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Pacific leaders reject World Bank, NZ push to free up trade

Bill English [1]

Finance Minister Bill English … outvoted by “sustainable development” vision. Image: NZ Parliament

Pacific Scoop:
Report – By Michael Sergel and Finian Scott

Pacific leaders have overwhelmingly rejected a push from the World Bank and New Zealand to free up trade and loosen regulations in the region.

About 60 delegates from 18 countries heard World Bank economist Tim Bulman [2] and New Zealand Finance Minister Bill English argue for higher economic growth and smaller governments, during the Pacific Parliamentary and Political Leaders Forum in Wellington this weekend.

But a majority of the leaders – representing governments, oppositions and NGOs – have committed themselves to sustainable development over economic growth and to sound and balanced governance over more severe austerity measures.

APJlogo72_icon [3]English said New Zealand was a “cork bobbing on the ocean of the global economy, buffeted by its waves” and much smaller Pacific economies were buffeted by “much more intense” economic waves.

“We have a better understanding of the challenges that you are grappling with leaders in your economies than almost any other country- and there’s no point in us feeling like we’re doing well if the 6 million people in our sort of near part of the Pacific aren’t doing well.”

Economist Bulman told leaders that an “enabling environment for business” in Pacific economies was “critical” to regional economic success, and Cook Islands businessman Tata Crocoombe argued for sustainably-sized governments that were properly equipped to deal with the effects of globalisation.

But delegates raised serious concerns about the volatility of world markets, the threat to culture and traditions and the protection of natural resource wealth – and refused to make specific commitments to a smaller public sector.

Foreign investment
Bulman said “enabling business” was important to broadening the tax base, improving public services, increasing jobs and improving conditions, and attracting new foreign investment.

He called for greater exploitation of minerals, agriculture, sustainable fisheries and the Asian tourism market – as well as long-term economic policymaking, more investment in education and healthcare, and the removal of foreign investment barriers.

“Neoliberalisation has brought signficant benefits, but regulation is still needed. It’s just a matter of the right regulation,” he said.

But for Gary Juffa – the Governor of Papua New Guinea’s Oro province and one of the region’s most outspoken critics of free trade – neoliberalism is a hard pill to swallow.

He said that “a few selfish and greedy people” had caused the financial crisis, and those pushing free trade in the Pacific came from wealthy protected economies in the west.

“Every time the Pacific rises up to say something, Western countries say we give you aid, and we become spectators in our own land,” he said.

“We cannot let Western countries pull wool over our eyes – and Australia and New Zealand produce the finest wool in the world.

‘Waiting for crumbs’
“I believe that if the Pacific is to benefit from its own resources – rather than waiting under the table for the crumbs of its resources – it must be able to rise up and stop being too ‘pacific’. We have been the friendly islands for too long.”

Juffa told Pacific Scoop that the free trade mantra of removing tariffs and regulations, and taxing the purchases of the people, would make Pacific governments and people poorer.

“The people of the Pacific live on their own land – they are self-sustaining already. If you impose free trade, you are going to take away the opportunities they have to be truly economically independent,” he said.

“Free trade proposes to also relax labour laws and migration laws – which means people from more developed nations can bring in their companies and operate in those small economies. The companies in those economies will not be able to compete with those large companies.”

Juffa says he has no time for “ridiculous trade agreements” and the results of any trade negotiations “must benefit the Pacific Islands” rather than making them poorer.

Fji National Council of Women general secretary Fay Volatuba said that any trade agreements needed to protect labour and culture.

“Firstly, we don’t have anything to offer except our labour. Make trade agreements that will be positive for our people,” Volatuba said.

Cultural identity
“Secondly, please do not short-sell our cultural identity. That is all that we have left. For us in Fiji, right now, to have the Great Council of Chiefs and all our traditional things taken away from us is something we cry over.”

Vanuatu Lands Minister Ralph Regenvanu – a self-confessed “notorious critic of the World Trade Organisation and so-called free trade agreements” who voted against Vanuatu joining the WTO – did not address proposed plan of action during the forum.

However, he told Pacific Scoop that free trade would not work for his country.

“We have been trading for a long time, for thousands of years. Trading is something we are quite familiar with,” he said.

“But in terms of industry and meeting the daily demands of our population, we need to be very careful that we maintain control over what we produce and what we consume, and free trade doesn’t support that.”

Samoan cabinet minister Fiame Naomi Mata’afa said the current global economic system “was still the same system” that had failed the Pacific and many other parts of the world during the recent financial crisis.

And Guam Republican Minority Whip Thomson Morrison told the forum that his country was no longer able to be self-sufficient like it once was.

Import-dependent
“We are now dependent on imports and at the mercy of world economic powers and multinational corporations,” he said.

He explained that “if Japan sneezes, Guam catches a cold” and Pacific nations needed to be more self-sufficient and less susceptible to volatile Asian markets.

New Zealand Green MP Kennedy Graham challenged Haque on the World Bank’s commitment to economic growth even when it undermined efforts to fight climate change.

He later told Pacific Scoop that he was not convinced the economic growth paradigm was compatible with real action on climate change and resource sustainability.

English argued that the Pacific should choose a balanced path of growth and sustainability – and said State-Owned Enterprises were “not a bad balance between financial discipline and people maintaining a sense of ownership over assets”.

He reminded delegates that he was committed to the Pacific, and urged leaders to petition Australia for greater support of their economic plans.

“Any influence you can exert on the Australian part of the discussion about economic sustainability in the Pacific will certainly help.”

The Pacific Parliamentary and Political Leaders Forum ended yesterday.

Michael Sergel [4]and Finian Scott [5] are Postgraduate Diploma in Communication Studies student journalists at AUT University. They are covering the Pacific politics forum for Pacific Scoop and the Pacific Media Centre [6] as an Asia-Pacific Journalism assignment. Read their live blog: