Address by The Hon Alexander Downer, MP, Minister for Foreign Affairs, to the Fiji Australia Business Council, Suva, Fiji, 19 August 1997.
Introduction
I am delighted to have the opportunity to address the Fiji Australia Business Council (FABC) here in Suva
. I acknowledge also representatives of the Australia Fiji Business Council who have travelled to Fiji to be here today
It is very gratifying to see increased links between Australian and Fiji business people. Enhanced links between business people provide a sense of community and contribute to the development of private sector linkages and to economic growth
. a case in point was the recent successful trade mission to Fiji organised by the Queensland Chamber of Commerce & Industry.
Building on the strong and extensive connections which already exist, I would like to see greater contact between business people across the region, as well as enhanced links between professionals, academics and, community and sporting groups
- the lead-up to the Sydney 2000 ``Pacific'' Olympic and Paralympic Games will provide an important opportunity for increased contact.
The joint business councils have been a driving force in expanding two way trade and investment between Australia and Fiji
. two way trade alone between our two countries has risen by 27 per cent since 1995, to nearly $800 million in 1996- if services trade is included, trade between our countries would exceed $1 billion.
The Pacific island region and the regional agenda is one of the Australian Government's major foreign policy priorities - Australia is committed to helping island governments implement their regional reform agenda, and in this way stimulating the growth and diversification of the private sector.
Australia values very highly its relations with Pacific island countries. All the countries in the region are important partners for Australia, not least as partners in the South Pacific Forum. Our concerns for the future are shared by the countries of the region with whom we have strong historical links, a common Pacific heritage and a very broad range of common interests.
Australia has given high priority to the Pacific islands region in the allocation of development assistance
. despite our tight fiscal circumstances, Australia assistance to the region in 1997/98 has been maintained at 1996/97 levels- amounting to nearly $450 million including South Pacific countries and Papua New Guinea- the regional allocation for policy and management reform assistance was further increased to $11 million
. this is in addition to defence cooperation funding of $36 million in 1997/98.
The recent independent Simons review, to which the Government is currently considering its response, also accorded high priority to the Pacific islands region
. it highlighted the particular development problems of small island states.
Today, I would like to discuss further Australia's approach to the Pacific islands region. I will:
1. Discuss recent political and economic developments in the region
2. Outline, from the Australian perspective, the challenges and opportunities facing the region
3. Talk about the ways in which Australia and the island governments can work together to meet these challenges and take advantage of these opportunities
Part 1: Recent Political and Economic Developments in the Region
Significant developments, both political and economic, have taken place in the region since my last visit in December 1996
National elections have seen an orderly change of government in Papua New Guinea - a testament to PNG's robust democracy
I have been encouraged by developments on Bougainville - the New Zealand sponsored talks at Burnham by the various Bougainvillian factions in July were a major step towards peace and reconciliation on the island
. the subsequent announcement of the cease-fire on Bougainville and the return of the PNDGF hostages was an important step in the long road towards the development of a credible peace strategy for Bougainville. I am pleased New Zealand has played a constructive role in hosting these talks
I will be visiting Papua New Guinea in the near future. While there I will emphasise that Australia will work to pursue a close and productive relationship with the new administration. In particular
. we would like the new Government to continue with the economic and structural reforms undertaken by its predecessor- continuing involvement of the IMF and World Bank in the reform process is the best way of ensuring sustainable economic and social development in PNG;. we will also encourage the new Government to commit itself, early in its term of office, to a credible and consistent peace strategy for Bougainville, noting that the Australian Government remains committed to a peaceful resolution of the Bougainville conflict.
I am glad, during this visit to the region, to have had the opportunity to visit Vanuatu
I came away impressed by Vanuatu's commitment to the Comprehensive Reform Program (CRP), which has been formulated through a process of extensive community consultation, and which has now moved into its implementation phase
. Australia has pledged substantial funding through AusAID's regional policy and management reform fund, to assist with the implementation of the reform program in areas such as public sector restructuring, financial and economic management, legislative drafting and health planning.
