BY LORETTA B MANELE
Growth prospects for pacific island countries like Solomon Islands is lower compared to Emerging Market Developing Economies (EMDEs).
Lodewijk Smets, Solomon Islands economist from World Bank said this in a recent interview with the media.
Regarding World Bank’s latest Pacific Economic Update on “Diminishing Growth amid Global Uncertainty: Ramping up Investment in the Pacific” report, he said one of the comparisons they make is between Solomon Islands and EMDEs.
Smets said what stands out is that the growth prospects for the pacific are lower to emerging markets.
He explained that emerging markets like countries in Africa, countries in South America and other emerging markets are expected to grow their economies more than pacific islands countries.
Smets said this should ring a bell.
“What is the issue here? How come other economies, developing countries, are able to grow more or at higher rates than the Pacific?”
Smets said the report highlights a few reasons for this.
The first one as mentioned is “lack of investment” in the pacific countries as compared to other emerging markets.
“So, in other markets, in other developing countries, there’s more investment taking place and investment leads to economic growth because there’s machinery, there’s tools, there’s new factories being set up”
Smets expressed that investment like this is good for the economy.
The second reason for the difference in growth prospects between pacific island countries and the EMDEs is that pacific countries are very vulnerable to climate disasters.
Smets said these are two important factors why growth prospects and the growth outlook is lower for pacific countries than those of emerging markets.
