The underside of the world woke up today to find their world turned upside down. Facebook made good on its threats, and then some. Faced with legislation that would require it to pay for sharing news content on its platform, the company didn’t just take their ball and go home. They tore the sandlot up, too.
They didn’t just block the flow of Australian news to Australians on their service. They blocked Australian news globally.
Their definition of ‘news’ was construed in a childishly literal way. Caught in the blast radius were government-run public health and safety sites, literary publications, travel sites, and a broad swathe of material by and for people in the Pacific islands.
This scorched earth strategy is astonishingly short-sighted.
Before we go further though, let’s dispense with a few arguments:
Some have argued that the Australian government’s law is nothing more than a shakedown driven by Rupert Murdoch, whose malignant silhouette looms even larger across the Australian media landscape than it does the American.
That’s partly true. It is hard to imagine the Murdoch-backed Coalition government enacting this sort of thing at anyone else’s behest. In fact, early drafts of the bill left Murdoch’s lifelong nemeses, the public broadcasters, out in the cold.
But the current legislation has the support of all major media companies, large and small, public and private. It’s also backed by the majority of Australians.
There’s no question: This FB-Bomb will be a public relations disaster Down Under.
Some say the government’s intervention is unprecedented and unconscionable. It may indeed be novel. But it’s not nearly as controversial as it’s portrayed.
Government regulation in the media sector is hardly new. There isn’t a nation in the world that doesn’t do it. Taxes are used in a number of jurisdictions to subsidise media. Calling this a shakedown is only true if you’re one of a group of internet libertarians who haven’t yet come to terms with the fact this we’re done homesteading the Noosphere. The Internet’s been staked and fenced for a while now. This battle’s between the Land Barons.
Some have claimed the Mandatory Bargaining Code is an unworkable mess. It ain’t pretty, that’s true. But it is workable.
It’s awkward, though. The whole premise that media companies should negotiate a fee with platform companies is… novel. I suppose if this were the EU, the government would have set a fee per thousand clicks and run the payments through its taxation service. That would have been a much blunter—and heavier—instrument, but more equitable. And (justifiably) likely to make the libertarian crowd bark even louder.
But here’s the thing: The bill outlines a well-defined process that enforces an even-handed and equitable approach to the matter. This lever pulls in both directions. Much moreso than a top-down tax.
In a move that Kara Swisher accurately described as ‘cloddish’, Facebook reacted to bill by reaching straight for the Big Red Button. Only a few sentences in, we’ve reached the La La La Can’t Hear You stage of the argument.
They could have targeted their anger.
The Bill requires that news organisations register themselves with the Australian Communications and Media Authority and express their intent in order to be eligible for mandated negotiation. If Facebook had simply said, ‘If you register, we will block you’, they’d be entirely within their rights.
Nobody’s questioning their right not to pay.
Instead though, Facebook grabbed a general definition of a news source from the prefatory matter in the legislation, and axed everything even remotely resembling that definition. In the process, they made it harder for millions of Australians and Pacific islanders to receive cyclone warnings and weather updates, vaccination information, bush fire alerts, and community notices. They even blocked their own media page.
Amy Remeikis adds that even the North Shore Mums group has been silenced, for heaven’s sake.
And we here in the Pacific islands are sitting here bemused. Learning once again that when whales go to war, it’s the minnows that suffer.
Facebook has a de facto social media monopoly in most, if not all, Pacific island countries. Telcos used free Facebook as a loss leader to lock users into their platforms. As a result, millions of cash-poor mobile users use the platform as their primary interface to the internet. News, alerts, current events all begin—and sometimes end—with Facebook.
Social media content is cached locally, too, reducing costs for telcos, who pay some of the highest bandwidth prices in the world. Video and image content from other sources is often much, much slower.
In the minds of many islanders, it’s just too time-consuming and too costly to load even a single web page on spec. People are so accustomed to Facebook, it’s likely that most wouldn’t even know what to type into the address bar. You may think I’m exaggerating. I wish I were. A disturbingly large number of people do not know how to use Google search. They access everything online through social media.
I’m not blaming Facebook for these problems. I’m blaming them for not caring about the damage they’re doing. They have options. There are absurdly easy ways to target a service block if that’s what they insist on doing.
