COVID-19 is wreaking havoc to Pacific economies and those which stand a better chance of transiting the dip stronger are the economies that have made adjustments to contain the adverse impacts domestically.
We see international tourism long considered to be the most important economic driver of economic growth in the region fall to its knees. Some economies, including in Melanesia too, are making adjustments such as resetting their tourism sectors to focus on developing local and regional tourism.
In a similar vein regional trade, including Melanesian subregional trade, has slowed because of COVID-19. I see this sluggish development as an opportunity to aid Melanesian economies make the much-needed adjustments to respond to the COVID-19.
In this regard, the Melanesian countries that are members of the MSG subgrouping would do well to take a collective decision to suspend the relevant provisions of the MSG Trade Agreement to allow member Governments the flexibility to diversify their policy options for revenue generation.
It’s no secret that all MSG economies are hurting and the suspension of the relevant provisions of the MSG Trade Agreement will help a lot in expanding their domestic policy space for revenue generation which of course have been severely curtailed by COVID-19. The suspension can be commenced immediately by an “out of session” Leaders’ meeting and made to run for the next three years (or whatever timeline assessed by the Secretariat to be fitting for the purpose).
MSG could also reactivate work it had commenced previously on pooled procurement with respect to bulk procurement of pharmaceuticals. This work had been commenced sometimes back but had been shelved because of scale and storage issues. Now however the onset of the COVID-19 pandemic had made it necessary for this pooled procurement work to be continued aiming to actually unite all members to agree to pool their procurement of COVID-19 vaccines.
Finally setting up a fuel hedge farm. The MSG as a subregion is vulnerable to fuel price fluctuations. COVID-19 will exacerbate this vulnerability and it would be a responsible action for the MSG to be proactive in not only taking direct actions to confront COVID-19 but also related actions targeting containment of externalities that have been made worse by COVID-19. A fuel hedge farm is one initiative that can strengthen MSG cooperation and protect MSG economies from possible fall-outs that could affect the supply and price of fuel globally.
The roll out of COVID-19 vaccines has made it possible for the MSG to start musing an exit strategy to help members take control of the new normal which potentially is being shaped externally but can be domesticated so that the MSG can still protect their sovereignties in the new normal. The proposed fuel hedge farm can cushion any further knock-on effects that could complicate economic recovery in Melanesia.
It is good to see that a number of Melanesian countries are participating actively in the ANZX’s labour mobility schemes. This is really good as this can help with the economic recovery processes of these countries especially in offering employment opportunities that can earn income and add t5o foreign receipts of these countries. The MSG Secretariat can assist facilitate the processes by acting as a repository and dispenser of best practices that every member can adopt in preparing and deploying their job-ready-pools.
And is a Melanesia travel bubble possible? Maybe?