ECONOMIC-DEVELOPMENT IN THE SOUTH-PACIFIC PROMOTING THE PRIVATE-SECTOR

Over the past decade the economies of the independent island states of the South Pacific have become sluggish to the point of stagnation. Despite substantial flows of overseas development assistance (ODA), national economic managers have in the past failed to adopt policies which ensured increasing prosperity. Apologists for the poor performance of the islands have suggested a wide range of constraints such as small size, but one of the major causes of slow growth has been the adoption by island governments of import substituting and domestic self-sufficiency policies. Instead of an outward looking private sector which had to fight and be efficient in the international marketplace, governments encouraged production for local needs behind tariff walls, and licensing frameworks which supported inefficiency and a lack of entrepreneurial spirit. The encouragement of the private sector requires the recognition by governments of industry needs. This paper reviews some recommendations put forward by researchers, scholars and business practitioners in this regard. These recommendations include proposals for: the adoption of macroeconomic policies which provide a stable economic environment; the encouragement of niche industries which reflect the skills and capacity to perform of small, isolated states; the adoption of suitable legislation and the recognition that apart from taxation incentives the private sector takes into account law and order, the availability of skilled or semi-skilled workers, common sense union practices and easy access to the incentives offered by governments.