Poverty in the Pacific: Trends, Progress, and Challenges in the Early Twenty-First Century

Abstract

Poverty persists in the Pacific but is characterized less by standard international measures of absolute or chronic deprivation than by vulnerability and volatility. Communities in the Pacific are generally small and remote, creating challenges for the provision of basic goods and services. Their economies rely heavily on external economic relations—trade, employment, and remittances and tourism and aid—including for essential commodities such as food and energy. Among sources of vulnerability, environmental degradation, loss of biodiversity, and climate change impacts expose nations to shocks, often generating disasters which undermine the livelihoods of households. Over the past three decades progress has been made in reducing poverty and improving well-being; however, significant problems persist related to health and nutrition, access to services, employment, and livelihoods, and most countries have been slow to expand social protection systems to protect the most vulnerable. The Sustainable Development agenda offers the possibility of alternative development strategies that could favour ocean economies. However, this will require significant development assistance and investment from the international community at a time when aid budgets are coming under pressure from COVID-19. The global pandemic, with its travel, trade, and tourism restrictions, highlights the region’s susceptibility to external shocks and is reversing recent gains in poverty reduction.

1 Introduction

Poverty, broadly defined as various forms of deprivation associated with meeting basic needs, accessing essential services and economic opportunities, and participation in family and community life, is closely associated across the Pacific with insecurity of access to water, food, and energy. Given this definition and focus, we exclude the high-income countries of Australia and New Zealand from our analysis, although we recognize forms of poverty do exist there, particularly among Indigenous people.

Distinct histories, including experiences of colonisation, among Pacific Island Countries and Territories (PICTs) have shaped varied development trajectories, but in most cases the small size and remote ocean location of Pacific nations means that standard development options are limited. The region is vulnerable to environmental degradation including pollution of oceans, biodiversity loss, and natural hazards, many now intensified by a changing climate. Some Pacific states face the challenge of having few tradeable commodities or industries, while others are rich in resources (including fisheries and mineral resources) but have limited capacities to develop these. Most are thus heavily dependent economically on overseas employment and remittances and on tourism, while also relying on imports which incur high costs given the geographical distance. This external dependence makes PICTs particularly vulnerable to shifts in other countries’ economic policies and to broader economic shocks such as those accompanying the COVID-19 pandemic and its on-going consequences (World Bank 2020).

In this chapter, drawing on secondary sources and available data, we describe key characteristics and trends related to poverty and its reduction in the Pacific and discuss the structural constraints to sustained poverty reduction across an environmentally- and climate-stressed, disaster-prone ocean region. Noting the significant gaps and limitations of comparative data for many countries in the region, we present key indicators of income and multidimensional poverty, population health, and well-being where available. The chapter also reflects on how international debates around poverty, and approaches to its reduction, have evolved particularly since the 1990s, and their relevance to the Pacific context. The early literature suggests that the diverse experiences of poverty across the Pacific did not fit easily into mainstream poverty debates. Rather, participatory research projects referred to notions of ‘hardship’ in meeting basic needs among a largely subsistence agricultural population, generally managed through traditional informal kinship or community support mechanisms (Abbot and Pollard 2004; UNDP 2014; Ratuva 2005). Such understandings and indeed the experience of poverty in the Pacific appear to have shifted since the latter years of the twentieth century, driven by forces including monetization of the economy and deeper global integration, increased population pressure on limited resources, and an associated rise in inequality. While indicators of human development improved overall during the era of the Millennium Development Goals (MDGs) from 2000 to 2015, progress towards meeting the Goals and targets was generally mixed (PIF 2015), and subsequently appears to have slowed as nations are challenged by geography and remain vulnerable to economic, climatic, and other environmental shocks. For the most part, PICTs have been relatively slow to expand systems of social protection that can mitigate individual or household insecurity and reduce severe poverty.

