Pacific 2020 A CONCEPTUAL FRAMEWORK OUTPUT PAPER: PRIVATE SECTOR DEVELOPMENT

Pacific 2020

A CONCEPTUAL FRAMEWORK

 OUTPUT PAPER: PRIVATE SECTOR DEVELOPMENT

Paul Holden

The Enterprise Research Institute

Introduction

Over the past 20 years the performance of the island economies in the Pacific has been disappointing. Growth has been weak, with per capita incomes either stagnating or declining. Human development indicators show that the Pacific island countries rank poorly in terms of criteria such as health and education. The private sectors in these countries are generally small, investment rates are low, and entrepreneurship is often lacking. There is still extensive state involvement in virtually every country, with poor delivery of services and high-cost, low-quality infrastructure and communications. Most prices that the average consumer faces in virtually every country in the region are high. People living in the island countries face additional problems. The social services provided are either ineffective or unduly expensive, or both. Few jobs are created, and the better educated and more entrepreneurial citizens seek better opportunities abroad, draining human capital. Domestic and foreign investors are reluctant to invest. Poverty is a hard and growing reality. In short, existing policies have failed to respond to the aspirations of the Pacific island peoples.

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