Averting economic disaster in the Pacific

Six locations across the Pacific Islands region now have confirmed cases of Covid-19. Many of these countries are already ravaged with major diseases such as malaria, tuberculosis, dengue, diabetes, and occasionally even polio. So Pacific politicians are all too conscious of the potential of any Covid-19 outbreak to tip over stretched, and in some cases broken, health systems.

Governments have quickly reacted by bunkering down and barring all international visitors, turning what is often perceived as a weakness – small size and isolation – into a strength. With this foresight and a bit of luck some of the Pacific may avoid the virus altogether, but much of it won’t.

Sadly, the region will not be lucky enough to avoid the economic fallout that is trailing in the wake of this virus. Pacific economies are dependent on the outside world – be it through tourism, commodities, trade, migration or aid. Covid-19 will disrupt all of these economic ties

For the tourism dependent economies, ANZ is modelling such stark figures as a 60 percent contraction in GDP in Cook Islands, and double-digit contractions in Fiji, Palau, Samoa and Vanuatu.

Employment figures are even more harrowing, with close to 40 percent of Vanuatu’s slim formal workforce expected to be out of a job. Even when a vaccine is developed, tourism numbers are only likely to slowly ebb not flow back into the region.