Economic Recovery – Collaboration will be crucial

By Glen Craig

With the stark reality of this new Covid19 economic environment, it is dawning on many that we have no international consultants running to our assistance and we are on our own for the foreseeable future.

For Vanuatu to come out the other side as unscathed as possible, it will require a fully collaborative effort from the private sector and government.

In previous times of hardship, we have seen our neighbours, mainly, New Zealand, Australia and New Caledonia come to the assistance of the government with both supplies and technical/ people support. With border closure, this is no longer the case, and the partnership role has seen an unprecedented business response.

We have seen some encouraging signs with the private sector helping design the first phase of the Economic Stimulus Package and providing the necessary logistics and resource to assist in Covid19 community-level training and materials across the provinces. Advisory support to those most effected has come equally from organisations such as VCCI/VBRC, and communications have been steady to reassure our SME’s that they are not forgotten.

In other areas, we have seen gaps. In particular, the slow response to get vital humanitarian support to those that need it, unnecessary bureaucracy around the quarantine of supplies causing needless suffering to those that need it most and an almost blanket refusal of people resource to assistance logistically. The response to TC Harold under Covid19 has shown us everything that can go wrong when collaboration doesn’t happen. The lessons learnt from this time will be vital to our national growth and increase our ability to respond to any humanitarian event adequately.

If we have learnt anything from this pandemic, it’s the vital importance of a vibrant and sustainable tourism sector. With investment almost entirely by a private business that despite many years of chronic underfunding by the state, has been a stellar performer and exceptional significant contributor to the economy. With the loss of tourists, Vanuatu has ground to an economic standstill without this vital income. The layering of tourism cashflow right through has now become clear to all. Compare this sector to the Agriculture sector. It has struggled to grow to its potential yet and contribute anywhere near the same scale to the economy despite massive investment in the industry by donor partners and government. The lesson learnt here is visible, where the private sector is heavily engaged and taking the lead, the economy thrives as it should.

Unfortunately, rather than recognise the simple lesson of allowing the private sector to take the lead or be heavily involved in sectorial development produces results, some are instead using downturn this as an example of why more investment should be made in agriculture and less in tourism rather than consider why one sector always outperforms the other. It’s not really too hard to see the commons thread of success, that’s the private sector.

This new government has a golden opportunity to embrace this new dynamic and work with those that provide the economic engine for the country to run. Vanuatu has it all to win by promoting sustainable direct foreign investment. It should invest in attracting the biggest and best companies to bring their money and teams to Vanuatu and put them to work bringing international experience to the country and lifting that knowledge base of the Vanuatu based workforce. Rather than send our workers offshore picking fruit, we could be attracting the big industries to set up and develop business here. With those big industries comes the need to create a skilled, vibrant local workforce trained by internationally experienced personnel.

A comprehensive, meaningful effort by the private sector and government to openly share ideas and construct a pathway through these times could set the groundwork for the economic robustness of Vanuatu for years to come. While we might not always agree, and disagreements will happen, transparency will be the care.