But with the way they’re acting now, they’re harming millions of people who didn’t need to be harmed. As the Ms Swisher said, “In the war between whom do you like least, FB will inexplicably lose to Murdoch.”
Back in my university days, I roomed with a lovely couple. Smart, talented, unorthodox—my kind of people. And stable, too. That meant a lot. But about a year in, I felt the tension rising. I’d hear them speaking in terse undertones, then stop suddenly when I entered the room.
Finally, I had to ask. Is everything okay?
“Not really. We’re either going to split up or get married.”
I was nonplussed. How could those be the only options? How could those options exist side by side?
Now, watching the messy, all-too-avoidable spat between members—and possibly, soon to be ex-members—of the Pacific Islands Forum, I think I finally get it.
There comes a time in every relationship where you’re either all in or all out. Some people in Australia and New Zealand may think that decision belongs to the Micronesian states alone. And based on that assumption, they’re no doubt working behind the scenes right now, doing their best to chivvy the northern alliance apart. Hoping that if they can induce one state—Nauru most likely—to go back on its promise to leave, lost cohesion will drive the others back into the fold.
But the catalysing moment here was not Micronesia’s decision to leave. It was the collective drift from consensus to majority rule. It’s unfair to blame the developed members of the Forum for driving that choice. But they can fairly be taken to task for failing to understand the countless subtle reasons why consensus, not plurality, is so important to the Pacific.
If there was a misjudgment on their part, this was it. They should have known they’d be seen as the deciding—and dividing—votes.
It’s up to them now to learn this lesson, and to take it to heart. If they’re going to be truly Pacific partners, they need to adopt Pacific ways.
It’s not enough to listen, consult, and weigh what’s best for the organisation if those considerations are only made at a distance, as some sort of benefactor. They’re not there as donors, or development partners. They’re there as members. They should not dominate (and by all accounts, they haven’t here). Neither, though, should they defer.
The decision to be in or out of the Forum belongs to Australia and New Zealand as much as it does to the bloc of five.
First, though, let’s get a few things straight. If we’re honest about it, Henry Puna is by all accounts a more qualified candidate than Gerald Zackios. But as Dr Transform Aqorau astutely pointed out, if we’re basing the selection only on merit, Jimmy Stevens is the one who stands out. He’s a deft facilitator and talented administrator with decades of experience at the regional level.
We can conclude that competence was not the sole criterion, but it wasn’t absent either. Certainly, it ranked above the principle of a sub-regional rota.
Secondly, I’ve seen no evidence to suggest that Mr Puna’s selection was foisted on any individual member. Certainly not by Australia, and probably not by New Zealand.
If the Micronesians have a complaint—and they assuredly do—it’s with the Forum itself, not with any imagined interloper.
We can find fault with many of the individual players in this debacle. I mean, we’ve just witnessed our ship’s officers argue their vessel across miles of sunlit open ocean, right into the only reef in a thousand miles. There could not be a stronger argument for a clearer, more detailed and more transparent leadership selection process.
But new rules can only come once comity is restored. And that’s not something that’s going to happen in Canberra or Wellington. The last election to cause real division was that of Greg Urwin, whose candidacy was driven by John Howard. Many rightly complained about the ham-fisted manner in which it was handled. I was a newcomer to the Pacific at the time, but even I was aware of the ructions, and of the widespread perception that this was an Australian ploy to keep tabs on its Pacific neighbours.
It was Mr Urwin himself who saved the day. He did it by being one of the best Secretaries General the Forum has seen. He won his second term by acclamation, but was tragically struck down by cancer before he could complete it.
The current crisis will test Henry Puna’s mettle. It will also be a test, not just of the depth, but of the kind of commitment Australia and New Zealand are willing to make to the Forum.
As happens during any crisis, there’s a lot of pressure on Canberra and Wellington to Do Something. But what can they usefully do? They will almost certainly be cast an interlopers if they try to broker a step-down. Rightly or wrongly, it’s an age-old Pacific tradition to blame the outsider.
They can’t be just be some sort of benevolent Spirit Guide, either. They can’t pretend to be inert or neutral in this. They’re members just like everyone else.
Most importantly, they can’t cast this as an external matter. New Zealand knows this already. It has repeatedly reaffirmed its stance as a Pacific nation. And the sooner Australia quits thinking of the Pacific as a frontier, the better.