At the same time, PICTs along with other Small Island Developing States (SIDS) played an important role in the negotiations for a post-2015 development agenda. Recognizing that their future depends on the protection and sustainable use of natural resources, particularly in relation to oceans, they ensured such concerns are better reflected within what ultimately became the 2030 Agenda for Sustainable Development, comprising the Sustainable Development Goals (SDGs) and agreements on climate change and development finance. For the first time a global development agenda explicitly addresses the unique environment of ocean economies, through Goal 14 which commits to ‘conserve and sustainably use oceans, seas and marine resources for sustainable development’, along with the particular climate-related risks they face and the responsibilities of the global community in mitigating and addressing these risks (Goal 13). Various means to strengthen implementation through partnerships are also explicitly identified through Goal 17, including to finance, develop capabilities, and transfer technologies. This more holistic development agenda potentially marks a significant step forward in addressing the intersecting social, economic, and environmental challenges that drive poverty and insecurity in the Pacific region. In particular, the critical nexus around water, energy, and food addressed in this volume and elaborated further in Chap. 16, will be central to any sustainable pathway to realizing Goal 1—‘the elimination of poverty in all its forms’.

2 People and Poverty in the Pacific

Cultural definitions of ‘poverty’ or deprivation vary significantly and may be associated, for example, with the nature of community and support networks, livelihood systems, or access to land and water resources for food and fuel. Even when indicators of poverty defined for international comparison (or related concepts such as human development) show improvements—as they have done in most of the Pacific since the 1990s, these indicators often hide critical dimensions of well-being related to community, culture, and place. These may be disrupted by forces such as population growth, globalization, commercialization, or unequal patterns of economic growth, as well as by natural hazards, and at times even by development projects designed to improve livelihoods and reduce poverty.

Early literature on poverty in the Pacific tended to focus on the nature of community and traditional kinship or other informal systems that provided a subsistence level of security to largely rural populations. In these accounts, notions of ‘hardship’ rather than poverty described the situation of people who might be temporarily affected by shocks but have community mechanisms for coping. As The State of Human Development in the Pacific 2014 report noted: “Those living on outer islands [or Papua New Guinean highlands] may be financially excluded from the market/monetary economy but be adequately covered by traditional social protection systems. They are also likely to have support from the traditional systems of production and distribution, which grants them access to subsistence and non-monetary resources” (UNDP 2014). While the expansion of markets and the cash economy, often associated with ‘development’, can of course create, and expand opportunities and choices, this process can also be highly unequal and exclusionary, and under some circumstances has led to the breakdown of informal, community, or traditional support systems. In this process, the nature and experience of poverty may change.

Economic growth during the recent decades of hyper-globalization, together with severe climate and environmental shocks, has thus contributed to the emergence of different forms of poverty and exclusion across the region—forms that resonate more closely with the concepts and measures of the international community. Incorporation into a globalized and financialized economic system, including through aid flows and remittances, has led to a rapid monetization of economies and greater dependence on cash for meeting basic needs such as food, energy, healthcare, and education. This heightened dependence on cash, alongside population growth and greater pressure on land, has driven processes of migration, rapid urbanization (albeit from a low base), and in turn the rise of informal, precarious, or risky settlements and employment. International (particularly regional) migration has also increased, with reliance on remittances from overseas workers becoming the mainstay of some small island economies (Box 14.1) (AUSTRAC 2017). Traditional mechanisms of reciprocity that previously provided social support in relatively equal societies have been weakened (Connell 2017).

Box 14.1 Migration, overseas employment, and remittances

The migration of youth and adults overseas, especially from some of the more developed Polynesian nations, is driven by lack of jobs and the pursuit of education or opportunities, but often leaves behind the elderly in rural areas with the additional responsibility of taking care of young children (UNDP 2014; Connell 2017). Polynesian PICTs are now among the most dependent countries on personal remittances in the world. Countries like Tonga (40% of GDP from remittances) and Samoa (18%) are particularly exposed to international economic volatility as remittance flows to the Pacific are linked to the strength of economies and labour schemes of host countries, and the ability to travel.

2.1 Population Change and Patterns of Poverty

Population growth, distribution, and mobility play a key role in shaping the nature and patterns of poverty in the Pacific. Many PICTs are sparsely populated ocean states with vast distances between communities on remote islands. While small, they vary considerably in population, ranging from a state such as Tuvalu with around 12,000 people to Papua New Guinea (PNG) which is home to around 9 million people, scattered in hundreds of often remote communities, from coastal to mountainous rainforest areas, with varying water, food, and energy resources and deficits.

The population has grown rapidly in the Pacific since the 1960s. While population growth is not necessarily a driver of poverty, pressure on resources and land, in contexts of limited employment and income opportunities, may exacerbate poverty and insecurity. As Table 14.1 illustrates, population growth has been rapid, though rates have slowed in some countries since around 1990.

