The Cost of Doing Business in the Pacific Islands: The Case of Fiji

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LED Scoping Update for Kiribati and Cook
Islands Pacific Islands Local Government
Association Network (PILGAN) Meeting Port
Moresby, PNG 23 May 2014
Henry Sanday Suva, Fiji hesanday_at_gmail.com
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Outline of Presentation

• Terms of Reference
• Definitions of LED
• Kiribati
• Cook Islands
• Suggested Way Forward

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Terms of Reference

• Review key documents and interview relevant
  stakeholders to determine LED potential,
  opportunities constraints
• Assess relevant laws and regulations to identify
  areas that can facilitate and boost LED
• Consult relevant stakeholders to determine their
  views and opinions on national development
  strategies on LED
• Develop appropriate LED strategies that will be
  an integral part of existing LG Strategic Plans
• Country Missions
• Tarawa, Kiribati 27-31 January 2014
• Rarotonga, Cook Islands 13-18 April 2014

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Definitions of LED

• a participatory process in which local people
  from all sectors work together to stimulate local
  commercial activity, resulting in a resilient and
  sustainable economy (UN-HABITAT 2005)
• a way to help create decent jobs and improve the
  quality of life for everyone, including the poor
  and marginalised
• a process which brings together different
  partners in a local area to work together and
  harness local resources for sustainable economic
  growth (2012 PLGF)
• ways to delivering benefits to the community and
  also helps broaden the income base of local
  governments
• Local Solutions by Local Stakeholders for Local
  Economic Problems

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Context of Kiribati

• Population 100,000 on 21 inhabited islands
• 23 Local Councils
• 3 urban (Betio Teinainano 50 population
  Kiritimati)
• 20 island councils
• Administered under the Ministry of Internal
  Affairs
• Members of Kiribati Local Government Association
  (KILGA)
• Total Govt Grants to Councils in 2013 AU1.3m
• Support to Elderly Fund in 2013 AU22,920

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Kiribati Development Plan 2012-15

• KPA2 Economic Growth Poverty Reduction
• Expanding and diversifying government revenue
  base
• Implementing a new tax regime and modernising tax
  system
• Reviewing vocational training and tailoring
  courses to internal and external labour markets
• Accelerating private sector development (incl.
  creation of a conducive environment for PPPs in
  eco tourism, in-country fish processing and
  sea-bed exploration research)
• Improving public finance management system
• improving government fiscal position by improving
  performance of state-owned enterprises
• Improving livelihoods through effective
  implementation of subsidies such as copra and sea
  weed

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Betio Town Council (BTC), SP 2013-16

• Vision a progressive and prosperous town with
  educated people living in a good, clean and happy
  environment
• Local problem unemployment or limited options
  for breadwinners of large extended families to
  earn income, which has resulted in a lowering of
  their social and economic wellbeing

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BTC, SP 2013-16 Economic Strategies

• 1. reduce unemployment rate by 10 for age group
  between 18-25 by 2015
• create job opportunities in partnership with
  Government and private sectors in country and
  abroad
• provide and support business skills training for
  women and youth on income generation
• 2. support to private sector development
• develop PPP relationships with partners including
  KCCI, Government organisations by 2013
• rationalise business by-laws and rates
• upgrading of the BTC CBD Business Centre by 2015
• 3. enhance and support existing and new
  self-employment community and individual business
  operations 2013-2016
• fisheries and agriculture based businesses
  enhancement/training programs
• fisheries agriculture projects (ramp, sea wall
  and market)
• special license fees/rates for the sectors of
  fisheries and agriculture
• Fish marketing by women contributes to LED

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Teinainano Urban Council (TUC), SP 2013-16

• Vision people on South Tarawa enjoying a
  healthy, productive, and peaceful lifestyle
• Local problem congested homes or squatters,
  lack of open and fresh spaces, shortage of
  clean water, polluted air and lagoon, high
  rates of crimes (especially among youth),
  dangerous driving, lack of nutritious foods, high
  cost of living etc.