To my knowledge, Julie Bishop is the only Australian politician of note who has ever uttered the phrase ‘Australia is a Pacific nation.’ It’s not bordered by the Pacific. It’s in the Pacific.
It’s neither a passenger nor a benefactor. It’s a member. And the sooner it takes that membership seriously, the better. The sooner it learns to operate as a Pacific nation, surrounded by its Pacific peers, the better.
The answer here for Australia and New Zealand is not to Do Something, but rather to Be Something. They need to be good members. They need to treat their role as neither a sideshow nor a star turn. That means shouldering the duties and responsibilities, and wearing the results.
The sooner they accept that they’re in the Pacific, the sooner they’ll be able to do something about it.
The Village Explainer is a semi-regular newsletter containing analysis and insight focusing on under-reported aspects of Pacific societies, politics and economics.
William Francis McGarry was born on April 2, 1927 in Dublin, Ireland. His early life was lifted from the pages of a Joyce novel. His father married an older woman, a starlet from the operettas no less. It’s tempting to believe that scandal was the one they whispered about in The Dead.
Bill and his younger brother Cecil attended Clongowes College, site of the early scenes of Portrait of the Artist as a Young Man.
But Cecil, not Bill, was the Stephen Dedalus. Or rather, his antithesis. Cecil’s blazing intellect led him to holiness, not heresy. He became a Jesuit, was appointed Provincial to Ireland, and given the Sisyphean task of implementing the Vatican II reforms.
A Good Soldier of Christ, Cecil did it without demur. It cost him immensely, and sent the Irish church into paroxysms. His labour complete, he spent over a decade in the Vatican, advising the Pope and guiding his order. He spent his last years in Kenya, living in relative seclusion, providing spiritual advice to many of East Africa’s Christian leaders.
A reformer and noted ecumenicist, he did much to modernise—and humanise—an appallingly archaic Church.
Compared to that, my father was a lout.
At least, he was in the eyes of Queeny and Bill, his imperious diva of a mom, and her quick-tongued husband who deployed his wit like a lash.
Where Cecil’s intellect and achievements blazed, young Bill merely did well. I suspect it took him decades to realise that in any other family, he would have been a standout. He was smart, athletic, good-looking and hard working. A standup guy with a pugilist’s persistence.
Bill and his sister Doreen were erased. Queeny loved Cecil, and Bill Sr loved Queeny, and that was all the love there was.
He met my mother at a house party while he was studying engineering at University College Dublin. She too had distant parents. Her father had skippered a small vessel during WWI and, against appalling odds, helped kill a German U boat. He was awarded the DSO for that, and was mentioned in despatches later in the war.
Whether it was the war or something else, he checked out. He landed a do-nothing job, and spent his time fishing and playing tennis. He dropped dead on the court one day, still in his 40s. He shared the fate of countless men who returned from the fight with no visible wounds.
(Mom’s life too was overshadowed by a famous Jesuit. Gerard Manley Hopkins was a neighbour and friend to her father and his young siblings during his years as a Classics professor at UCD.)
A martyr for his mother’s love fell for a fatherless child. The two completed each other.
They were married shortly after he graduated, and took ship for Canada the next day. They turned their backs to family and home, and never returned.
The young couple lived in Toronto briefly, then moved to Ottawa, looking for room to grow. Determined to be everything their respective parents weren’t, they wanted a dozen children.
They would have had them, too. But after her eighth pregnancy, Mom was told that the next one would kill her.
So we adopted instead.
Dad rose as people used to do, from lowly draughtsman to Vice President of an engineering firm.
He raised us in the pulsing heart of Canadian suburbanism, if such a thing existed. The house I was born in was built by Bill Teron, the developer who pretty much defined residential design in the ’60 and ‘70s. He also rescued much of Toronto’s waterfront from industrial hell.
I spent my early childhood years in another Teron brainchild, the show home for the brand-new community of Kanata, Ontario.
We were a model family, living in a model home. Proud citizens of Stepford.
But my father wasn’t done. Over a couple of decades of Thoreauvian endeavour, he carved a patch out of the bush, building what would become a sprawling living compound on a stony hilltop immodestly named Kincora.
