News

Despite having few or no coronavirus infections, Pacific island nations have not been immune to the economic devastation of the pandemic, leading to a jostling for power as Australia and the US contend with China for regional influence. By Nic Maclellan.

Pacific islands take economic hit

As fruit ripens in Australian vineyards and orchards, growers are desperate for pickers. With the departure of tens of thousands of backpackers because of Covid-19, the expansion of Pacific seasonal work programs may provide a crucial harvest workforce for Australian farmers – and a vital source of employment in the islands, which have been economically ravaged by the pandemic.

At the start of the pandemic, the closure of international borders disrupted labour mobility schemes, including Australia’s Seasonal Worker Program and Pacific Labour Scheme. Now, member countries of the Pacific Islands Forum are negotiating Covid-safe pathways for more fruit-picking workers to travel from Fiji, Vanuatu, Tonga and other nations. Last week, national cabinet confirmed that 1500 seasonal workers from the Pacific would be quarantined in Tasmania for two weeks before being transferred to Victoria for the harvest.

While the Pacific islands are often viewed by Australians as a bloc, the pandemic has played out very differently across the region. By closing borders, drawing on local and international support and mobilising local culture and capacity, some island states have reported no confirmed cases of the virus. After controlling initial community transmission, others have avoided the catastrophe seen in Europe, the United States and many larger developing nations.

However, across the Pacific, the economic impact of reduced international flights, disrupted supply lines and a collapse of tourism has been significant. According to a World Bank report released last week, jobs in Vanuatu’s tourism sector shrank by about 64 per cent during the crisis; in Papua New Guinea, job ads contracted by 76 per cent from February to May 2020. “Youth and women,” the bank warned, “have been disproportionately affected, exacerbating existing inequalities in the world of work.”

The first reported cases of Covid-19 in the islands came on March 6, 2020, as a cruise ship passenger returning to Hawaii tested positive for the virus. On the same day, French Polynesia’s representative to the French national assembly, Maina Sage, returned home from Paris infected with the virus. Within days, Sage was quarantined in her home in Tahiti. The first coronavirus-related death in the Pacific was announced in the US territory of Guam on March 22.

With lingering memories of the post-World War I influenza pandemic and more contemporary outbreaks of infectious disease, most Pacific governments quickly banned cruise ships and closed borders to international travellers.

Due to this prompt action, and the advantage of distance, many smaller countries have reported no cases of infection since then, including the Cook Islands, Kiribati, Nauru, Niue, Palau, Tonga and Tuvalu. Samoa has reported just two cases and Vanuatu one, all found at the border. Given countries sending seasonal workers are mostly free of Covid-19, there is little if any risk to Australia of new outbreaks.

In contrast, the greater number of confirmed cases of Covid-19 in the Pacific occurred in French Polynesia, Guam and Hawaii – all American and French colonial dependencies that do not fully control their borders. French Polynesia had just four cases across May, June and July last year, but when France re-opened its borders on July 15, so did Tahiti. A surge of infected tourists and returning citizens led to a massive rise in cases across French Polynesia. As of Wednesday, there were 17,961 people confirmed with the virus and 131 deaths – a huge cost for a territory of just 280,000 people.

Pacific governments soon faced the challenge of strengthening health systems and responding to the economic transformation caused by the global health crisis. Throughout the year, island leaders highlighted the triple challenge to the Pacific: the stress on medical services for populations with high levels of obesity and diabetes; the loss of employment, overseas remittances and taxation; and above all, the continuing climate emergency, symbolised by two category 5 cyclones that hit Fiji in April and December.

The 18-member Pacific Islands Forum reached out to donors, while the Pacific Community – the lead regional agency for public health – worked with the World Health Organization to provide equipment, training and support to national governments. Last April, the forum’s foreign ministers agreed to establish a Pacific Humanitarian Pathway on Covid-19, to co-ordinate safe transport of crucial medical supplies, testing kits and personal protective equipment.

By May, Australia had adapted its overseas aid program into the Partnerships for Recovery framework. The Morrison government provided $100 million of crisis funding to help Pacific governments maintain public services, and set up a $304.7 million Covid-19 response package for the region.

As in Australia, island governments rolled out significant stimulus and welfare packages, at the cost of adding to national debt. They then turned to the Asian Development Bank and China’s Asian Infrastructure Investment Bank for support, with China issuing loans worth $US20 million to the Cook Islands and $US50 million to Fiji, along with $US12 million in budget support to Vanuatu.

Key industries – tourism, agriculture, fisheries and more – were forced to adapt or collapse. A December survey by Pacific Trade Invest showed 89 per cent of businesses across the region reported a negative impact and decline in revenue due to Covid-19, with 22 per cent lacking confidence that their business would survive the crisis. In Palau, Cook Islands, Vanuatu, French Polynesia and Fiji, countries where more than 40 per cent of GDP came from tourism, the sector shed thousands of waged jobs, also affecting the women who make handicrafts, the minibus drivers who ferry tourists around the island and the organic farmers who supply restaurants and hotels.

Despite this, tough times led to innovative responses. Barter networks sprang up for those without cash, shifting from export crops to local markets, with people returning to the village to work on family gardens. For many years, Pacific farmers’ associations have been preparing for natural disasters, and the pandemic response drew on this experience, tapping local expertise in agroforestry, permaculture and the use of traditional crops for better nutrition.

In many sectors, industry leaders sought to turn the disruption into an opportunity for restructuring. With urban populations unable to travel overseas, tourism bureaus promoted local ecotourism in rural areas. In an interview with the Australian National University’s Asia-Pacific college, fisheries expert Transform Aqorau said: “While Covid-19 has created many challenges, there are also some opportunities to reset and redirect the tuna industry, by phasing out foreign involvement and putting the industry in the hands of Pacific islands’ nationals and governments.”

During this complex year, the challenges facing Pacific island governments and communities were overlaid by heightened geopolitical tension. The US sought to rally allies such as Australia, New Zealand, Japan, France and India in an effort to contain China’s economic influence in the islands region.

Both China and the Western allies have sought to use the crisis to extend their partnerships with island nations. However, most independent countries of the Pacific Islands Forum are reluctant to choose sides in this sharpening crisis, seeking to maintain their foreign policy of “friends to all, enemies to none”. Even as the Australian Defence Force was quickly mobilised to transport supplies in the early days of the pandemic, the first shipment through the Pacific Humanitarian Pathway came from the Chinese foundation headed by Alibaba founder Jack Ma.

This geopolitical jousting between China, Australia and the new Biden administration is likely to continue in coming months, as coronavirus vaccines are rolled out. Last October, the secretary-general of the Pacific Islands Forum, Dame Meg Taylor, diplomatically noted that the ANZUS allies are not the only potential source for vaccines, stating that island leaders “will be emphasising that we get our fair share of the vaccines and this is not just through Australia and New Zealand. If there are opportunities for vaccines from elsewhere that have been cleared, I know there is some of our countries that are working with different groupings to ensure that those vaccines will be available.”

China has already declared that Chinese-made vaccines will be provided to developing countries on a priority basis. The race for regional influence continues.

This article was first published in the print edition of The Saturday Paper on Jan 30, 2021 as "Shuttered islands".

A free press is one you pay for. In the short term, the economic fallout from coronavirus has taken about a third of our revenue. We will survive this crisis, but we need the support of readers. Now is the time to subscribe.

Nic Maclellan is a correspondent for the Fijian magazine Islands Business. He was awarded the Walkley Foundation Sean Dorney Grant for Pacific Journalism in 2020.