Table 14.1 Total estimated population through from 1960 of select PICTsFootnote

The PICTs selected for analysis throughout this chapter are dependent on data availability. The authors also tried to maintain selection continuity where possible.

Rapid population growth in largely rural subsistence economies creates pressures for migration to urban areas. Overall, across the Pacific, the share of population that is urban remains low, largely below 30% (exceptions being Fiji, Kiribati, and Tuvalu at about 60% of the population) (Table 14.2). Deprivation takes very different forms from that experienced by, for example, remote rural populations. Rapid urbanization with limited employment opportunities has given rise to informal settlements with poor infrastructure or services, often located in coastal areas and vulnerable to natural hazards; it has also taken people away from their traditional kinship or community support networks (UNDP 2014).

Table 14.2 Proportion of Pacific peoples living in rural or urban areas

Patterns of poverty vary among PICTS, reflected also in variation in levels of income and human development (Table 14.3). According to the UN, three PICTS (Kiribati, Tuvalu, and the Solomon Islands) and Timor-Leste fall into its ‘least developed countries’ group, a classification which combines indicators of income, human assets, and economic and environmental vulnerability (UNDESA 2021). Most countries in the Pacific are classified as middle-income,² but also have relatively high levels of income inequality as measured by the Gini Coefficient. Fiji (a country of high urbanization), and Samoa and Tonga (low urbanization) are in the upper middle-income category and also have a high level of human development as measured by the UN’s Human Development Index,³ whereas most others, including PNG and until recently Solomon Islands, fall into the category of low human development.

Table 14.3 Overview of key development indicators

2.2 Income or Monetary Poverty

The most recent Pacific-wide data for the share of population living below the international extreme poverty line of $1.90 per person per day (using 2011 purchasing power parity) comes from the SDG baseline report (UNESCAP 2017) and World Bank Data (2022), although much of the data pre-dates 2010. UNESCAP has recently calculated new estimates (Fig. 14.1). The Melanesian countries of Solomon Islands and Vanuatu have poverty rates of 18.7 and 10.8% respectively; while over 30% of people in Timor-Leste lived below this poverty line—higher than the rate in any other country in Southeast Asia (where the average rate was 16.1%). PNG has a comparable rate, and importantly, has a much larger population. While those living below the extreme poverty threshold in most other PICTs is low, a significant number of people live on less than $5.50 per day PPP. This income group is unlikely to have significant savings, assets, or insurance, leaving them vulnerable to shocks (whether manmade or natural hazards, with the COVID-19 pandemic and the Tongan volcanic eruption and associated tsunami as the latest examples) and thus at risk of being pushed deeper into poverty.

Fig. 14.1

Estimated share of the population living below the $1.90 and 5.50 per day poverty thresholds in 2019 (UNESCAP 2021)Footnote

The $1.90 per day poverty threshold (PPP 2011) describes absolute poverty, whereas the $5.50 per day threshold describes poverty rates relative to the upper-middle income country average.

2.3 Energy Poverty

Income or monetary poverty measures often conceal the multi-dimensional nature of poverty including access to essential goods and services. ‘Energy poverty’ is a critical element of poverty for many Pacific Island peoples. Limited sources of energy and geographical challenges in providing affordable, clean, and reliable energy to dispersed populations contribute to widespread energy poverty, including PNG despite it being a petroleum exporting nation. The proportion of people without electricity in PNG (59%), Solomon Islands (66.7%), and Vanuatu (61.9%) is high by global standards, as is the proportion of people without improved cooking fuels and technologies (with implications also for health and nutrition) across the region (Table 14.4). These numbers are comparable to or below the low-income country average (despite higher income levels in much of the Pacific). Many communities are dependent on expensive imported fuel (petroleum products) for local and household level power (Dornan 2014), exposing them to high shipping costs, as well as international oil price fluctuations (UNDP 2015). Chapters 3 and 12 provide further detail on drivers of Pacific energy poverty. High costs or inadequate supply of energy and fuels have wide-reaching implications: from transport and access to markets or services (health and education), to cooking and hygiene, in turn affecting health and nutrition.