That decision defined my childhood. It tied me irrevocably to the bush, inured me to the cold, left me bug-bitten, alone and adrift in an ocean of forest.
Not lost, though. I quickly learned how to find my way around. Leaving my sisters at home, I trudged along endless miles of logging road, spent entire days paddling our canoe across every square metre of three adjoining lakes.
My mom may have thought it was cute. It wasn’t. It was escape.
The endless days of solitude were punctuated each Friday by the sound of a car approaching. The place we lived was so remote you could hear a car coming literally from miles away.
My father had us hauling, digging, cutting and hammering pretty much from the moment we were able to hold a tool. His return from the city each Friday meant an end to aimlessness, and the start of a dawn to dusk parade of chores.
He’d pull up with the station wagon (of course!) full of sheetrock, timber, plaster, nails, food supplies, fuel for the chainsaw, joints, fixtures… it was uncanny how much stuff that car could hold.
From the moment of his arrival, the work began. All the materials had to go up the hill to the house. I still recall struggling to balance a sheet of gyprock taller than me, feeling it burrowing inexorably into my fingers, praying I didn’t crumble a corner on the stony trail.
I don’t know what bred my aversion to that work. I’ve never shied from labour.
The more I think about it, the more I realise my aversion was to him. I’m ashamed of that. I was then, and I am today.
The crushing inevitability of my dad’s arrival was always almost too much. More than once, I ran and hid in the bush, pretending for a while to be too far away to hear him bellow my name. Didn’t do me a lick of good, of course. I’d just get a solid smack or two, and still have to do the work I dreaded.
What he achieved over the years was a monument. He turned an un-insulated one-room plywood box into a sprawling year-round home, with outbuildings, a private lane, and an expansive deck down on the lakeside 150 metres distant.
I had a hand in much of it. I don’t feel proud of what we did, because it was his achievement. His in a way that excluded you. But I know—down to the nail, I know—the measure of the effort.
The man could not stop. He built our first set of living room furniture. He built our toy chest, and the building blocks inside. He built our bunk beds. He built our counters. He cut the wood for the fire. He built the bloody road to our door.
He built and built and built. And I hated him for it. His devotion to the idea of a perfect family home poured out of him. It raised timbers, hewed rocks and razed forests. He was a vessel of devotion, hollow inside.
By the time I was 12, I was spending every weekend with him, renovating a house in the city that would become our home. We ripped the guts out of the place, and floor by floor, made it into a spacious, luxurious residence.
I earned a dollar a day.
I earned that dollar.
He knew I was smart, and he fostered my learning. I was reading the classics at home at age six. He never pressed or prodded. He just gave me what my mind required.
I cannot count the nights I strained to see the type as dusk brimmed over the hill, and turned the page toward a west-facing window to catch the last light of the sun.
If I’m a writer today, it’s because of him.
I still don’t know what broke us as a family. I don’t know if any one thing did.
But I know it wasn’t him.
I could itemise the screaming fights, the blows, the misery overlaid with propriety and perfect manners, like ice above a drowning man. I could write, and re-write, and even on the fortieth draft, there would still not be a point where you could say, ‘There. Right there. That’s what he did.’
But every one of us emerged from that household gifted, driven, blazing fiercely with the fire of their own unique self-destruction. We were athletes, experts, artists—sometimes all three. All destined to fail.
We’ve all survived so far. Physically. Each of us cramped and broken in their own way, handing down the double gift of misery and devotion.
We can’t even win at tragedy.
Collectively we’re a cracked idol, a torn and smoke-stained testament lying in the dust behind the chancery.
We did everything right. We got everything wrong.
Bill never emerged from the shadow of his younger brother’s saintly genius. But he was merciless. He whipped his desire for mastery into shape, and made it serve him.
He left his engineering firm in the ‘80s at the top of his game. His work had taken him from Kenya to Iqaluit to the coal mines of Sydney, Nova Scotia. Twice he won North American awards for excellence in design. I found the certificates beside the furnace.
He was hired as an alternative energy advisor by the government of Canada. He knew what the world would need before most of us did. Then, almost to the day of his non-compete agreement lapsing, he took a golden handshake, left the public service, and set himself up as one of the premier insurance investigators in the business.
Like his father before him, he only became happy after the weight of raising a family was lifted. He was in his sixties when I first saw him really smile.
