Hon Phil Goff
Minister of Foreign Affairs and Trade
Media Statement

23 February 2004

Challenges and responses for the Pacific

Opening speech

Conference on the Political Economy of Small Islands in the 21st Century

Victoria University Law School

Wellington

Tena koutou katoa, and good morning. Thank you for the invitation to be here today to open this conference.

My special thanks to Geoff Bertram for putting together a challenging programme. I welcome the opportunity this conference affords to further academic research and debate in New Zealand on the Pacific.

New Zealand is a Pacific nation – through our geography, our culture and our outlook. We have an extensive inter-dependence with the region through significant trade and people-to-people links, and the growing part that Pacific Islands people play in New Zealand’s national identity.

I was particularly pleased last year to officially launch the Pacific Cooperation Foundation. One aspect of the Foundation’s role is to promote academic excellence in Pacific studies. The Foundation will establish a network linking the multitude of New Zealand interests in the Pacific, to encourage greater discussion and cooperation. It will enable us as a nation to respond more effectively with better understanding to regional issues.

It is timely that this conference is being hosted by New Zealand while we are chair of the Pacific Islands Forum. The Forum is the only regional grouping with the scope and political mandate to consider the big questions facing our part of the world, propose high-level answers and represent them to the outside world.

I am told this conference has been organised to mark the approaching 20th anniversary of the publication of “The MIRAB Economy in South Pacific Microstates” in Pacific Viewpoint, September 1985. The concept of a MIRAB economy "depending heavily on migration, remittances, aid and bureaucracy" triggered a significant literature in island studies. While there has been much debate as to how appropriate or accurate the model may be, two decades on it is worthwhile to take stock of how far we have come.

In my comments I would like to touch on three broad areas – first the challenges my government sees in the Pacific and our response, second developments in New Zealand aid policy, and finally to touch upon the Forum review – an important effort to shape regional cooperation over the next decade.

Current challenges

The region’s most fundamental challenge is its geography – the generally small size of its island states; their isolation, small populations and limited economic resources result in a high level of vulnerability, not just environmentally, but also economically and socially.

The recent cyclone devastation of Niue, the huge economic impact on Samoa from the arrival of taro blight in the mid 1990s, and the on-going debate over the viable population threshold of steadily de-populating islands in the northern Cooks Islands and Niue are but a few current examples of the breadth and depth of this vulnerability. Ironically, it is their enjoyment of New Zealand citizenship and access to migration that contributes to this depopulation. Lack of access to migration creates opposite problems – rapidly rising populations putting more pressure on limited resources.

Then there is the challenge of security. Distance no longer isolates small island states from the reach of international terrorist and trans-national organised crime. Organised crime is becoming more sophisticated. As well as the kind of situation that has arisen in the Solomon Islands, Pacific Island countries face international requirements to tighten up border security and law enforcement procedures (such as United Nations Security Council Resolution 1373). Compliance with these requirements is becoming a prerequisite to the continuing ability to trade.

Law enforcement agencies need to coordinate and constantly review their efforts as organised crime attempts to evade law enforcement systems and legislation. Compliance with counter terrorism frameworks will stretch the capacity of individual governments.

Security issues reflect global concerns in areas ranging from trans-national crime and terrorist threats to disease pandemics and natural disasters. Security issues have also increased as a result of break down of law and order, and ethnic conflict within states. Part of the response to the latter was regional agreements such as the Biketawa Declaration. There is still, however, a need for a more comprehensive regional approach.

Third is the challenge of governance. Good governance is an essential foundation stone to support and sustain development. There is a tension between encouraging change in the region in terms of good governance, and recognising the sovereignty of the individual countries.

Finally there is the challenge of globalisation – where the high rate of change, multi-national business, and pervasive western popular culture have placed strains on the culture and economies of several Pacific Island countries.

Destabilising influences associated with globalisation include international terrorism, drug running, illicit small arms, money laundering, people smuggling, trade in endangered species and identity fraud. We need to ensure, as other regions address these issues, that the Pacific is not seen as a soft touch.

