[Originally published in the Vanuatu Daily Post’s Weekender Edition.]
When I learned of the release of this year’s Pacific Economic Survey, I was excited. I shouldn’t have been. The contrast between the 2008 report and this year’s could not be stronger. How could something so promising have fallen so far so fast?
When a player fails, you blame the player. When a team fails, you blame the coach.
Produced by the Australian government, the Survey looks at economic trends across the region and maps them to major development issues. Or, at least, that’s the game plan.
The 2008 report provided timely and useful assessments of telecoms and transport sector liberalisation. It was an enlightening document that validated some of Vanuatu’s key policies as well as providing analysis concerning future trends. I found it useful enough that I wrote about it or referenced it 7 times over the course of the year.
This year, I expect to write about the survey just this once. The 2009 report seems to be animated primarily by the Australian government’s desire to see a regional free trade agreement. The Survey sacrifices common sense and ignores its own data in its quest to glorify liberal trade policies that simply do not fit with the economic realities in Vanuatu today.
On Wednesday of this week, Minister Edward Nipake Natapei and Australian High Commissioner John Pilbeam jointly announced the creation of a telecommunications Universal Access Fund. Designed to ensure that communications services reach all parts of Vanuatu, the fund was rolled out with an initial contribution from AusAID of 215 million vatu.
The idea is to allow market forces to work in the vast majority of the country, providing mobile telephone services on a for-profit basis. Digicel’s license terms state that it must make its service available to 85% of the population.
Mobile telephone service costs are tiny compared to traditional land lines. Infrastructure is minimal, and it’s not as susceptible to damage by the elements. Digicel is confident that it can profitably provide services over such a wide area. They’re so confident that they’ve ponied up a significant chunk of cash as a performance bond.
In time we’ll see TVL and smaller, ‘boutique’ operators entering these once marginal markets as well. But there will always be areas in Vanuatu that simply can’t be serviced profitably. This is where government enters the scene. They’ve designated a basket of money that will ensure that everyone from Aneityum to the Torres islands has access to mobile phone services.
Earlier this week, Australia unveiled the Pacific Economic Survey here in Port Vila. Present for the event was a delegation from all around the Pacific Region, including Melanesia and Polynesia as well as senior politicians from Australia. AUSAid’s chief economist was also there to present the findings.
The report is the first of a series of annual surveys that will provide an overview and update of economic developments in the Pacific island region and Timor-Leste. It collates and summarises public data on various aspects of the region’s national economies, performs some comparative and collective analysis with the results, then provides a few basic recommendations.
The theme for this year’s report was Connectivity. The survey focuses on aviation, shipping and telecommunications. It argues that liberalisation, more input from the private sector, and a cooperative regional approach to the problems inherent in improving connectivity are keys to improving Pacific economies.
The findings in the area of telecommunications do much to validate the Government of Vanuatu’s market liberalisation strategy and provide every encouragement to expand upon them. It addresses some potential pitfalls that might be encountered, primarily where access to technical expertise is concerned. And that is where it risks missing the boat.