It was too late for me by then. Our hopeless tangle of devotion and revulsion was too deeply enmeshed. His battles may have been mostly behind him, but mine weren’t.
I was fighting depression and an inherited sense of anguished worthlessness that I still struggle to withstand.
One day in my mid-thirties, in the latter half of an extended car trip, driving back over the Rockies to home, I realised I was happy. At first I didn’t know what I was feeling. It had never happened to me before.
The most liberating moment of my life was the bitterest: I knew right then that if I wanted to be free, all I had to do was drive away.
That was over 20 years ago. I didn’t just keep driving. I crossed an ocean too.
I’ve found happiness here on the other side of the world.
And if I’ve found it, I learned that from him too.
I don’t build things for my children. That would be cruel. I give to them instead. I try to show them every day that they’re loved, that we may struggle but they will never want. That they matter. That they matter to me.
But I do make things. I can’t stop. I make and I make and I make. I can’t be a person unless I’m making something. Software, photographs, music, videos, stories—it doesn’t matter. As long as I don’t stop.
I try not to think too much about what keeps pouring out of me. I guess my old man didn’t either.
My dad died last night. It was cancer. He’d lived to 94. From what I’ve heard, he was ready to go.
I thought a lot over the last few years about returning, trying to reconcile. But honestly, I never felt I had to. I knew him pretty well by the time I left, and I like to think he knew me too.
I like to think he saw himself in me. The way I turned away, and forged a home from nothing.
And like him, I’m still building. Always building. Relentlessly, helplessly, hopelessly building.
Cecil’s endless grace and Bill’s endless drive are most of what made me whatever this is—this slack-jawed lump of flesh and sentiment, poking at a keyboard, frog-marching a procession of characters—walking shadows, signifying nothing—across a screen in a vain attempt to fill the space of this cavernous loss.
I had a father once. He was a terror and a perfect man.
I had a father. And now I never will.
The Village Explainer is a semi-regular newsletter containing analysis and insight focusing on under-reported aspects of Pacific societies, politics and economics.
The year 2020 will go down in history as one of the worst since the end of WWII. Global economic shocks, pandemics, the rise of totalitarian regimes and the political disintegration of a superpower were all played out against the backdrop of the increasing and unabated progress of climate change.
Help may be on the horizon for COVID-19 and the economic suffering it brought, but there’s no reason to believe that 2021 will mark the end of our pain.
We need to be prepared for a long slog.
The Global Economy
Not since 1870 have so many countries seen their economies shrink. The World Bank reports that advanced economies will likely have shrunk by 7 percent by year’s end. Emerging and developing economies are expected to have contracted by 2.5 percent. That would make 2020 the worst for them in 60 years.
Shipping, travel, air and international land transport have all experienced massive disruptions. Not only are people buying less, it’s taking longer to get goods of all kinds from one place to the next.
Ongoing trade wars and supply chain disruptions are also contributing to a dismal outlook, the World Bank says.
The best-case scenario for the coming year is a return to relative stability in international relations, and a concerted international effort to eradicate COVID-19 and relieve the restrictions that the pandemic has imposed on us and our economies.
If that happens, the World Bank estimates a modest growth rate of 4.2 percent.
But this isn’t certain. International and domestic stresses may make things worse before they get better. Debt distress could set in, domestic policies and freedoms might not bounce back. Trade restrictions and international tensions could continue, or even worsen.
Developing countries are especially vulnerable to these risks. One forecast suggests that the impact of global recession alone could result in a contraction of as much as 6 percent. The downside could be almost 9 percent for the worst affected.
Vanuatu’s Economy
The impact of the COVID-19 crisis on Vanuatu’s economy is hard to know with any certainty. The Department of Finance and Treasury’s monthly financial reports have been unavailable since March, and no formal economic summary has been provided since the mid-year report in August last year.
Finance Minister Johnny Koanapo offered some insight into GDP impacts and outlooks in his budget speech to parliament in November, but questions have been raised about the validity of the GDP estimates and projections. Mr Koanapo’s numbers did not match the numbers in the mid-year report, and his projections are based on assumptions that are unlikely to come about in the year ahead.
The 2021 budget narrative document is expected any day now, and when that is released, it will contain accurate revenue and expenditure information for 2020.
