The Pacific region is in a recession


No country should be placed in a situation of choosing between rebuilding its economy and servicing its debt obligations.

This is according to Prime Minister Fiame Naomi Mata’afa when she addressed the UN General Assembly last Saturday in New York.

“The March 2021 IMF report noted that SIDS simply cannot support their SDGs and fund their core needs on their own under the prevailing conditions of economic contraction. Tourism may never return to pre-COVID-19 levels.

“Aviation services will be slow to recover, and one casualty of the pandemic, in our case, was the recent demise of our national airline, Samoa Airways.

“Many Pacific Island countries rely on remittances from diasporas and communities. Apart from being an important source of income for families and foreign exchange reserves for governments, remittances are an important buffer in periods of economic shocks and natural disasters.

“Yet the cost of sending remittances to the Pacific is over 10% which is higher than the global average and 7% higher than the target set by the SDGs.”

According to the 2021 IMF Report, the Pacific region is in a recession.

“Income, demand for regional exports, and tourism receipts have all recorded reductions whilst public spending continues on an upward trajectory.

The projected outcome is a greater risk of debt distress. “It is also the case that most of the Pacific debts are with multilateral agencies.

Whilst the adoption of austerity measures is an option, there is also the real possibility that this may worsen poverty and undermine economic recovery.”

Fiame said multilateralism and united international cooperation are our best response to the many threats we face and building resilience at the national level can only take us so far.

“Samoa is confident that despite all the challenges, even existential threats for some of us; there is still hope if there is Unity amongst our UN family. We need to change our world for the better and leave hope for our future generations.”