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A Pacific model for balanced development?

Speech to Club de Madrid International Forum, Imperial Springs, Guangzhou, May 29, 2016

It is an honour to be in the company of so many former heads of state and government and I thank the hosts for providing me with the opportunity to speak today about development innovation in a very special part of the world.

I want to take you on a journey away from the cities.  Most of us, of course, come from cities and cities are very important as drivers of creativity, innovation and centres of economic activity.  But most of the world is not cities.  Most of the world is ocean and while it is sparsely populated, the ocean is vastly important to all of us.

It is across the ocean that goods are traded and it is because of trade across the seas that we have today’s international trading system.  Globalisation relies upon sea freight, the most efficient way to transport goods across great distances.

It is also in the oceans of the planet that our environment is governed.  The very scale of the oceans underlines their importance to our environment.  For example, it is a little known fact that all of the continents would fit into the Pacific Ocean and there would still be room to spare. 

The world’s climate is impacted by the health of the Pacific Ocean.

And the oceans, particularly the Pacific Ocean, are home to the world’s great fishery resource.  Today we are also beginning to understand that under the sea bed is a great store of deep-sea minerals that it will soon be possible to extract.  We now have the technology for undersea mining that we did not have in recent generations.  But of course in realizing this potential, we will also need to take extreme care to ensure the health of the ocean environment.

There is also another, perhaps more romantic reason why the ocean is important.  The South Pacific, in particular, evokes for us all a vision of paradise.  That’s something important in itself; we must treasure this very special part of the world with the purest, most pristine air, water, beautiful reefs with their coral and coloured fish, the world’s best beaches and the very ideal that we all have of spending a little time relaxing in the gentle breeze and watching a tropical sunset.  The Pacific can fire our imagination and feed our souls.  If we protect it.

We have been discussing new problems in the world economy and the need for innovation.  Innovation comes from vision, people who imagine a different way to solve a problem and persevere, against the odds, testing and experimenting until they find a new solution.

I want to discuss the potential to apply some innovation to the South Pacific and how success there might help inform us, provide a case study, for innovation in other parts of the world.

The old economic model imposed by colonialism over the last two centuries failed to live up to our hopes for economic development of the island nations of the Pacific.  Instead, economic dependency has become entrenched in many places, a dependence on aid that is given with the best will in the world by neighbours such as Australia and New Zealand and others further away including the European Union, Japan and of course China.

Instead of fishing as in traditional societies, many of the island nations now collect significant revenue from fishing licences paid by foreign fishing vessels.  That is all very well, the cheques are welcome, of course, but local people are no longer as actively employed as they could be.  The same applies to imported foods and imported lifestyles that are causing chronic disease epidemics.

Because of their isolation, tourism is very under-developed in most of the island nations, perhaps a good thing because there has been minimal impact on the environment, but many people are also missing out on jobs that could be created, that could be providing better livelihoods for working age citizens and families of the Pacific.

So how to overcome the problems of dependency, isolation and underdevelopment?  The Belt and Road vision outlined by President Xi Jinping could be part of the answer.  The concept of a 21st Century Maritime Silk Road could be a platform to connecting the Pacific Island economies with larger markets as well as improving the connectivity between themselves.

With investment in ports and logistics for sea freight, key infrastructure and air links for the movement of people as well as fresh goods, the Pacific Islands no longer need to be isolated.  These small, distant nations can become part of integrated global supply chains with the development of new, niche domestic industries to create employment and growth.

Resource-rich nations such as Papua New Guinea will be able to supply its resources to China and other Asian markets, as well as perhaps processing and re-shipping the resources of its high cost neighbour, Australia.

Instead of just selling fishing licences, nations across the South Pacific could develop aquaculture industries to farm fish if we can invest in the infrastructure, training and expertise, matched with efficient links to markets.

With better air links, it will be possible to develop more high quality resorts to bring tourists from China and other places to experience the paradise of the Pacific.  Those resorts and associated infrastructure will create not just tourism industry employment but also employment for the provision of fresh local seafood, tropical fruit and other services, as well as a wider audience for the rich local cultures and arts.

The innovation in the Belt and Road concept is not just an infusion of investment in infrastructure and connectivity for economies that have historically suffered from under-investment.  It represents real innovation in the very concept of South-South cooperation.  Here is the potential for a giant developing nation, China, to assist smaller developing nations, for mutual benefit.

China has generously provided $2 billion in funds for infrastructure and other key assistance to the Pacific Island Countries.  Along with multilateral funds and the support from other partner countries, we can do this.  The island nations of the South Pacific are small economies and the scale of assistance is large, in relative terms, so we must wisely apply it to take advantage of this opportunity for development.

Our challenges are not only economic.

The world has been slow to grapple with it, but scientists agree and most people are now aware that our climate is changing.  Global temperatures and oceans are rising, weather patterns are becoming more extreme.  To the extent that human activity is a contributor, we must find ways to reduce our impact as well as to adapt.

This is a critical question for the people of the Pacific and one that we must tackle at the same time as economic development.  We need to find a truly sustainable development model.

It is critical because these nations that have contributed the least to the causes of global warming are amongst those who are most directly suffering its early effects.  Already, low-lying islands are disappearing with the rising ocean levels.  Ground water is becoming salty. King tides, which used to be rare, are becoming all too common, threatening in particular the coral atolls and low lying island communities.

The changing climate, regardless of cause, has also in recent times brought some of the worst natural disasters we have seen.  The cyclone seasons are getting worse, with the recent tropical cyclone Winston being the worst to ever hit Fiji.

These are resilient communities but we must design economic development to ensure resilience against the changing climate.

We will all benefit from finding the right balance for the Pacific Islands between the development of new domestic industries linked to markets with environmental sustainability and resilience.  We will all benefit because the Pacific is a special place in the global community’s imagination, as much as it is home for the people of the islands.  We need to preserve it as a model for the world – a demonstration that we can protect our environment and provide a good life for our people.   If so, the Pacific can forever represent our ideal of paradise.

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