I would also congratulate all those involved in Fiji on their achievement in reaching an outcome to the constitution review which is acceptable to all ethnic communities in Fiji
. I know there were many parties involved and that they all played a significant part, but I particularly want to pay tribute to the Prime Minister Rabuka and to Opposition Leader Reddy- their vision and leadership, and their spirit of cooperation, has played a pivotal role in bringing about an outcome which has wide community support. This wide support was demonstrated by the bill being unanimously passed by both houses of parliamentAustralia also hopes that a resolution can be found to the land lease issue
. favourable outcomes on the constitution and this issue should do much to reduce the uncertainty that has inhibited investment and business activity in Fiji.
Fiji is well placed to encourage increased trade and investment, given its range of human and natural resources, its central location with respect to regional transport and trade and its significance as the site of various key regional bodies, notably the Forum Secretariat and the University of the South Pacific.
I also wish to place on the record that Australia supports the return of Fiji to the Commonwealth, and that I have offered the Government of Fiji any assistance we can provide which will help Fiji achieve its goal of renewed membership.
Australia and Fiji are important partners in the region. As partners in the South Pacific Forum, we have shared concerns. We have strong historical links and common current interests.
The recent regrettable incident involving the publication of controversial material will not change the importance, nor I trust the closeness, of that partnership.
Indeed it was unfortunate that the media attention in Australia over briefing material sidetracked attention from what was a very successful Forum Economic Ministers' Meeting (FEMM) in Cairns last July
. Let me repeat once and for all that the media reports and comments do not reflect the views or attitude of the Australian Government, nor Australian Government policy towards island countries. the feedback I have received so far about the achievements of the FEMM from regional leaders has been very encouraging and positive.
The FEMM was particularly significant, given the adoption by Ministers of an Action Plan on economic and institutional reforms aimed at increasing investment transparency; rationalising tariffs and facilitating the flow of trade; improving the operating environment for the private sector; and increasing the accountability of public institutions.
I think it likely that the Action Plan will be endorsed by Leaders at the forthcoming South Pacific Forum at Rarotonga.
This brings me to the second part of my speech, an outline of some of the opportunities and challenges facing the region
. particularly in this environment of rapid technological change, the integration of the international economy and economic restructuring brought about by globalisation
Part 2: The Challenges and Opportunities facing the region
The major challenge for countries in the region, including Australia, is to set in place good economic fundamentals, particularly sound fiscal policies in order to take advantage of the enormous growth in trade and investment in the Asia-Pacific
. if we are to meet this challenge, none of us can afford to rely on inward looking policies of protectionism and import substitution to the exclusion of more outward-looking policies. this should be closely linked to the process of trade and investment liberalisation currently taking place in the WTO and regional bodies such as APEC.
Some of the specific difficulties confronting many Pacific island countries, and these have been highlighted before, are:
. declining trade competitiveness, particularly as a result of loss of margins of preference, falling commodity prices, and changes in the structure of world trade and development;. the paucity of good and comparable data to support policy advice and development;
. the unsustainable development of scarce natural resources; and
. difficulties in influencing international opinion and behaviour in the interest of island countries
. and falling levels of investment, particularly given the lack of transparent investment policies in many regional countries
- private sector investment in the region is generally low
- the region is unable to attract significant levels of foreign direct investment.
In many respects, Forum Leaders seized the initiative at Brisbane in 1994 and laid the ground work for tackling these issues. At the Majuro Forum last year, Leaders agreed to:
. hold regular meetings of the Forum Economic Ministers (FEMM) to discuss the implementation of the agreed Action Plan. strengthen the policy role of the Forum Secretariat
. develop quickly and publish investment policy statements which will accord closely with criteria developed in the APEC Investment Handbook
. pursue domestic policies which facilitate the development of the private sector, including by reducing public sector costs as necessary
. promote the development of clearly defined goals; and
. enhance the region's ability to respond to globalisation and the multilateral and regional trade agenda, particularly developments in the WTO and APEC.