In an era of globalisation, commercial interests will continue to seek disproportionate influence to gain monopolistic and cheap access to key resources; eg, fishing rights, minerals, land, and intellectual and cultural property rights. The region needs to make the most of its resources – there is a need to avoid entering into exploitive deals that strip out resources in unsustainable ways.

Globalisation presents a challenge to traditional culture. Culture and heritage issues are all about identity; about personal identity, community identity and national identity. In the Pacific, culture is the fabric of society and represents a rich and diverse source of creativity and innovation, but as elsewhere is being challenged by Western and American culture promoted through the media.

While there are many problems created by globalisation, there are also opportunities. Easier travel, instant communications and access to information need to be exploited to build stronger connections between island states and the rest of the world, to overcome the traditional problems of isolation and marginalisation, both economically and socially.

Overcoming the challenges and making the most of opportunities will, however, require utilising all people. This includes women, youth and civil society, and an openness on the part of governments to listen to their views.

New Zealand's pacific policy

New Zealand’s over-arching policy towards the Pacific region was revised and restated in 2001. The Pacific Policy Review points out that the Pacific is facing increasing stresses and that there are no easy solutions for any of the challenges faced by Pacific states.

We determined that our strategy had to be framed around long-term engagement with practical responses in the shorter-term to managing instability or threats arising from particular events (eg, peace monitoring in Solomon Islands).

In a nutshell, we concluded that the interests of New Zealand and Pacific people would be served best by a region where:
- New Zealand is a reliable friend that knows the Pacific well. While our Pacific Island people connections give us a unique advantage, that broader understanding of the region cannot be taken for granted. Pacific expertise and knowledge in our society need continually to be renewed;
- Ethnic or other tensions are managed through effective government structures;
- Threats to stability are contained through regional organisations and by other co-operative approaches;
- Collective interests, particularly fisheries, are pursued through co-operative regional action; and
- The unique character of the Pacific Islands and their development priorities is projected and supported internationally.

To achieve this, New Zealand must work closely with other countries that engage constructively in the Pacific Island region with a view to harmonising activities designed to promote good governance and sustainable economic development. The relationship with Australia will continue to be particularly important in this regard.

Any expansion of New Zealand’s trade and economic linkages with the Pacific should be through the development of rules-based regional trading arrangements capable of delivering benefits for the Pacific Island Countries (PICs) from greater global integration.

New Zealand should also provide continued support for regional institutions and their work programmes in areas such as regional security (eg, through the Biketawa Declaration), resource management including fisheries, environmental protection, health concerns and economic and social development.

There is also a need to continue to work to counter threats stemming from criminal activities such as money laundering, people and drug smuggling and financial scams, and placing greater emphasis on support for local law enforcement to underpin the maintenance of the principles and values of civil society.

New Zealand's aid policy

New Zealand has strong geographical, cultural, political and economic ties to Pacific developing nations. That and our small size in the world means that it makes sense for New Zealand to focus its development assistance in the Pacific.

Aid is not just a moral and international responsibility to assist those whose circumstances are worse than our own. Alleviating poverty internationally is critical to a more stable and secure world. New Zealand also benefits from the economic well-being of the Pacific states, which are a $1billion market for trade.

New Zealand has recently reviewed and reorganised its approach to international development assistance. This has included the establishment of the New Zealand Agency for International Development (NZAID), which is charged with implementing our aid policy and programmes. One of the central outcomes of the review was that the Pacific would remain the principal geographic focus of the New Zealand aid programme.

NZAID operates on the principle of partnership. This means cooperatively identifying partner country and agencies needs, and matching New Zealand’s capabilities and priorities to meeting those needs. NZAID’s focus is on poverty elimination, the promotion of basic education, basic health and good governance.

NZAID is also pursuing harmonised approaches to development assistance that recognise the fundamental requirement for donors to operate within a partner country’s own strategic development plan and in a process that has partner country ownership.

There is a growing understanding that sustainable development outcomes need more than just money and projects. They require partner ownership, sound strategies and coordination, including working within a country-led multi-donor framework.