Table 14.4 Access to energy in the Pacific

2.4 Human Development

The Human Development Index (HDI) provides a multi-dimensional ranking of wellbeing within nations based on indicators including health, education, and dimensions of equality including gender (see Chap. 13: Gender, Equity, and Inclusion in the Pacific). The HDI has shown steady improvement across the Pacific, with Fiji, Samoa, and Tonga exceeding the developing country average, while most other PICTs are below this level (Fig. 14.2).

Fig. 14.2

(Source Human Development Index 2020)

HDI in the Pacific from 1990 to 2018

2.5 Education

Education is widely recognized as a critical factor for long-term poverty reduction and for breaking inter-generational cycles of poverty. Extracting the education component of the HDI, we see a similar pattern to the index overall. Indicators of schooling have improved across the region, with Fiji, Samoa, and Tonga ranking high on the education component of HDI, whereas other PICTs are making slower progress (Human Development Index 2020) (Fig. 14.3).

Fig. 14.3

Education index extracted from the HDI is achieved by combining (1) expected years of schooling and (2) mean years of schooling (Human Development Index 2020)

2.6 Health, Food, and Nutrition

Ill-health is a key correlate of poverty and may be both a cause, as ill-health reduces productivity and the ability to work, or a consequence, due to poor diets or lack of access to health care. Life expectancy at birth and Infant Mortality Rates proxy for the general well-being of populations: in only two Pacific countries (Samoa and Solomon Islands) are people on average expected to live longer than the middle-income country average (Fig. 14.4). In four PICTs life expectancy is currently at or below even the lower middle-income country average.

Fig. 14.4

(Source World Bank Data 2022)

Life expectancy at birth (years), both sexes in 1990, 2000, 2010 and 2018. Middle Income Country (MICs) means are provided

For Infant Mortality, most PICTs have seen significant progress in reducing the national rate and perform better than global and middle-income country averages (Fig. 14.5). This may in part be explained by improvements in health service delivery via community or village health workers (WHO 2018); however, PNG, Kiribati, and Timor-Leste still have rates of nearly 40 per 1,000 live births which is comparable to the lower-middle income average (36.6) and higher than the global average (28.2), and far above high-income countries such as Australia (3.6).

Fig. 14.5

(Source World Bank Data 2022)

Infant mortality rate is the number of infants dying before reaching one year of age per 1,000 live births in a given year. Middle Income Country (MICs) means are provided

Child stunting (low height for age) and wasting (low weight for height) are key measures of poor nutrition and child development, with serious consequences for the physical and cognitive development of children that may affect their learning and life chances and lessen their productivity in local economies for the duration of their lives (Samson 2016). Stunting remains a serious issue in many PICTs: approximately half of children under age 5 in PNG (49.4%) and Timor-Leste (51.7%), and one-third of children under age 5 in the Solomon Islands (31.7%) and Vanuatu (28.0%) are stunted (Fig. 14.6). The incidence of wasting (a measure of more acute malnutrition) also remains a concern, demanding significant attention to food, nutrition, clean water, and sanitation if outcomes are to improve to ensure all children are adequately nourished and can reach their potential. Simultaneously the share of children who are overweight has risen.

Fig. 14.6

(Source UNICEF Data 2020)

Overlapping malnutrition estimates in children (% of total)

An increase in childhood obesity is of concern given that the Pacific has among the highest levels of adult overweight and obesity⁷ in the world, conditions which are associated with a range of non-communicable diseases (NCDs) that in turn affect productivity and incomes as well as placing severe financial and social pressures on households and states (World Bank 2014). PICTs now account for the top ten states for obesity prevalence in adults worldwide (Fig. 14.7). A range of factors has changed diets in Pacific countries, including the move away from subsistence agriculture (linked in part to population pressure on land and urbanization) and closer integration with the global economy enabling an increased dependence on ‘cheap’ imported foods—away from traditional staples and towards imported energy-dense, processed foods that are suitable for long-distance transport but often have high fat, sugar, and salt content (see Chap. 4: The State of Food and Nutrition Security in the Pacific for further detail). Low-income households are more likely to depend on such food sources, making them also vulnerable to price rises associated with the cost of imports (such as those associated with global marine fuel markets). These dietary changes, alongside a tendency to less physically active lifestyles has driven the rapid rise in overweight and obesity, and in turn the rise in NCDs, including cardiovascular disease and diabetes, which account for the highest mortality burden in the region (Nanditha et al. 2016).