The recent FEMM took this process further, by agreeing to an action plan for sustained economic growth in the Pacific region.
Allow me to outline the key elements contained in the Action Plan and to comment on why they are essential to long-term sustainable economic growth. They include
. first, the development and implementation of comprehensive national economic reform strategies. second, the adoption, at a whole of government level, of a set of principles of `best practice' for public accountability, based on the concepts of openness with government information and public scrutiny of the performance of governments and public officials
. third, the pursuit of open, liberal and transparent investment policies, consistent with APEC non-binding investment principles
- while these principles are non-binding, they are nevertheless valuable indicators for countries to strive towards
. fourth, the rationalisation and progressive reduction of tariffs, with the aim of removing the adverse effects of tariffs on our economies, while recognising the special circumstances of some of the smaller island countries. This would also involve the adoption of policies to meet the changes in world trade, and amend to the extent practicable, domestic measures consistent with WTO and APEC principles and obligations.
The task ahead is to translate words into action
. the South Pacific Forum meeting in the Cook Islands in mid-September will be an important opportunity to help countries develop national economic reform strategies (as agreed at the FEMM) and encourage implementation by the 1998 FEMM
These new measures will create a much more favourable environment to attract foreign direct investment to the island country economies.
To their great credit several Pacific island countries have already undertaken comprehensive and politically challenging reform programs
. within the last two years, PNG, Vanuatu, Samoa, Tonga, the Cook Islands, the Marshall Islands and the Federated States of Micronesia have all embarked on comprehensive economic reform programs with donor support coordinated by international financial institutions. Several other countries in the region have been engaged in reforming aspects of their economies and government structures for some time, and have made impressive progress- as I witnessed during my last visit to the region.
With respect to Fiji, the extent of Fiji's private sector stands it in good stead for the further implementation of policies designed to enhance the role of the private sector in economic growth
Fiji and other Pacific island economies are already well advanced down the path of reforms agreed at the FEMM as necessary for economic growth and job creation. But the world is moving on quickly, so there is no room for a slackening of the pace of reform
. Australia is mindful of this and the present Government is maintaining the pace of reform of the Australian economy.
Australia stands ready to assist Fiji and other Pacific island countries in areas which will help to create sustainable economic growth and to improve employment opportunities. Our development cooperation program is already assisting in this area, and we are ready to listen to ideas from Fiji and other countries about areas where we could assist further
As agreed during my visit to Fiji last year, officials from both countries are examining existing bilateral trading arrangements to identify areas where there could be improvements, especially in the area of removing impediments to the further development of bilateral trade. Officials are making progress towards recommendations to be made later this year.
I should, however, say that their consideration does not include a lowering of Rules of Origin requirements under SPARTECA, nor does it include a change to using substantial transformation as the measure of origin. Changing the Rules of Origin will not assist Fiji's TCF industry to become globally competitive in the long term. The substantial transformation issue is very complex, and can not be considered until the World Customs Organisation has completed its work on the issue.
In addition, I must point out that the Australian Government will be making decisions on our TCF industry policy later this year in response to the report of the Australian Productivity Commission, so it would be premature to make related decisions until that response has been decided.
Part 3: How Australia and island countries can work together to meet these challenges
Many regional leaders are, understandably, concerned about the impact of globalisation on their countries' economies and social structures
. no economy is immune from the full impact of global competition and thus from the painful process of adjustment- the results so far have been mixed - some economies are booming while others are languishing
The challenge for many developing economies, and this includes Pacific island countries, is to implement policies that will enhance the benefits of globalisation, enhance economic performance, and minimise the risk of being marginalised.
