PACIFIC – July 31, 2020: 4:58pm (RNZ PACIFIC): An economist with the Asian Development Bank (ADB) says Pacific countries need to strengthen their health systems and enhance disaster resilience to prepare for future economic shocks.
The ADB released its 2020 Pacific Economic Monitor (PEM) on Thursday which shows a region wide economic contraction is expected of 4.3% this year among the 14 member countries, due to the impacts on trade and tourism.
The monitor shows tourism dependent countries like Palau, Cook Islands and Fiji will be worst hit.
A co-author of the latest PEM, Rommel Rabanal, said Fiji’s GDP is expected to shrink by 15 percent this year and Cook Islands by as much next year.
Mr Rabanal said Pacific countries need to ensure adequate measures are in place to cope with Covid-19.
“Over the longer term, countries will need to sustain efforts, not only in health system strengthening, but also broader disaster resilience to safe guard against future shocks,” he said.
“As you know, places like Solomon Islands and Vanuatu are contending with twin shocks at the moment with Covid-19 but also TC Harold.”
Mr Rabanal said the ADB is working with Pacific countries and donor partners to facilitate efforts.
He said the latest PEM highlighted the effect of the Covid-19 pandemic and the need to support health and social protection systems in the Pacific region.
The monitor began as a part of the ADB’s response to the Global Financial Crisis in 2008-2009 said Mr Rabbanal “where we saw the need for enhanced economic monitoring in the region” and he noted that the onset of the Covid-19 crisis had imposed similar conditions.
“We’ve sort of come full circle and back to the roots of the PEM,” he added.
Beyond this year’s expected 4.3 percent contraction, a projected growth of 1.6 percent is expected in 2021 but it will rely on the reopening of international borders and the subsequent resumption of tourism, labour, and trade activity.
Palau recieves ADB loan for Covid-19 prep
Meanwhile the Asian Development Bank has approved a $US20 million loan to help the Government of Palau prepare for the Covid-19 pandemic and respond to its impact on the economy.
The bank said the support would play an important role in strengthening Palau’s health sector to ensure the country was fully prepared in the event of an outbreak while also strengthening key areas of the economy that were under stress.
Palau remained free of the coronavirus but the ADB programme would help the upgrade of the country’s health sector by financing the purchase of ventilators for the national hospital, establishing a Covid-19 hotline and funding overtime and hazard pay for frontline workers.
The programme will also help finance the implementation of the government’s economic stimulus package.