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World Bank Releases Report on how Pacific Island Countries can Benefit from the Changing Environment

The COVID 19 pandemic has not only impacted local and international travel, but has grave impacts on livelihood, unemployment, and international labour mobility.

A new World Bank report, Pacific Island Countries in the era of COVID 19: Macroeconomic impacts and job prospects, shows how the Pacific may take advantage of a changing environment, as well as other opportunities - and at the same time, details the extent of these job losses.

The report also talks about how seven Pacific countries (Samoa, Fiji, Solomon Islands, Vanuatu, Kiribati, PNG, and Tonga) are having a difficult time coping, especially those that rely heavily on tourism. Vanuatu, for instance, has dropped an estimated 64 per cent in tourism-related employment and has tripled the unemployment claims in Fiji last June 2020. The job advertisements of PNG have also dropped by 76 per cent between February and May 2020.

“The changes that we have seen in labour markets and employment across the Pacific are profound and are hitting the most vulnerable hardest - but importantly they are also leading families who would have been previously secure into vulnerable positions, especially workers in the tourism sector,” said Yasser El-Gammal, Practice Manager, Social Protection and Jobs, the World Bank.

The report also includes ways on how to mitigate these economic and unemployment challenges. Among them are prioritizing and retaining skill development of workers in affected areas so they can move to other industries that have the same skill sets; promoting digital literacy skills, and discovering new employment opportunities.

“Ultimately, workers from the Pacific will remain in demand in Australia, New Zealand, and elsewhere for a long time to come,” said report author Matthew Dornan, Senior Economist at the World Bank. “The various Pacific labour mobility schemes that are focused on employment in rural and regional areas are not only crucial to livelihoods and employment in the Pacific, but beneficial for employers and businesses in Australia and New Zealand.”

The report also suggests the need for workers for re-skilling - which includes subsidizing their reskilling, support for apprenticeship schemes, temporary wages for the unemployed, as well as the expansion of international labour mobility opportunities. Resilient countries can also work through labour policies.

“Labour mobility requires close cooperation between countries,” said co-author Soonhwa Yi, Senior Economist at the World Bank. “While policy improvements from Pacific governments could help expand the overseas employment opportunities available to Pacific Islanders, receiving countries also need to ensure their migration and working visa policies support future demand for increased labour mobility.”

While the report highlights the need for the government to respond to these livelihood and unemployment impacts, it also asks that the government should consider supporting businesses too, like in PNG and Tonga. Examples of this are in Solomon Islands, Samoa, and PNG where cash flow has been safeguarded through tax and import duty relief; and looking at other opportunities for social assistance and direct cash transfers to sensitive populations.

“The COVID-19 pandemic also highlights the urgency for Pacific countries to expand IT-related infrastructure and increase their engagement in the digital economy,” said Soonhwa Yi. “This would provide opportunities for workers in the digital economy and better position Pacific countries to export digital services across borders.”

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