Growth forecast for Pacific – ADB

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Growth forecast for Pacific – ADB

A NEW report by the Asian Development Bank forecasts economic growth in the Pacific to rebound in 2022-2023 with growth for the subregion projected to be 5.3 per cent in 2022 and 4.8 per cent in 2023.

According to the Pacific Economic Monitor (PEM) this growth would be partly fueled by stronger-than-expected tourism activity in Fiji and a recovery in Papua New Guinea’s minerals sector.

“While modest recovery is expected for the subregion, Pacific economies cannot be complacent,” said ADB director general for the Pacific Leah Gutierrez.

“Now is the time to strengthen social protection systems to help build resilience to future economic shocks.”

The PEM states that as Fiji’s strong economic rebound continues, headwinds such as labour movement and youth unemployment need to be addressed to sustain the pace of its recovery.

The report recommends that achieving this will require targeted labour market strategies, such as long-term training programs, to expand the supply and skills of workers and mitigate the problem of brain drain.

It continued to say that challenges posed by both rising youth unemployment and labour out-migration were significant as these could threaten the economy’s strong recovery.

According to the PEM quick solutions to these headwinds must be accompanied by responsive skilling programs and enabling policies that reduce the likelihood of labour shortages and migration issues.

While the government recognises the concerns of Fijian businesses which are adversely affected by their workers’ exodus from Fiji, it understands also that availing such high-paying opportunities overseas are a right of the workers.

The report states that the dual challenges of youth unemployment require both short and long-term measures that should be designed to respond to the immediate needs.

These measures should be designed to respond to the immediate needs as well as create sustainable programs that enhance the employability of young people.

It said these targeted but large-scale strategies could contribute to the broader goals of poverty reduction, more inclusive labour markets for Fijians, and long-run sustainable growth.

It also suggested that rising youth unemployment could be viewed as a growing untapped labour resource which can address the labour shortage needs of Fijian businesses who were severely affected by the massive out-migration of their former workers.

This may be viewed as a simplistic approach to address concerns which are expected to have a long-term impact on the economy.

Closer co-ordination and collaboration among stakeholders is necessary to address these issues.

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