GAP Summit for the Pacific and Small Island Nations

I can't think of a more timely or important discussion to be having than the economic, social and governance future of our near Pacific region.

I spend a lot of time talking with my Pacific Island counterparts about this – about how we can work together to respond to the challenges we face and build a brighter future for all.

And it will come as no surprise that our biggest focus over the last year has been the devastating impacts of COVID-19. 

The COVID-19 pandemic has hit our region hard.

Pacific Island governments have done a remarkable job in limiting the spread of the virus.

But while the geography of our island nations has been one of our most important assets in containing the virus, closing international borders has come at a huge economic and social cost.

According to the Asian Development Bank, the Pacific experienced a 5.8 per cent contraction in 2020, and the 2021 economic outlook for the Pacific is subdued at just 1.4 per cent growth.¹

When we look at the Indo-Pacific region as a whole, the Pacific is disproportionately impacted – of the nine ADB members expected to contract for a second year in 2021, seven are in the Pacific.²

And that figure of 1.4 per cent growth is optimistic, as the ADB forecasts preceded recent outbreaks in Papua New Guinea and Fiji.

If household consumption contracts by ten per cent, this could push an additional 500,000 people in the Pacific into extreme poverty.

And at a time when communities need support the most, governments are faced with tight fiscal environments.

It's been a particularly tough year for tourism – an industry that accounts for a significant proportion of GDP for many of our partners.

When Australia first announced our Pacific Step-up in 2016, we committed to support our Pacific family through thick and thin.

And that's exactly what we're doing in response to COVID.

We've pivoted our development assistance program to meet the urgent health and economic security needs of the Pacific.

Through our Partnerships for Recovery strategy, we're working with international partners to support the delivery of vaccines to communities across the region.

Prime Minister Morrison announced our new commitment at the G7 Summit to share 20 million COVID-19 vaccine doses from Australia's own supply by mid-2022 – which complements our $523 million Vaccine Access and Health Security Initiative.

We've already sent more than 300,000 vaccines to Papua New Guinea, Timor-Leste, Fiji and Solomon Islands since the start of May.

And we're partnering with UNICEF to procure and deliver vaccines for up to 15 million people in the Indo-Pacific by mid-2022.

We're not only procuring and sharing vaccines, we're also providing end-to-end support – such as health worker training, technical resources and cold-chain storage. 

In order to protect the gains we've made over decades, and embed a truly sustainable recovery, we're also investing in supporting more resilient economies in the Pacific.

For Australia's part, in addition to our record A$1.44 billion in development assistance to the Pacific this year, we're providing $300 million over this year and next as part of a targeted Pacific Response Package.

This is supporting the Pacific and Timor-Leste to maintain essential services and social spending to protect the most vulnerable and contribute to economic recovery.

For example, in Solomon Islands we're distributing emergency funding to struggling tourism operators.

And in Fiji, we're supporting social protection schemes through their Poverty Benefit Scheme, the Care and Protection Allowance, and the Disability Allowance.

We're helping facilitate air connectivity, and supporting a safe, reliable and sustainable aviation sector.

This is helping keep supply chains open, and will ensure the aviation industry is ready to contribute to a tourism-led recovery once international borders reopen.

And while our focus on infrastructure pre-dates the pandemic, this work is more essential than ever.

We're allocating funding from the Pacific Response Package to infrastructure projects that support local communities.

In Timor-Leste, A$13.5 million will go to support new infrastructure projects for more than half of the country's 452 villages, directly benefitting more than 40,000 households.

And in Solomon Islands we're improving water supply and sanitation facilities for more than 6,000 households.

These local initiatives build on our flagship A$2 billion Australian Infrastructure Financing Facility for the Pacific – which is providing grant funding and loans to support new infrastructure in the Pacific and Timor-Leste.

Under the AIFFP, we've approved four major projects in Palau, Solomon Islands and Papua New Guinea.

We know that Pacific governments need genuinely sustainable financing options for infrastructure.

So in providing sovereign loans, the AIFFP will ensure financing is tailored to reflect a country's specific debt circumstances.

More broadly, we're helping to ease the debt burden facing Pacific partners by advocating for debt suspension under the G20-Paris Club Debt Service Suspension Initiative.

One of the best ways we can support the Pacific is through greater economic integration – opening up new markets and bringing down barriers to trade.

It's why Australia has been such a strong supporter of PACER-Plus, which will help Pacific businesses participate in regional and global supply chains.

And why we're actively looking at how we can safely introduce travel bubbles to get our region moving again.

We're also investing in the most important asset our region has – our people.

Under the Pacific Labour Scheme and Seasonal Worker Programme, more than 7,000 Pacific and Timorese workers have arrived in Australia since September 2020 – ensuring remittances continue to flow to communities. 

Finally, we need to use this time to prepare for the future – and the challenge that is front of mind for our Pacific partners and for Australia is climate change.

In addition to Australia's $500 million spending over the next five years on renewable energy, climate change and disaster resilience in the Pacific, we're making sure that climate change is embedded across our pandemic responses.

For example, Australia's A$39 million Pacific Horticultural and Agricultural Market Access Plus program is working with farmers and agribusiness in Fiji, Papua New Guinea and Tonga to provide climate projections and tailored advice to improve food security.

When we consider that, in Papua New Guinea, more than 28 per cent of households reduced food consumption to cope with the initial shock of the pandemic, this will make a tangible difference to lives of thousands.

In many ways, our approach to the pandemic and to climate change is similar.

These are complex and pervasive threats to our region, and so we need to work in partnership with governments, business, international organisations and civil society to maximise our chance of success.



As we look ahead to the next 12 months, these partnerships will be key.

I look forward to continuing my own engagement with Pacific Island leaders and ministers, and I know Prime Minister Morrison and Foreign Minister Payne do as well.

I want to reiterate Australia's commitment to working with business, so we can better leverage financing, support investment in key sectors, and create jobs.

And, of course, partnerships with international organisations and civil society will be key, including with the GAP and ICDP.  

I also want to recognise in particular the important role the OECD will play in providing analysis and advice to Pacific Island countries – and I know this is a view shared by OECD Secretary-General Mathias Cormann. 

The scale of the challenges facing our region is significant – but so too is our resolve.

I look forward to continuing our work together to build a stronger, more sustainable recovery in the Pacific.

(Word count: 1,268, 10 mins)

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1 Asian Development Bank Economic Forecasts: April 2021

2 Asian Development Bank GDP Growth in Asia and the Pacific, Asian Development Outlook (ADO)