Pacific

The development prospects for the Pacific are mixed even though some achievements have been made, such as substantial improvements in life expectancy over the past 15 years.

The fragile states of the Pacific are especially vulnerable to developmental decline due to their small size, lack of economic diversity, remoteness from major trade and commercial sectors, and weak governance frameworks.

Economic gains have been weak, volatile, and unequally distributed. Weak public expenditure frameworks have affected the quality and distribution of key services and infrastructure. Social instability has hampered growth, particularly in Solomon Islands where civil unrest contributed to a decline of 25 per cent in GDP from 2000 to 2003. Growing populations pose future challenges for sustainable development.

HIV/AIDS is a growing concern, especially given the high rate of STD transmission in Pacific countries. Pacific countries are particularly vulnerable to social and economic devastation were an HIV/AIDS epidemic to proceed unchecked.

The development challenges confronting the region - governance, poverty, stability, economic security, rapid population growth, HIV/AIDS, strengthening the core institutions for democratic nationhood and ensuring individuals have a greater sense of their place within a broader national identity - cannot be addressed quickly or easily.

Governance is at the heart of development issues in the South Pacific. A legacy of inappropriate colonial structures and issues with affordability of government have impeded internal political integration and nationbuilding in many Pacific countries.

Australian aid to the Pacific

A Pacific Regional Aid Strategy 2004-2009 provides the framework for Australia's long-term development goals in the Pacific.

The framework focuses on four themes:

stronger broad-based growth
more effective, accountable and democratic government
improved law and justice and security
enhanced service delivery, including effective fiscal management.

Australia is applying a 'hands-on' approach to its aid program in the Pacific. Rather than let regional neighbours' problems deteriorate, Australia is working to build the region's capacity to pursue governance reform and work collectively to address shared problems.

Success in achieving growth in the Pacific, which is necessary for reducing poverty and encouraging sustainable development, has been mixed. Pacific countries that have fared best in encouraging growth are those that have stability and good governance, and have capitalised on economic opportunities as well as the skills and talents of their citizens.

Making the best use of regional approaches such as those under the Pacific Plan, while tailoring these partnerships to the specific needs of individual countries through their own national development frameworks, is key to success. Encouraging greater donor coordination in-line with these regional and national strategies was a focus of our efforts in 2006-07, and will continue to be so.

The international community, particularly Australia, has a critical role to play through its aid program. Aid can have a catalytic role in larger Pacific countries and can be a source of predictable resource flows in smaller Pacific countries. It is an effective means of reinforcing reform in strong policy environments as well as encouraging reform in weaker policy environments. Government ownership and leadership of national development and donor coherence and coordination is essential.