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An economic hurricane is hurtling towards the South Pacific
4:58 pm GMT+12, 30/03/2020, Australia

By Peter Hartcher
 

At first glance, it might look as if the South Pacific would be the last place on earth to have to worry about the new coronavirus. The palm-fringed paradises of the self-styled Blue Continent are far from the teeming cities of the world and their swarming sicknesses. Only some 10 million people live in countries scattered across an oceanic expanse as big as all of Asia, Europe, Australia and the US combined. Surely geography took care of the social distancing here?
 
Not only that. The South Pacific states were smart. They were quick to cut off all international arrivals to protect themselves from the pandemic. Not quite quick enough – 114 people across six of the region's countries so far have been confirmed to be infected with COVID-19 nonetheless, with one death. The number of new cases across the South Pacific rose by 5 per cent on Monday.
 
“Our best chance collectively is to isolate ourselves and break the chain of community transmission,” says Karena Lyons, director of research at the East-West Centre in Honolulu. “I know it was a big deal for my family in Samoa and New Zealand to refrain from going to church – but they did it and they started three weeks ago," says Lyons. "Thank goodness – it took a village to convince my mother.”
 
It may be the only chance. The most populous of the region's countries, the former Australian colony of Papua New Guinea, has more than 8 million people. And just 14 ventilators, according to an ANU expert, Stephen Howes.
 
Yet in spite of the South Pacific's speed to shut down, “it's nevertheless suffering terribly”, says Howes, a professor of economics. "For countries like Papua New Guinea and the Solomon Islands that depend on commodity exports, they've been smashed by the collapse of commodity prices.
 
“For countries like Fiji, Vanuatu, Samoa, Palau that depend on tourism, they've been smashed by the shutdown of tourism.

“They may have been successful in containing the virus, but their main problem is these other effects – about which they can do nothing.”
 
The Attorney-General of Fiji, Aiyaz Sayed-Khaiyum, likens the effect to a severe tropical hurricane – “such as Cyclone Winston which struck Fiji in 2016 and wiped out one-third of our gross domestic product in just 36 hours”. The ANZ bank estimates that Fiji will lose about a quarter of all jobs in the country as a result. And that Vanuatu will suffer even worse – the wipe out of about 40 per cent of all jobs.
 
This could be just a beginning in a region with a history of tenuous political stability. When PNG announced a state of emergency last week, it set off some small-scale looting in the capital, Port Moresby. “There are fears,” says Stephen Howes, “that as jobs dry up, people will get desperate.”
 
And while the serene remoteness of the region's island nations is part of their charm and does help protect against infection, it's also a very serious vulnerability when normal global trade shuts down, as it now has. For example, the Solomon Islands imports 70 per cent of its rice from Vietnam. No longer. Vietnam has stopped the trade. And Vanuatu relies on imports for more than 90 per cent of its food supply. These vulnerabilities are in the process of turning into acute crises across the South Pacific. Crises of food, water, medicine in the short term. And crises of unemployment, poverty and unrest in the longer.
 
As we know, when crises hit the South Pacific and nearby, the world looks to Australia to fix them.
The Australian Defence Force's stabilisation missions in the Solomon Islands, in PNG's Bougainville, and in East Timor were all successful responses to violent political unrest. But they were also costly cures.
 
The lesson for Australia must be the old adage that an ounce of prevention is worth a pound of cure.
The South Pacific is looking to Australia for help right now. The good news is that Australia is in the process of responding. So is New Zealand. The association of regional governments, the Pacific Islands Forum, is co-ordinating the creation of a “humanitarian pathway”.
 
With commercial transport shut down, Australia and NZ are in discussions about how to get urgent supplies of food, water, medicine and technical expertise to the South Pacific states. Canberra and Wellington would need to send military aircraft or charter private aircraft. The secretary-general of the Pacific Islands Forum, Meg Taylor, confirmed on Monday that the announcement of a “major initiative” was imminent.

More remains to be done. ANU's Stephen Howes points out that the region's governments are going to run out of money. Unlike Australia or NZ, their governments can't raise money on the international capital markets. There is good news here, too. Two multilateral banks, the Asian Development Bank and the World Bank, already have earmarked over US$7 billion (AUD$11 billion) to support South Pacific states through the coming hurricane.
 
Australia can do more in its own right, too. One example: As part of its “Pacific step up”, the federal government created a $2 billion fund, the Australia Infrastructure Financing Facility for the Pacific. The money is yet to be spent. This fund easily could be transformed into a coronavirus response facility to give budget support to the South Pacific nations that are about to run out of money.
 
China, which in recent years has been vying with Australia and its allies for influence in the Pacific, is starting to send medical teams to some Pacific states. That, according to Howes, is welcome but is a lesser need: “They need support so they can keep governments going.” It's that basic.
 
Even if the island states can strangle the coronavirus epidemic at birth, and reopen schools and universities soon, when will they be able to reopen to trade and tourism? The Pacific may be blissfully calm, but it's the calm before the hurricane.


Peter Hartcher is international editor.

SOURCE: SMH/PACNEWS


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