In the Pacific as a whole, the Lowy Institute is warning of a ‘Lost Decade’ due to the pandemic. The impacts are so severe, the report argues, that without support and assistance, the human and developmental deficit created last year will burden us for a generation.
The Lowy paper suggests that a large-scale debt forgiveness programme could help. Vanuatu is better positioned to handle its existing debt, and performance in recent years has exceeded expectations.
The Finance Minister’s assurances that Vanuatu will recoup its losses in a year seem optimistic. He’s not the only one to say so, though. The IMF’s 2021 projections for Vanuatu are more pessimistic, but they too appear to believe that a V-shaped recovery is likely.
Travel and tourism may re-open in the coming year, but that almost certainly won’t happen in the first half of the year. When things will return to normal—if they do at all—is anyone’s guess.
Economic Priorities
Agriculture will remain a focus area as the country seeks to re-base its economic activity to place prosperity in the hands of agriculture workers. There’s a lot still to be done.
The recent pilot project to export taro to New Zealand has still to prove itself. Money exists for at least one more go-round, so time will tell if bulk root-crop exports will prove sustainable.
The Ministry of Agriculture will need to become a lot nimbler if it hopes to avoid a repeat of the debacle that saw farmers stuck with tens of thousands of ripe pineapples and no one to sell them to.
Efforts to rebase the coconut economy on more high-value products (such as virgin oil) are commendable, and arguably easier to sustain, but until global trade and shipping normalise, it’s hard to see how people will make a decent living, let alone thrive.
Other commodities that had seen growth in the past, particularly kava, will likely see a small rebound in the next 12 months, but again, until shipping and trade flows regularise, it’s hard to imagine growers and exporters doing more than treading water.
Fiscal/sectoral intervention will continue, but will be paid mostly from unspent funds from 2020. Finance was overwhelmed by demand during the first rounds. It’s not clear if they’re better provisioned to handle the increased workload for another year.
This is cause for concern. There is evidence that unemployment has risen steadily all year, and that economic hardship is biting deeply into urban households. Job announcements that might have received half a dozen applications in the past are seeing ten times that many today.
Without significant intervention, the number of business failures could jump sharply in the next 9-12 months. There’s not a single business owner in the country today who isn’t worried about the future of their business. Most will be confident about surviving, but a disturbingly large minority are facing an existential crisis.
The knock-on effects of a cascade of business failures seems to be too sensitive for policy makers, who are trying to keep a brave face. If contingencies do exist, they’re not sharing them.
Public Income
The EU, Australia and now China have all announced budget support measures in the form of grants. All told, external development assistance will reach nearly VT 20 billion this year. This will backstop waning tax revenues and provide a degree of confidence as the government continues its ambitious infrastructure rollout.
Citizenship by investment programmes continued to cook along in 2020, with an estimated VT 12 billion in revenue for the year. This represents roughly 70 new approvals every month.
How this compares to VAT isn’t entirely clear. Days before this went to press, Customs & Inland Revenue released a chart showing monthly revenues to the end of 2020.
Using a bar chart showing tax revenues for 2019 for comparison, it appears that tax revenues have dropped considerably, and they fluctuate much more than in previous years.
Beyond that, there’s just not enough data to make a firm statement.
Information Starvation
Finance’s silence is consistent with other public information services. The VNPF has not responded to repeated requests for member numbers and contribution rates. The National Statistics Office latest trade reports date from December 2019.
As things stand right now, it is nigh impossible for members of the public to know the current state of our economy.
Information keeps changing. July’s Half Year Financial Update report stated that GPD growth in the first half of 2020 was 0.6 percent, but when Finance Minister Johnny Koanapo addressed Parliament in November, that number had been revised to -4.1 percent. The growth forecast for 2021 was 4.0 percent in the Half Year report, but by the time the minister spoke, it had reached 5 percent.
The International Monetary Fund appears to contradict both of them, forecasting a -8.3 percent contraction in real GDP for 2021. The IMF’s models overestimate tourism’s role in the economy, and the Fund wasn’t able to conduct an Article IV review last year, due to the pandemic.
But even allowing for a relatively large waffle factor of 3 percent, the IMF’s forecast still seems more plausible.