Entering into partnerships and engaging in policy discussions are becoming an increasingly important part of New Zealand’s role as a development partner. These are seen as ‘development’ fundamentals’ to ensure we reduce the transactions costs of aid, secure greater impact for the aid dollar, and overall achieve better aid outcomes. New Zealand is committed to this way of working.

Key drivers for the work of NZAID include:

- Recognising that New Zealand is a small player in absolute dollar terms and seeking to focus on areas where New Zealand has the ability to leverage greater outcomes than might otherwise be possible;
- Noting the imperatives of the Millennium Development Goals are an important focus for programmes;
- Pursuing coherence between international development outcomes and New Zealand’s interests in such areas as foreign policy, trade, immigration, health, education, security and remittances;
- Ensuring New Zealand has standing as an active, credible and responsible member of the international community.

Forum Review process

At the Auckland Pacific Islands Forum meeting hosted by the Prime Minister in Auckland last year, Leaders agreed to undertake a wide-ranging Review of the Forum – the first such comprehensive review since the Forum met in Wellington in 1971.

The Review is a highly consultative process, right around the region, conducted by an Eminent Persons Group. To determine what the Forum should be doing requires consideration of the broad strategic and policy issues that the region is facing.

One fundamental question is what regional and international issues can be best addressed through regional cooperation and integration rather than national policy approaches. There is already effective regional cooperation on a wide range of issues – eg, fisheries, education, health, trade and security. But more needs to be done. This cooperation also needs to be better integrated with activities at the national and international levels.

Once we start to explore these issues further, even more difficult questions arise about the relationship between sovereignty and national sustainability. In this respect, tomorrow’s discussion of John Henderson’s paper “Has Free Association helped or hindered the development of small Pacific Island states” will be particularly interesting.

The Forum Review will shortly be presented to Leaders. The EPG and Reflection Group process has been constructive and I am confident that the review will present a positive vision, a clear strategy and important practical proposals to advance the effectiveness of the Forum and its secretariat.

Drawing some conclusions

It is clear that the Pacific is facing increasing stresses – both internal and external. There are no “quick fix” solutions for any of the challenges faced by Pacific states or small island states in general.

The answer does not lie simply in providing more trade, shipping, tourism or education. What has become evidently clear, however, is the centrality of good-governance to continued development, and the need for much greater regional cooperation and sharing of resources and further exploration of deeper integration. Deeper exploration of these two areas, will, naturally, also touch on issues around self-determination and harmonisation.

The increasing importance of governance and leadership development is a reflection of a number of factors, including an increased focus on the need for political transparency and openness, social justice, human rights and sound political and economic management.

At a more fundamental level, good governance inspires confidence at all levels; ie, nationally, regionally and internationally. Good governance is the foundation stone to support and sustain development itself.

We need to find cooperative solutions to the region’s challenges. The regional assistance mission to the Solomons is a positive example of regional cooperation to resolve internal problems that the country could not resolve for itself. Regional approaches in the areas of fisheries, education, health, trade and security are other examples to draw from and further develop.

There is naturally a tension between integrating resources and efforts and national sovereignty that needs to be worked through.

However if the 25 much larger countries of Europe accept the need for greater integration, and more slowly the countries of ASEAN are doing the same, then the rationale for small countries in the Pacific to work together and achieve economies of scale should be even more obvious.

Underpinning all of our efforts to support sustainable development in the small island states of the Pacific are the concepts of cooperation and harmonisation. Greater cooperation among the Pacific microstates and the need for donor harmonisation go hand in hand.

However the Pacific is a very diverse region, and our interactions with its people also need to be differentiated and locally appropriate. Our development models need, therefore, to be flexible. How much aid is needed is an open question but quality and partnership underpinning ownership are essential elements of long-term sustainability.

Aid should be seen as but one important element of a coherent foreign policy approach to the region, partnered by effective regional political and economic cooperation. Sharing of resources and capturing opportunities offers a better chance of avoiding marginalisation and reducing vulnerability.

Thank you for the opportunity to open this conference. I look forward to hearing the results of your discussions and wish you well for a productive and successful three days.

ENDS

All Phil Goff’s media releases and speeches are posted at www.beehive.govt.nz

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