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TUC, SP 2013-16 Economic Strategies

• 1. establish local markets
• carry out a survey to identify the sites and the
  number of potential markets along TUC area
• consult land owners about the markets and
  identify people to look after the market
• write up a funding proposal for setting up
  required markets for TUC area
• 2. improve and construct fishing passages
• undertake a survey to identify communities or
  localities needing a fishing passage
• consult all stakeholders incl. Environment
  Fisheries Departments
• write a funding proposal for the identified
  fishing passages
• 3. set up a big shopping mall in Bairiki
• follow up on the plan and work that have been
  made earlier on the project

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Key Issues

1. Recognise LED nationally, locally outer islands
2. Align LG budgets with KDP framework
3. Strategic Plans for MIA Island Councils
4. Institutional capacity, funding governance of
   Councils
5. Political vs. Development-orientation of Councils
6. Ministry-Council collaboration
7. Archaic inconsistent (national vs. Island)
   business regulations
8. Representative policy dialogue with Government
9. Women in business (fees discrimination)
10. Import substitution esp. food production on Eutan
11. Donor help (NZAID Taiwan)
12. Practices of Asian-owned businesses
13. Issues with land, finance, environment
    education (USP training)
14. Opportunities at Bonriki Airport

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Issues with KILGA (impact on LED)

• Post-CLGF funding sustainability
• Planning for Mayors Conference in April
• Strengthening relations with
• Urban Island Councils
• Government
• Private sector through KCCI
• Donors
• NGOs
• Support for business export development

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Context of Cook Islands

• Population 15,000 (Rarotonga has 2/3)
• 11 Outer Islands or Pa Enua
• Exclude urban Rarotonga
• 6 in Southern Group 5 in Northern Group,
  governed by 10 Island Governments
• Administered under the Pa Enua Division, Office
  of the Prime Minister
• Members of Island Governments Association of Cook
  Islands (IGACI)
• Total Welfare payments NZ410,000/month or
  4.9m/yr
• Total Govt Budget resources 2013/14 NZ10.5m

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Cook Islands National Sustainable Development
Plan (NSDP) 2011-15

• Envisages a vibrant Cook Islands economy where
  ingenuity and connection to our culture and
  environment underpins the ability of our people
  to build business and enterprise for national
  economic growth.
• To be pursued through
• Objective 1 An energised and growing green
  economy through supporting our key economic
  drivers and encouraging environmentally sound
  innovation in potential areas of growth
• Objective 2 Enterprise is enabled by
  establishing an innovative environment conducive
  for existing businesses to confidently grow and
  for new businesses to start, grow and thrive in
  our communities
• Objective 3 Our Cook Islands environmental and
  cultural values are integral to business decision
  making and practice

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NDSP Economic Strategies

• Ensure our tourism excellence
• Unlock our potential from our marine resources
• Unlock our potential from our agricultural
  production
• Identify and exploit trade opportunities
• Build our financial services
• Ensure that our cultural and creative Industries
  are a key force in job and wealth creation and
  nation building
• Sustain macro-economic stability
• Ensure proactive economic development policies

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Revitalising Growth in the Pa Enua

• Review of Outer Island Govts by ADB in 2011
• Island Government Act 2013 (devolution of powers)
• Island Government Business Plans 2013/14
• 2014/15 Priority Areas to support the Pa Enua
  (impact on LED) are as follows
• growing island economies
• improving infrastructure to support the pillars
  of sustainable development
• building resilience in the country
• improving transportation and in particular
  shipping
• improving social development outcomes
• improving governance

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Priority Areas for Development in the Pa Enua,
2013/14
Island Priority Areas for Development
Aitutaki Island Council Administration Infrastructure Agriculture Women, Culture, Youth and Sports Waste Management
Atiu Agriculture Infrastructure Energy Corporate Services
Mangaia Agriculture Tourism and Community Development Infrastructure Public Utilities Finance and Administration Island Council Management
Manihiki Gender, Youth and Sports Infrastructure Energy Finance and Administration Council Agriculture Corporate Services
Mauke Infrastructure Energy Water Finance and Administration Agriculture Gender and Development Island Council
Mitiaro Island Administration Island Council Social and Economic Growth (income earning activities) Infrastructure Energy Agriculture
Palmerston Administration Agriculture Education Energy Infrastructure Island Council Corporate Services
Pukapuka/ Nassau Infrastructure Energy Finance and Administration Island Council Women, Youth and Sports, Culture
Rakahanga Agriculture Marine Beautification Infrastructure Energy Administration Island Council
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Key Issues

• Depopulation labour mobility
• Inter-island transportation
• Disparity between Rarotonga and Pa Enua
• Island Govts Development vs. Political
• National vs. Local Regulations
• Resource Owners
• PSD BTIB (Foreign vs. Domestic)
• Tax registration for gt40k

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Suggested Way Forward

• National Government
• Mayoral Conferences
• Streamlining of National/Local business
  regulations
• Development Partners
• Island Councils/Governments
• Inter-Island Council/Govt collaboration
• Private sector communities
• National LGA
• Linkages with PILGAN
• Advocacy with National Govt
• CLGF Pacific
• Sharing of international best practices via NLGA
• Institutional capacity building for Councils

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Vinaka vakalevu