In the face of unprecedented crisis, no one wants to be the bearer of bad news. But with the economic health of the nation at stake, openness and transparency are needed now more than ever.
Predictions
Tourism
The hole is deeper and wider than anyone thought it would be. Australia’s top health officials are now saying they doubt their borders will re-open this year. That means near-zero incomes for many operators.
Without more fiscal intervention and a much more concessionary financial environment, international chains actors will be forced to make hard decisions about their global operations. These could impact hundreds, even thousands of livelihoods, directly and indirectly.
Locally-owned up-market resorts may be better positioned to weather a prolonged drought, because their community ties will help them and their employees to work together to ensure their collective survival. But this has to be weighed against chronic cash flow, staff, and supply chain management challenges they face. Without help, it’s likely that some of our greatest local success stories won’t survive.
Boutique operations, especially beach-side attractions and guest houses, will be more resilient, but the massive cost of two consecutive dry years might be enough to dissuade them from re-opening. If their priorities change, they may change permanently.
The knock-on impacts on education, nutrition, sanitation and healthcare are considerable. Without a significant investment in community level social services, 2021 could bring real hardship to parts of Sanma and Tafea, as well as rural Efate.
Agriculture
A rebasing is underway to enlarge the role of agriculture in the national economy.
Despite a number of good ideas and a clear goal, an actual strategy has been slow to emerge. Early plans haven’t adapted well to the pandemic.
Nonetheless, continued inflows of domestic and donor support will make agriculture more attractive to many Ni Vanuatu than any other activity. With employment likely to drop drastically, we may see more peri-urban and rural land on Efate placed under cultivation than ever before.
Santo is best positioned to benefit from increased commercial farm activity, with Malekula and Tanna not far behind.
In the face of a piecemeal rollout, those with the most entrepreneurial spirit will be the most likely to prosper.
Travel/Transportation
Heaven help Air Vanuatu.
The airline has suffered mostly in silence since the beginning the pandemic. In hindsight, its ambitious expansion plans could not have been timed worse.
The knock-on effects of the 2018 ATR crash have gone largely un-noted, but the airline’s decision to scapegoat the pilot rather than address the institutional issues that resulted raise serious concerns about its ability to manage even its domestic fleet.
Even before domestic travel restrictions and cyclone Harold threw its inter-island service into a cocked hat, the airline was already under capacity, facing chronic scheduling problems and rising passenger dissatisfaction.
Their newly selected CEO is an old hand. Whether this is the talent the airline needs to avoid an existential crisis remains to be seen.
The potential impact of a failed airline on the national economy is enough to make even the most cold-blooded observer flinch.
International shipping will continue to suffer from global interruptions, and air cargo is almost non-existent. VAT and excise revenues will therefore be extremely volatile for the rest of the year at least.
Domestic shipping and local land transport have covered some of Air Vanuatu’s decline. But lack of regulation is raising real health and safety concerns. One local passenger liner was spotted traveling in reverse with visible flames spouting from its stacks. No enforcement action was taken.
The widespread increase in rural road quality is opening up real opportunities for land transport operators across the country. Improved access to markets is helping farmers nationwide. This is one bright spot in a gloomy year ahead.
Industry & Construction
Small-scale alternative energy generation will continue to grow, fostering a cottage industry in provision and rollout.
Hardware and residential construction in Sanma and Penama provinces will continue apace as these provinces slowly emerge from the chaos of cyclone Harold. School and health centre reconstruction projects will benefit local contractors for years to come.
Nationwide, we should see significant activity as the country’s ambitious infrastructure buildout continues. The degree to which contracting and procurement remain unmarred by graft will be a major determining factor in the impact of these projects on the nation’s economy.
Overall
The coming year will be as hard, if not harder, than 2020. Without major sectoral and financial intervention, those whose plan was just to survive until the new year will be facing a major gut-check. The calendar has rolled over, but nothing’s changed.
Given what we know about the state of affairs globally, regionally and nationally, it’s hard to be optimistic. If we can generate more of the grit we found to survive 2020, we will make it through.
Last year was a write-off. This year may be too. All our time and energy right now should be focused on avoiding what the Lowy Institute calls a Lost Decade.
The Village Explainer is a semi-regular newsletter containing analysis and insight focusing on under-reported aspects of Pacific societies, politics and economics.
