Author: Aaron Batten

The recommendations of the recently completed Growth Commission funded by the World Bank and led by Nobel laureate Michael Spence have been the subject of considerable debate – and by some authors ridicule. But for all its limitations, the Commission did make some important commentary in particular on the development challenges facing small States such as those in the Pacific and how progress might be made.

The Report highlights that some small states have been successful in pooling their efforts and outsourcing public services (with the help of IT advances). The Central and West Africa region, for example, relies on multi-country central banking, as does the Eastern Caribbean. The Eastern Caribbean has also managed to develop a single telecommunications authority and a united Supreme Court, which covers eight independent states.

Sadly, these examples are in very stark contrast to the small states of the Pacific, which possess in various forms many of the institutions typical of a large country – embassies abroad, central banks, regulatory authorities, multiple tiers of government etc. – which are expensive to run. To an extent, Australia bears much of the responsibility for the emergence of these institutional structures within the region (particularly in Melanesia), but domestic politics has now embedded them as national icons and change is inherently difficult.

As a solution, the Growth Report recommends greater regional economic integration within the Pacific region, and a spreading of the burden of public services, through a type of partial political union, helping reduce the high per capita costs of effective government. A more viable long-term model for the Pacific states it proposes would be a self-governing structure in association with Australia or New Zealand.

I believe that there are a lot of merits to this type of proposal but there are questions over whether Australia, let alone the highly nationalistic governments in the region, would be willing to commit to such an arrangement.

A logical first step in the process would be the opening up of temporary labour mobility between Australia and the Pacific. This would allow a greater interaction between Australia and the region which for the last decade has seen its relationship flounder under the weight of various political animosities. In addition to the economics the most beneficial aspect of such a scheme would be to increase the limited Australian understanding and acceptance of our Melanesian neighbors.

Hopefully the Rudd Governments upcoming announcement on the potential piloting of such a scheme recognizes this.