Fig. 14.7

(Source WHO Data 2020)

Prevalence of adult (18+) obesity rates (% of population) among counties and territories ranked in the top ten, all of which are PICTs (2016 data)

The high burden of NCDs is a major challenge for health systems. According to the World Bank, the cost of treating obesity and associated NCDs exceeds 50% of the health budget for many PICTs and is projected to rise rapidly in coming years (World Bank 2012, 2016). At the same time, communicable diseases (often associated with poverty) remain a major challenge, with infectious and waterborne diseases still the leading cause of preventable death amongst children under five: poor infrastructure, unsafe water supplies, and unfit sanitation systems, coupled with poor hygiene practices, remain barriers to reducing child mortality (see Chap. 2: State of Freshwater Resources in the Pacific for further detail) (UNDP 2014). A sustainable reduction in poverty in many of the PICTS will thus require attention to key health indicators and their food, water, and energy-related drivers.

3 Challenging Geographies and Volatility—Accounting for and Responding to Patterns and Trends of Poverty in the Pacific

The Pacific region faces a variety of geographical and structural conditions that have significant consequences for peoples’ wellbeing and livelihoods, including their secure and reliable access to water, energy, and food, and for patterns of poverty and deprivation. The unique ocean and island geography of many tropical Pacific states, despite many advantages, also presents development challenges. The small size of most nations, with often remote or isolated communities dispersed over great distances raises costs and creates constraints for reliably and affordably transporting goods, delivering services, or accessing markets (UNDP 2014; Ware 2005). A narrow range of exportable primary commodities and few mineral resources (with the exception of the Melanesian states) limits options for industrialization. While its natural wealth lends itself to tourism, this along with income sources from overseas remittances and a heavy reliance on aid, means that these economies are highly externally dependent. Increasing evidence points to the region being increasingly impacted by ocean biodiversity loss, environmental pollution, and climate hazards (Wairiu 2017). As a result, economic growth is, as Rajah et al. (2019) describe it, ‘more volatile than fast’ (Table 14.5). Exposure to such volatility—whether driven by economic, manmade, natural, or environmental forces—is a feature of Pacific economies and a reality in the lives of its peoples.

Table 14.5 The economic growth of PICTs tends to fluctuate year-to-year such that the standard deviation of annual growth exceeds the average over the past 20 years

3.1 Natural Hazards and Disasters

As described in Chap. 5, the location and unique island geography of many tropical Pacific states exposes them to natural hydrometeorological volatility, also increasingly associated with climate change. Pacific communities are already experiencing land and marine temperature extremes that place a burden on energy availability for cooling and stimulate higher water demand for domestic, agricultural, and industrial uses (CSIRO et al. 2015; Australian Bureau of Meteorology and CSIRO 2011). Climate projections also indicate an increase in both the number and intensity of extreme rain events, even in areas where average rainfall may decrease, possibly leading to more instances of flooding (IPCC 2021; CSIRO et al. 2015; Australian Bureau of Meteorology and CSIRO 2011). Sea levels are modelled to rise, affecting agricultural production, food, and potable water security, especially on low lying atolls (IPCC 2021; Australian Bureau of Meteorology and CSIRO 2011; Barnett 2011). Acidification of oceans will also likely continue to negatively impact reef biodiversity, reef tourism, and may cause fisheries to decline by as much as 20% directly affecting seafood supply, livelihoods, and the wellbeing of coastal communities across the Pacific (Dutra et al. 2018; CSIRO et al. 2015; Barnett 2011).

Tropical cyclone modelling is less certain. Most models project a decrease in frequency but signal an increase in the proportion of the most intense South Pacific tropical cyclones (Australian Bureau of Meteorology and CSIRO 2011). Since infrastructure damage increases exponentially with windspeed, most locations in the Pacific will have a higher chance of experiencing damage from category 4 and 5 cyclones this century (CSIRO et al. 2015). As crude indicators of the damage they already cause: the destruction, loss of life, and loss of livelihoods caused by Tropical Cyclone Pam in Vanuatu in 2015 amounted to 64% of GDP, Tropical Cyclone Winston cost 31% of Fiji’s GDP in 2016, and Tropical Cyclone Gita 35% of Tonga’s GDP in 2018 (WTO 2019).

