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Economic and Social Survey of Asia and the Pacific 1981

image of Economic and Social Survey of Asia and the Pacific 1981

This latest edition of the Survey analyzes current economic and social developments in the region against the background of events in the world economy. It also focuses on the serios problems of growth and transformation of the area's least developed and Pacific Island developing economies.

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South Pacific island countries

Pacific island countries had come into economic difficulties during 1980. World prices fell for their major export commodities with the exception of sugar and, in that year, bad weather severely damaged the sugar crop upon which Fiji depends very heavily for its export receipts. There was some recovery in Fiji during 1981 due to increases of production, and in Papua New Guinea due to bigger outputs from the Bougainville mine and investment activities connected with the new Ok Tedi mine. Commodity prices continued to fall to the detriment of export receipts in all Pacific island countries, and Kiribati suffered a big loss with the exhaustion of the phosphate deposit on Banaba island. Higher prices for oil and other imports added to difficulties over balances of payments, as did the stimulus to imports of consumer goods from high rates of inflation. Samoa, despite a previous large devaluation, lost its free reserves of foreign exchange, and Solomon Islands had to devalue its currency. Except in Fiji and Papua New Guinea, inflation was associated with the financing of budgetary deficits and ranged, during 1980, from 11 per cent in Papua New Guinea to 23-30 per cent in Samoa and Tonga. Inflation moderated in 1981 in Fiji, Papua New Guinea, Samoa and Tonga, but accelerated in Cook Islands, Solomon Islands and Vanuatu. Conditions for the smaller island economies have deteriorated, and Samoa has appealed for aid to the United Nations Conference on Least Developed Countries, although some other island countries have no better economic prospects.

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