South Pacific and recurring Natural Disasters

It's been a terrible few months for the South Pacific. Tonga has been nailed twice - first in a national tragedy resulting from overcrowding on a leaky boat - the vessel capsized in the middle of the night and a hundred+ women and children were killed. Most of the men on board made it off in time, as they were on the top deck. Less than two months later, a monster tsunami (a 2.5m - 3.5 metre wave) ripped through Samoa and Tonga - killing hundreds and causing millions of dollars in infrastructure damage. The picture above says it all.

Remote, fragile Pacific Island countries seem to be in the same position as Indonesia - ie, always on the wrong side of mother nature. Some of my World Bank/IFC colleagues went in post-tsunami and conducted a needs assessment to determine how best to rebuild? Tourism, a critical industry for the South pacific, was significantly affected with a number of beach front hotels wiped out. Community leaders (Village Chiefs) are now consulting with their people to determine where to relocate, understandably, many do not want to return to the waters edge.

On a happier note, we had a great result from the recent FEMM (Forum Economic Ministers Meeting) in the Cook Islands. In late October 2009, Finance Ministers from A/NZ + the Pacific Islands endorsed two key initiatives that have taken the bulk of my time over the past three years; 1) remittances/payment systems and 2) financial inclusion/financial literacy work. Our Working Group had called for a 2020 regional ation plan (like a mini-MDG) with a number of specific goals, including halving the number of Pacific Island households without access to financial services.

The endorsement from regional Ministers is fantastic. It underscores the importance of the work we've been doing to date and signals to all stakeholders (commercial banks, MFIs, governments and donors) that more action is required in this critical area.

I'm really looking forward to rolling up my sleeves in the next 12 months! I think the work we're doing here in the South pacific on Financial Inclusion ties into other related work ongoing around the globe (South Africa, Kenya, Ivory Coast).

I attach a piece of the FEMM Action Plan below!!

FEMM 2009

Regional Initiatives to Support Financial Development

38. Ministers agreed that despite the importance of consumer protection and the attractions of regionalising the role of an Ombudsperson, the practical obstacles to it having a substantial impact mean that it should not be a priority in the immediate term.

Financial literacy and capability

39. Ministers noted the range of regional initiatives already being pursued in Forum Island Countries, largely focused on improving consumers financial knowledge and awareness (literacy), but also including efforts to improve the range of products and information available to consumers.

40. Ministers noted the research findings that suggest exposure to financial education has a persistent effect both on the likelihood of using the financial sector and on overall economic well being in Forum Island Countries, and referred this issue to Forum Education Ministers’ Meeting, who could consider the development of a regional action plan for improving the teaching of financial literacy in Forum Island Countries.

41. Ministers noted the need for developing a set of best practices to build adult financial capability and invited the MoneyPacific Advisory Group to undertake this work.

42. Ministers endorsed the proposed set of goals (that: all schoolchildren to receive financial education through core curricula; all adults to have access to financial education; simple and transparent consumer protection be in place; and to halve the number of households without access to basic financial services) to be achieved by 2020, and the need for the development of a set of indicators to assess
progress against these goals.

43. Ministers acknowledged the efforts of the Coombs Declaration Working Party to develop the update report, encouraged further co-ordination of regional financial capacity building activities through the newly established MoneyPacific Advisory Group