisheries also featured prominently in 2016. The eight Pacific island members of the Parties to the Nauru Agreement — who collectively supply half the world’s skipjack tuna — continue to benefit from their establishment of a vessel day scheme, which is a cartel-like arrangement that has led to dramatic increases in revenue for PNA members. In 2016, licensing revenues received by PNA members were around US$400 million, compared to revenues in 2010 of US$64 million.

This success has influenced other agreements. The US-South Pacific Fisheries Treaty collapsed in February when Pacific island countries refused to continue providing US-flagged vessels with access to tuna at discounted prices. Pacific nations and the United States agreed upon a seven-year agreement to replace the existing treaty in December, which better reflects higher prices for accessing tuna fisheries. Pacific island countries also pushed back against proposals made at the Western and Central Pacific Fisheries Commission by the European Union and United States, which would have weakened the vessel day scheme.

Regionally, negotiations for the Pacific Agreement on Closer Economic Relations (PACER Plus) trade agreement between Pacific island countries and Australia and New Zealand proceeded with mixed success. Papua New Guinea announced in August that it would withdraw from the process, and Fiji made a similar statement before deciding to re-join negotiations. Concerns about infant industry protection and most-favoured nation status drove these decisions. This potentially leaves the two biggest island economies outside the treaty.

On a positive note, the expansion of labour mobility opportunities to Pacific islanders in Australia and New Zealand has generated significant goodwill in the region. Remittances were a key source of income for households affected by recent cyclones in both Fiji and Vanuatu.

Political tensions continue to affect regional cooperation in other areas. The dispute is ongoing between Fiji and the Pacific Islands Forum — the region’s pre-eminent political body — with Fiji’s leader maintaining his refusal to attend leaders’ meetings. Fijian Prime Minister Bainimarama has said he will attend meetings only when Australia and New Zealand withdraw from the Forum.

Instead, this year’s Forum Leaders’ meeting saw a decision to expand the group by granting full membership status to French Polynesia and New Caledonia — a move that appears to cement France as an established and future Pacific power, and reflects a shift (back) to security as the primary concern of the regional order. It remains to be seen what this will mean for the future of the Pacific Islands Forum, and for (currently lukewarm) Fijian relations with Australia and New Zealand.

Matthew Dornan (Twitter: @mattdornan) is Deputy Director of the Development Policy Centre, and Tess Newton Cain (Twitter: @CainTess) is a Visiting Fellow at the Development Policy Centre, The Australian National University.

This article is part of an EAF special feature series on 2016 in review and the year ahead.

 

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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