The increased frequency and severity of extreme events may also reduce the ability of populations or states to adapt and cope. These risks to PICTs, both in terms of their high exposure to natural hazards and their limited capacities or resources to respond or adapt, are highlighted by the World Risk Report (Bündnis Entwicklung Hilft 2019). The report creates a general disaster risk index, ranking countries by their exposure and capacity to cope with natural hazards.⁸ Seven PICTs (including Timor-Leste) rank in the top twenty for disaster risk worldwide: Vanuatu (1st), Tonga (3rd), Solomon Islands (4th), PNG (6th), Fiji (12th), Timor-Leste (15th), and Kiribati (19th) (Fig. 14.8). The 2019 Index reveals that most PICTs fall into the categories of high or very high vulnerability, with severe consequences and limited coping capacity (Bündnis Entwicklung Hilft 2019).

Fig. 14.8

(Bündnis Entwicklung Hilft 2019))

Country disaster risk index with PICTs identified in yellow (Created using World Risk Index 2019 data provided in the World Risk Report 2019

Destruction and disruption resulting from natural hazards (such as tropical storms) are often associated with poverty. Such events may lead directly to the loss of assets and livelihoods (housing, animals, fisheries, crops, resources, and infrastructure) or the injury or death of a family member, potentially pushing people into poverty, or creating further deprivation for already vulnerable, low-income households. Households may be forced to sell remaining assets to cope with the immediate losses or costs (such as health care or rebuilding homes). Even those not classified as poor may be vulnerable to losses. The significant proportion of people in the Pacific living around the $5.50 per day poverty threshold, but lacking capital, savings, or insurance to help recovery, are prone to fall deeper into poverty post-disaster. This is likely to be compounded by consequences at a community, regional, or national level (see Chap. 10), including the disruption of roads and transport, water and energy supply infrastructure, destruction of crops (especially banana) and productive land (e.g., coastal taro production areas), markets, schools, and healthcare centres that result in inaccessibility of food, water, energy, education, healthcare, and other critical goods and services.

Poverty across the region is also exacerbated by human activity that affects land and marine environments and natural resources on which island populations depend for livelihoods, food and water security, and good health, as illustrated in Table 14.6.

Table 14.6 Sources of environmental degradation in the Pacific

3.2 Government Responses and Challenges

The geographic dispersion of populations and frequent natural hazards contribute to the difficulty and raise the costs of delivering basic services and infrastructure to remote Pacific communities (Ware 2005). Such costs account for a relatively high share of GDP relative to countries at similar income levels (Figs. 14.9 and 14.10). The result is at times the under-provision of essential services such as primary health care to many communities (WHO 2018). Infrastructure, transport, and services where provided are hard to maintain, often of poor quality, and easily disrupted (ADB 2017; UNDP 2014), while the supply of trained teachers or health workers to remote locations is often difficult, as is the delivery of humanitarian assistance when needed.

Fig. 14.9

(Source World Bank Data 2022)

Health expenditure per capita and as % of GDP

Fig. 14.10

(Source World Bank Data 2022)Footnote

Note: Some of the available data is antiquated. Date for Government expenditure on ed./Children out of school respectively: FSM 2015/2015, Kiribati 2000/2017, Solomon Islands 2010/2018, Tuvalu 1990/2016, Tonga 2000/2015, Vanuatu 2017/2015, Timor-Leste 2018/2018, Samoa 2016/2018, Fiji 2013/2016, PNG 2018/2016, Upper middle-income 2013/2018, Middle-income 2017/2018, Lower middle-income 2018/2018, Low-income 2018.

Government expenditure on education and enrolment outcomes

Government expenditure on education (as share of GDP) is higher than the average for middle-income countries in several states (FSM, Kiribati, Solomon Islands, and Tuvalu), and is roughly comparable in others (Fig. 14.10). Only PNG’s expenditure on education (1.9% in 2018) is below the low-income country average, although the proportion of primary school age children out of school (7.3% in 2016) is relatively low, even relative to other PICTs (Fig. 14.10).

3.3 Migration, Informality, and Employment

As noted in Sect. 14.2, while urbanization remains low, it is increasing rapidly with migration from rural areas. Drivers for urbanization are not necessarily new: colonial authorities and religious missions encouraged traditional communities living inland on larger islands to move to emerging urban trade centres on the coast (Barnett and Campbell 2010). Recently, especially in Melanesia and Micronesia, urbanization has been accelerated by the internal migration particularly of young people moving from rural areas (including remote islands) in search of work and opportunities, resulting in a ‘youth bulge’ in Pacific urban and peri-urban areas (Connell 2017). While the share of the population living in urban areas is low in PNG (13.3%), Solomon Islands (24.2%), and Vanuatu (25.4%), these countries have the fastest growing cities, and their capitals are home to large informal settlements (Table 14.7) (Connell 2017). Port Moresby is home to approximately two in five of all Pacific urban residents, with half of them living in informal settlements.