Australia continues to be strongly committed, both at a bilateral and multilateral level, to doing what it can to assist the Pacific island countries to adjust to the challenges they are now facing
In doing so, we of course recognise that some of the smaller, more isolated countries face particular challenges and have particular constraints
In the economic area. Australia is happy to play and is playing a constructive role in assisting regional countries in the implementation of public sector reforms, including the strengthening of accountability structures, and the development of more transparent policy frameworks for trade, investment and private sector growth.
. Australia has strongly supported economic reform in the region, initially through its chairmanship of the Brisbane Forum in 1994 and since then at a political level, through regional and bilateral contacts, and at a practical level through financial and technical assistance to reform programs
- Australia has also worked closely and productively, not only with regional countries, but also with other donors and multilateral banks in assisting the implementation of structural adjustment programs in several countries.
- At the FEMM the concept of a South Pacific Free Trade Area was raised. I consider this to be a worthwhile idea, but it will require further consideration by regional countries. In order to help move this process forward, I have asked the Australian aid agency, AusAid, to commission a study to examine the costs and benefits for individual Pacific island countries, as well as Australia and New Zealand, of a regional free trade arrangement. Australia is concerned that the free trade area be to the benefit of all countries. If implemented it could be a useful mechanism to bind countries of the region more closely together.
. A critical factor in the economic development of Pacific island countries is the management of natural resources. For many island countries, the sustainable exploitation of natural resources, mainly forestry and fisheries but also minerals and energy resources in some cases, provides the most significant opportunities for economic advancement.
- Australia assists natural resource management through support for the work of regional organisations, notably the South Pacific Commission and the Forum Fisheries Agency, as well as bilaterally
- Australia has also actively encouraged Forum members to manage their forests sustainability
- Forum countries with substantial commercial forest industries have set out to develop the regional Code of Conduct on Logging Practice adopted by the Brisbane Forum
- I welcome the progress that has since been made in implementing national forest management policies that are consistent with the Code.
There are also other areas in which Australia and Pacific island countries can cooperate to meet future challenges . These include
. security issues, particular those of non-military nature including the breakdown of law and order, criminal activity and money laundering. These problems are in many respects linked to the lack of transparency and accountability in public policy making and the lack of transparency in regulatory arrangements- Over the last few years, Australia has done substantial work to help develop regional law enforcement networks and to assist Pacific island countries to manage challenges to their security more effectively
- As a signatory to the Honiara Declaration, agreed on by leaders at the 1992 South Pacific Forum to improve regional law enforcement cooperation, Australia is committed to encouraging island countries to put in place, and implement, appropriate legislation to counter money laundering, financial crime, and other organised criminal activity
: it was a positive sign that at the recent FEMM ministers agreed to convey to Leaders their grave concern about undesirable financial activities in the region and recommend that they adopt consistent legislation and administrative procedures across the region.
- the Forum's Regional Security Committee recently highlighted the lack of progress in many countries in developing and implementing appropriate legislative regimes to deal with such matters, and recommended more concerted action. I fully endorse that strategy.
I must stress, however, that Australia's engagement with the region is not purely confined to trade, investment and assistance for economic reform and good governance
. it is multi-faceted and stretches right across all aspects of the society and culture of Pacific island countries. there are above all, very strong person-to-person links which are expressed for example, in the extensive work Australia and Australians do in the health and education sectors of nearly all South Pacific countries, in sporting contacts, the contact that takes place daily between all manner of organisations and individuals, official and private, and through Pacific islanders living in Australia and Australians living in the South Pacific
. all this contact is helping develop what I would call a South Pacific community, and our futures are inextricably linked within that community
I recognise that meeting the challenges before us may be difficult, and that they may pose problems for some countries.
I recognise of course that it is the island countries which must make and implement the often difficult decisions involved
. but Australia stands ready to help where it can, because of our deep and long-term commitment to the region.
Together, we can build a better future for all of us.
Copyright Commonwealth of Australia | Disclaimer | Privacy
|
|
|