Reclaiming Pacific Island Regionalism: Does Neoliberalism Have to Reign? by C. Slatter and Y. Underhill-Sem

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Reclaiming Pacific Island Regionalism Does
Neoliberalism Have to Reign?byC. Slatter and
Y. Underhill-Sem

• Comments
• by
• Mahendra Reddy
• College of Business, Hospitality and Tourism
  Studies,
• Fiji National University.

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Introduction

• Regionalism is an ideology that focuses on the
  interests of a particular region or group of
  regions, whether traditional or formal.
• This paper demonstrates this aspects by providing
  a history of how regionalism is not a new concept
  but has been in practice in the region for
  decades.
• The authors very ably quote the 1993 seminal work
  of late Prof Hauofa (Our Sea of Islands).

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Introduction cont..

• The authors also quote a 1949 piece in Christian
  Science Monitor by Albert Norman, European
  Observer who noted that colonisation of the
  region imposed political barriers which has
  indirectly disintegrated the invisible linkages
  and connectedness amongsts the Pacific Society.

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The Old Regionalism

• There was limited trade amongst the Pacific
  communities
• There has been sub-regions within the larger
  Pacific community, the Micronesians, the
  Melanesians and the Polynesians.
• Regionalism within these clusters were enhanced
  by similar music, culture and traditions, food
  consumption and lifestyle.

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Pacific Community and Region Has Grown
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Why Has the Region Grown

• Authors argue that it is top driven, the advent
  of Neoliberalism.
• I argue that it is more than that.

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Neoliberalism Ideology and Changing Face of
Pacific Region

• The authors argue
• that economic ideology has changed in the
  Pacific
• The ideology has been externally driven
• The ideological basis for economic decision
  making is the cause for economic woes in the
  Pacific

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Neoliberalism Ideology and Changing Face of
Pacific Region cont

• I argue
• that economic ideology has changed in the
  Pacific
• Yes
• The ideology has been externally driven
• Yes
• The ideological basis for economic decision
  making is the cause for economic woes in the
  Pacific
• Not really

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Changing Economic Ideology

• Yes Capitalism has been the ideological
  orientation since the colonisation. However, it
  was gradually embraced by the Pacific community

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Origins of Economic Ideology

• Yes but why
• As population grew while land resource remained
  constant, the need for surplus creation arose
• As every household started to create surplus, the
  capitalist ideology became the national ideology
• Then local government started to send its people
  to get educated in the western world to further
  the capitalist ideology.

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Is the Ideological Basis Cause of Economic Woes?

• Not really
• Surplus creation worked well
• Surplus creation was supposed to
• Make the economy grow
• The benefits from the growing to be
  re-distributed

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Governance Problems

• However, the countries got plagued with
  governance problems
• Corruption and rent seeking rife
• Disruptions in macroeconomic policy making
• Disruption in national governance
• This led to
• Low growth
• Worsening social problems

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Is it a Ideological Problem ?
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Washington Consensus

• In their May 1997 issue of the World Economic
  Outlook, the International Monetary Fund provided
  a new Washington consensus that sought to
  summarize the state of play by arguing that
• A key lesson seems to be that the pressures of
  globalization, especially in the past decade or
  so, have served to accentuate the benefits of
  good policies and the costs of bad policies.
  Countries that align themselves with the forces
  of globalization and embrace the reforms needed
  to do so, liberalizing markets and pursuing
  disciplined macroeconomic policies, are likely to
  put themselves on a path of convergence with the
  advanced economies, following the successful
  Asian newly industrialized economies. These
  countries may expect to benefit from trade, gain
  global market share, and be increasingly rewarded
  with larger private capital flows. Countries
  that do not adopt such polices are likely to face
  declining shares of world trade and private
  capital flows, and to find themselves behind in
  relative terms (IMF, 199772).

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Assumes Away a Number of Key PIC Economic Features

• However, the Washington Consensus fails to paint
  an accurate picture of the situation
• It assumed
• that the necessary institutions for the policies
  that they advocate to be effective, both private
  and public
• The institutions are in place and that they are
  operating effectively.
• The general population are educated to understand
  the importance of the new economic order
• How to deal with information assymetries
• How to deal with imperfect markets
• How to deal with negative externalities
• That factors of production were free to move to
  productive areas
• That cultural and tradition did not create any
  impediment for business operation
• That culture and tradition was not an impediment
  for people to raise concern about abnormal
  behaviour.

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Is Ideology a Problem

• No
• It is timing and sequencing

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Consequence of Low and Slow Growth

• People have migrated to live elsewhere
• People have temporarily migrated to supplement
  household income back home
• Rugby players
• Military and Police Officers serving on peace
  keeping missions abroad
• People are going overseas to perform in concerts
  and musical shows
• Sea fearers

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Consequence of Low and Slow Growth cont

• People are leasing land for commercial
  development and thus an income source
• Tourism projects
• Pearl farming
• Fishing rights on qoliqoli areas
• Top class residential lots

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Pacific Community Outside the Pacific!

• Same taste and preferences
• People are exporting primary products to them
• People are receiving remittances from them
• People go for holidays to their places

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Pacific Community outside Pacific Props up
Pacific Economy

• Globalisation has
• Made tourism industry prosper and thus the
  economy
• Unlike other industries, this industry
  infiltrates the rural and costal community who
  other wise are forgotten
• Made money transfer easier
• Made money transfer reach not just the urban
  elites but the rural dwellers as well
• ANZ rural Banking programme started in 2004 with
  72 clients and a total deposit of 4230. In June
  2008, the total deposit was 5,004991.00 with
  62257 clients.
• Provided opportunities for the rural agrarian
  communities

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So why Social Indicators Say Otherwise?

• Globalisation and market economy rewards the
  owners of factors of production
• Who are they?
• People who have access to land (higher returns to
  land)
• People who are educated and skilled (higher wages
  and salaries)
• People who have access to capital (higher
  interest rates)

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How to Address Social Woes of Those not Addressed
by Globalization

• Not to derail globalization but to
• Strengthen, widen and deepen financial
  institutions which the poor can find accessible
  and affordable
• Make land accessible to those willing to till
• Make education, TVET training accessible and
  affordable to all

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Failure to do so

• While growth will occur, it will get concentrated
  in the hands of the few hence growing disparity
  and inequality.
• Increasing social problems.
• Ideology is not the problem its the lack of
  the fundamentals.

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Regional Initiatives Can Help

• Regional approaches have the potential to provide
  at least part of the solution in a number of
  areas
• governance areas training and education
• Market access
• Capital sourcing
• Enhancing labour mobility schemes
• Free trade areas to reduce final product costs

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Dhanyavad and Vinaka!