Table 14.7 Estimates of people living in urban informal settlements in Pacific Island capital cities

Most of this urbanization is unplanned and poorly managed, with informal settlements often established on marginal or coastal lands, where they are exposed to natural hazards such as storm surge and cyclonic events, as is the case in Port Moresby, Honiara, Port Vila, and Suva (Thomas and Keen 2017; Connell 2017). Such settlements often lack basic infrastructure and amenities including electricity, water, or sanitation (Connell 2017), creating challenges for new settlers in accessing water, cooking fuel, and food, as well as adversely affecting health. Compounding these challenges, migrants may lose their village, kinship, or community systems of support. This loss is particularly acute in the wake of a disaster when the absence of informal support systems and social or familial safety nets may dramatically reduce resilience and the ability to recover (UNDP 2014). Most recently, COVID-19 has revealed key gaps in social protection, with those in informal low-income employment often falling outside any government safety net (Alfers et al. 2020).

Limited employment opportunities in PICTs create a high dependency on overseas employment. In most Pacific urban locations, the number of graduates exceeds the number of new job opportunities created annually; thus, cities are neither the engine for opportunity that many new migrants anticipate, nor are they the driver for inclusive and sustainable development to combat poverty (Connell 2017). Migration (typically to Australia and New Zealand) is one remedy for high underemployment and a major source of income through remittances (Box 14.1); recent evidence also suggests this may reduce population growth (Howes et al. 2020). Fiji, Samoa, and Tonga have large diaspora relative to their population (25, 60, and 70% respectively). Howes et al. (2020) argue that without migration, Samoa, Tonga, and Fiji would have higher population growth, along with higher rates of un-/underemployment, and more poverty. Conversely, Kiribati, PNG, Solomon Islands, Vanuatu, and Timor-Leste have lower rates of migration and remittances alongside higher population growth (Table 14.1) (Howes et al. 2020).

3.4 COVID-19 and Poverty in the Pacific

The COVID-19 pandemic, as one more shock to hit the region, illustrates the multi-faceted forms of vulnerability and volatility of the PICTs. In the initial phase of the pandemic, Pacific governments responded with strong measures to isolate their populations and were spared much of the public health impact seen elsewhere. However, as of early 2022, with the emergence of the Omicron variant alongside the gradual relaxation of travel, the virus is now sweeping through several islands (Carreon et al. 2022). This puts pressure on already fragile or over-stretched health systems, in a context where high rates of obesity significantly raise the risk of hospitalization from COVID-19 (ADB 2021). While most PICTs are progressing well with vaccinations, having benefitted from the COVAX initiative to share and coordinate international resources to low-to-middle-income countries, numerous concerns remain. Firstly, PNG, Solomon Islands, and Vanuatu are on track to be amongst the last in the world to reach high levels of vaccination (Lowy Institute 2021); and secondly, like many low-to-middle-income countries, most PICTs do not have access to combination vaccine therapies that provide improved protection against the infectious Omicron variant (Dolgin 2022).

While the health impacts are only now beginning to unfold, the consequences of restrictions on travel have been particularly severe for a region heavily reliant on tourism, trade, and overseas employment. Effective travel bans to combat the pandemic mean that both national and household budgets are being stretched to a breaking point, seriously affecting people’s living standards (Hoy 2020). This is particularly true in tourism-dependent nations such as Cook Islands, Palau, Fiji, Samoa, Tonga, and Vanuatu, while commodity exporters such as PNG and Solomon Islands were also heavily affected (ADB 2021) (Fig. 14.11). The economic repercussions of COVID-19 have caused a decline in government taxation and other revenues in many PICTs, although aid-dependent countries (such as Tonga and Samoa) have been somewhat protected. While many PICTS entered the pandemic in a reasonably good fiscal state, COVID-19 related support programmes and reduced revenues have, in most cases, led to increased debt levels and thus decreased fiscal space for on-going recovery efforts and other critical government spending (DFAT 2020; ADB 2021). Inflationary pressures linked to global supply chains will also particularly impact heavily trade dependent small island states.

