14th FEMM endorses measures to expand FICs base

28 October 2010
14th FEMM endorses measures to expand FICs economic base
PRESS RELEASE (112/10)
28th October 2010

Alofi, Niue, 28th October 2010 -
The 14th Forum Economic Ministers’ Meeting (FEMM) held in Alofi, Niue, 27 – 28 October has endorsed measures which are considered essential to expand the economic base of Forum island countries (FICs).

“We have concluded a very successful FEMM in that we have refocused the agenda of the Meeting to issues concerning the economic development of our member countries. We hope to sharpen the agenda even more when we meet next year. We agreed that FEMM is the premier forum for regional economic cooperation in the Pacific,” said Hon. Toke Talagi, Premier of Niue and Minister of Finance, who chaired the Meeting.

On the overarching theme of “Broadening the Economic Base”, the Forum Economic Ministers in their FEMM Action Plan 2010 agreed to the importance of expanding the economic base given the challenges FICs face, such as small private sectors and lack of economies of scale, and this required a host of coordinated actions and vision and leadership.

The Ministers said they remain committed to national and regional actions to generate growth to improve the well-being of their people recognising the private sector as the key engine for growth.

Ministers agreed that the actions set out below are essential for FICs efforts to expand the economic base:

• persevering with reform and implementation of policies, supported by strong leadership and political will;
• pursuing reforms to create an enabling environment for private sector development;
• reforming the governance of SOEs based on commercial principles, to improve service delivery and release resources for other priorities;
• strengthening areas of comparative advantage such as agriculture, tourism, and fisheries sectors;
• identifying ways in that regional and sub-regional cooperation can add value to national level activities;
• strengthening of coordination amongst and within government and development partners;
• ensuring the important role of women in economic development of member countries is fully considered and integrated into economic strategies; and
• maintaining strong macroeconomic fundamentals.

The Forum Economic Ministers reiterated that the fisheries sector plays an increasingly important role in the economic and social development of the Pacific region. They agreed that private sector involvement is critical, particularly in the areas of processing, marketing and exports, while emphasising the role of governments in establishing an enabling environment. Ministers agreed that foreign direct investment through a competent, well resourced and credible partner provided the best prospect for development of commercial activities in the fisheries sector.

The Ministers noted that the global economic crisis placed pressure on government budgets in FICs, and even with a global economic recovery, fiscal challenges are likely to intensify in FICs, particularly as they look to increase expenditure levels in areas key to growth and poverty reduction. They said that improving revenue performance through broadening the tax base and improving the effectiveness of collections is crucial for sustainable long term fiscal strategies in FICs, and that this should take place in coordination with continued attention to improving the quality and focus of public expenditure, and making effective use of development partner financial support. The Ministers noted that appropriate taxation of natural resources, including fisheries, minerals and forestry, is important for the development strategies of a number of FICs. They agreed that individual countries adopt the best reform agenda suitable to its own context.

Ministers emphasised the importance of the Cairns Compact in driving more effective coordination of available development resources from both Forum Island Countries and development partners, to be applied to achieving real progress against national development priorities, the Millennium Development Goals and other international and regional development goals. Ministers agreed to take leadership on Cairns Compact issues and report to leaders before their meeting in 2011. They directed the Secretariat to draft a paper providing an overview of the Cairns Compact with a focus on the role of Economic Ministers and report to leaders before their meeting next year.

On public finance management in FICs, FEMM noted the key issues contained in the Roadmap for Strengthening Public Finance Management and approved it for strengthening public financial management for application as part of the tools for implementing the Cairns Compact. The Ministers welcomed Australia’s announcement of a $3 million contribution to the Pacific Region Audit Initiative (PRAI), through a partnership with the Pacific Association of Supreme Audit Institutions.

The Forum Economic Ministers agreed to the need for strategic focus and urgent action to address the management of current and proposed funding for climate change in the region, and in pursuing options for improved access to and management of climate change resources, the focus should be at the national level, and where appropriate regional and international options should be considered. They requested the Forum Secretariat, in consultation with other relevant stakeholders, including the Secretariat for the Pacific Regional Environment Programme (SPREP), coordinate the development of the options paper to explore a range of approaches that could be considered by FEMM 2011 and submitted to next year’s meeting of the Forum Leaders.

The 15th FEMM will be hosted by Samoa in July 2011.

Representatives of Australia, the Cook Islands, Federated States of Micronesia, Kiribati, Nauru, Niue, New Zealand, Palau, Papua New Guinea, Republic of the Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu attended the Meeting. Observers at the Meeting included the Asian Development Bank, Commonwealth Secretariat, Delegation of the European Union in the Pacific, International Monetary Fund, Oceania Customs Organisation, Pacific Financial Technical Assistance Centre, Pacific Islands Forum Fisheries Agency, Pacific Islands Private Sector Organisation, South Pacific Regional Environment Programme, United Nations Development Programme, the University of the South Pacific, and the World Bank.

ENDS.

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