Developing Pacific nations must intensify their structural reform efforts to achieve sustainable economic growth and protect themselves from the global economic crisis, the Asian Development Bank (ADB) said on Thursday.
The Pacific’s banking system is well shielded from the most immediate effects of the global financial crisis, as it has generally sound health and raises and invests most of its funds within the region, ADB said in a press release. However, the island economies are not immune to the ripple effects of a global slowdown, with exports and tourism likely to weaken, overseas remittances expected to decline, and pricing to international capital seen to rise, said the Manila-based development bank. Offshore investments of national trust funds and pension schemes have fallen in value, it added.
“The impact of the financial crisis on the Pacific may be lessened through sound economic management,” said S. Hafeez Rahman, Director General of ADB’s Pacific Department. “The key response to the global financial crisis should be to reinvigorate structural reform, which is crucial to achieving sustained growth,” he said. “The priority is to address constraints to private sector-led growth in the region,” he added. Efforts to improve rural productivity are important for the bulk of the population in the agriculture-based economies. Private sector investment is important for tourism-based economies, the bank said. — Xinhua