World Bank Calls for More Pacific Job Access

The “greatest” potential for job growth in the Pacific Islands depends on greater access to labour markets in Australia and New Zealand.

That’s the opinion of the World Bank, in calling for more access to labour markets for the Pacific.

It is one of five key areas the World Bank is recommending for improvements to employment across Pacific Islands, including Samoa.

In its report released Friday called “Well-being from Work in the Pacific Islands Countries,” the World Bank states that Pacific countries and development partners need to “look beyond business-environment reforms.”

Business - environment reforms alone are “unlikely” to address employment challenges in smaller Pacific countries given constraints to private sector development arising from “smallness, dispersal, and isolation.”

Island economies will “never be able to achieve the scale and integration seen in larger regional economies.”

Instead, “the greatest potential for work is therefore through the movement of Pacific Islanders to areas where employment opportunities are concentrated.

“The priority for policy is to provide people from PICs with access to work wherever it exists,” states the report, referring to Pacific Island countries.

“Echoing the conclusions of earlier World Bank reports, this will require both changes in the immigration policies of the nearest large economies and careful investment in internationally transferable human capital by small P.I.C. governments.”

The ‘nearest large economies’ for most Pacific Islands are Australia and New Zealand.

Estimates by the World Bank call for a massive expansion of job approvals in Australia to bring it to the same percentage level as New Zealand, from current levels around 2,600 each year, to 40,000 a year by 2025.

“Living and working in nearby Australia and New Zealand provides a range and depth of economic opportunity far beyond what is likely to be available in small Pacific economies for the foreseeable future, given low rates of growth and limited opportunities for economic diversification.”

The World Bank report appears to abandon decades of policy advice that economic development lies with cutting tariffs and opening Pacific Islands to world markets.

It makes the point that isolation remains the main problem for developing Pacific Islands economies, with transport costs by sea remaining constant, and increasing by air.

The World Bank states that “despite innovations including containerization and introduction of the jet engine, there has been no significant reduction in shipping costs (as a proportion of the value of products shipped) since the 1950s, while air transport costs have actually increased substantially over the past decade.”

Production costs for small economies are much higher, as high as 30 percent for what the bank categorises as a “very small economy” with less than 200,000, such as that of Samoa.

Which is why labour “mobility” is so important to Pacific Islands, states the bank.

“Diaspora tourism resulting from large emigrant populations is also an important benefit to sending countries, accounting for a large share of tourism industries in Pacific countries, with 40 percent of arrivals in Samoa from New Zealand visiting friends and relatives,” states the bank, quoting a 2009 study by Scheyvens and Russell 2009.

“Remittance flows clearly can reduce income inequality and create new opportunities for the disadvantaged.”

Direct remittances make up more than 25 per cent of Samoa’s economy, states the report.

Those remittances help homeland families achieve higher income, better opportunities, improved asset ownership, including radios, televisions, ovens and cars, better savings and more educational achievement.

It forecasts a much greater potential role for remittances, rising from less than 10 percent equivalent of aid, to as much as 60 percent by 2025, if immigration policies are changed.

The report identifies but does not explain a policy gap between aid and immigration in Australia and New Zealand when it comes to using Pacific Island workers.

“Greater policy effort on the part of receiving countries is required to expand access,” reads the report.

MORE ACCESS: Cover of the World Bank report on Pacific employment, calling for greater access to Australia and New Zealand labour markets.

“Opportunities for labor mobility are heavily constrained by the immigration policies of large neighboring countries, such as Australia and New Zealand.

“These same neighboring countries allocate a large proportion of their overseas development budgets to the Pacific region with the stated aim of improving economic opportunities and living standards in the region.

“Increased policy coherence between aid and immigration policies would see a large expansion in temporary and permanent labor mobility opportunities available to Pacific people.”

This would not only represent “very cost-effective” development, but also bring economic benefits to those receiving countries, especially as their populations age, states the World Bank.

While the report does not spell out reasons for resistance to greater access to Pacific job seekers, it does outline the policy measures needed.

“International assistance is needed to support the policy and institutional improvements required for increased international mobility of Pacific Islanders.

“Institutions with responsibility for negotiating international labor arrangements need to be strengthened,” states the report.

Financial and technical support continues to be needed for agencies helping workers take part in regional or global schemes, states the report, such as divisions within foreign ministries responsible for selecting workers for participation in Australia’s and New Zealand’s seasonal worker schemes.

“Finally, ongoing aid assistance for all levels of education— including provision of tertiary scholarships—can provide a major boost to prospects for increased labor mobility through seasonal and permanent schemes.”

While focused on job access, the report also calls on Pacific governments to free up access to land to increase employment opportunities.

This builds on decades of promotion towards land liberalization, including through its Doing Business Index.

This has concerted criticism worldwide with critics describing the index as a tool for the promotion of “land grabs” worldwide, including the Pacific.

Last week, The Pacific Network on Globalisation (P.A.N.G.) attacked the index as a means of encouraging island governments to put the interests of foreign investors ahead of local land holders, including land held under custom.

"Right across the Pacific, customary land is still a key part of our land tenure system and so the World Bank's Doing Business rankings is a key means to our governments' formal policies of freeing up land and so what we are seeing now is that it is opened up for resource grab,” said PANG Coordinator Maureen Penjueli.

In America, Anuradha Mittal, the Executive Director of the Oakland Institute, quoted World Bank President Dr Jim Yong Kim as saying in 2013 that, "The World Bank Group shares these concerns about the risks associated with large-scale land acquisitions."

However, she said, “since then, the organisation he leads has worked even harder to deprive the developing world of its agricultural assets and heritage for the benefit of foreign agribusiness.”

The International Land Coalition, a global monitoring organisation of 152 organisations from 54 countries, estimates that 500 million acres in large land deals were signed between 2000 and 2010.

“This number is expected to be much higher by now,” states Ms. Mittal, in an opinion piece. “That's a problem, given that family farmers account for 80 percent of all land holdings in Africa and Asia and provide about 80 percent of the developing world's food,” she said, quoting figures from IFAD, the International Fund for Agricultural Development.

“If they become dispossessed because their governments are trying to curry favour with the World Bank, they may lose their livelihoods and their ability to provide food for the globe.”

In the report on Pacific employment, the World Bank confines its references to land usage to urban areas, which it identifies as a potential strength, if well managed.

“Measures that provide formal recognition of landownership and transactions in squatter areas can provide vital security to new migrants and facilitate improved access to finance when property rights over land can be used as collateral,” states the bank.

“Reforms to land administration in urban areas, where land has typically been alienated from traditional ownership, can often be implemented without undermining collective land ownership systems in rural areas,” it states, quoting a 2008 AusAID report, Making Land Work: Reconciling Customary Land Tenure and Development in the Pacific.

SAMOA NUMBERS* 
More than 80 percent rural-based, the highest in the Pacific, shrinking to 60 percent + by 2050 46 percent men aged 20 to 24 unemployed 42 percent women in labour force, versus 78 percent for men 85 percent growth in 15 to 24 year olds by 2020 50 percent of seasonal worker scheme places taken up by Samoa and Tonga * Some figures estimates based on World Bank graphs.