Fig. 14.11

(Adapted from World Bank 2021)

GDP growth in 2020

There is little doubt that the pandemic and its broader consequences will stall or reverse many gains in poverty reduction and progress towards the SDGs more generally. As Hoy (2020) noted: “Even in our most conservative scenario of a 5% contraction in household consumption, the rate of extreme poverty may increase to over 30% of the population in PNG and Timor-Leste, 27% in Solomon Islands, and 17% in Vanuatu. Our severe scenario of a 20% contraction [in household consumption] would result in an additional 1.2 million people in the region being pushed into extreme poverty, an increase of over 40% on pre-COVID-19 levels” (Hoy 2020). The extended nature of the pandemic and associated economic disruptions makes these scenarios increasingly likely.

4 Poverty Reduction Policies and Development Assistance in the Pacific

Given the distinct and varied contexts, geographies, and constraints of Pacific Island states, do standard approaches to poverty reduction adequately address the drivers, nature, or consequences of poverty? As demonstrated in the data above, the MDG period up to 2015 saw significant improvements in some human development indicators. This progress appears to have plateaued in more recent years, while opportunities for sustainable livelihoods and employment remain challenging. Structural constraints to growth and employment creation, the high costs of expanding infrastructure and services, and geographic or weather-related drivers of insecurity, vulnerability, or deprivation often remain untouched by poverty reduction interventions targeted at poor individuals or families. Limited growth opportunities and frequent shocks, including from natural hazards, mean that many PICTs are heavily aid dependent.

4.1 Aid and Development Assistance to the Pacific

Although the total amounts are comparatively small, Pacific nations receive among the highest rates of Official Development Assistance (ODA) per capita or as a share of Gross National Income (GNI) (World Bank Data 2022). As a share of GNI, Tuvalu receives 45.6% (2016–2017), followed by Marshall Islands (26.9%), and FSM (25.1%) (Fig. 14.12). Given its size, PNG receives by far the largest total aid in the region (Fig. 14.13). However, together with Fiji, it receives the lowest rate per capita—2.5 and 3.0% respectively (in 2017). Some PICTs also have access to labour migration schemes (particularly with Australia) as potentially important poverty reduction instruments. As illustrated in Fig. 14.14, significant variability in ODA is driven by humanitarian assistance for natural hazard induced disasters and emergencies, including climate-related events in addition to regular development assistance.

Fig. 14.12

(Source World Bank Data 2022)

Net Official Development Assistance received as a percentage of GNI

Fig. 14.13

(Source World Bank Data 2022)

Net Official Development Assistance received (current USD). PNG is excluded due to the comparatively large ODA receipts which, during this time series, fluctuated between $514 m (2010) and $786 m (2018)

Fig. 14.14

(created using Lowy Institute 2020 data provided in the Lowy Institute Pacific Aid Map 2021)

Humanitarian aid committed to select Pacific countries

Australia and New Zealand provide over half of the Official Development Assistance (ODA) to the Pacific. Chinese ODA has trended upward over the last ten years, as has that provided by the Multilateral Development Banks and the United Nations, whereas ODA provided to the region by the United States and Australia has declined slightly (Table 14.8). China now provides more ODA to the region than the United States.

Table 14.8 The top ten donors of Official Development Assistance (grants and loans) to the Pacific (in USD millions)

While new sources of finance may become increasingly available, for example through climate-related financing or through new donors or investments (particularly with China’s growing engagement in the region), there is still relatively little evidence of the impacts of such funds in relation to poverty reduction.

4.2 Social Protection

Globally, the early twenty-first century has seen a dramatic shift in approaches to reducing poverty, with an emphasis on expanding systems of social protection as safety nets or assistance for people affected by shocks, as well as supporting those in chronic poverty. Cash transfers have become the main non-contributory social protection mechanism, with or without conditionalities attached; other programs include food or in-kind transfers and employment guarantee schemes. Instruments are designed to protect vulnerable individuals or families, and to invest in livelihoods and human capital in order to support sustainable movements out of poverty. As noted above, monetization and other forces have challenged the traditional community and kinship systems of reciprocity and collective support prevalent in many Pacific societies (UNDP 2014). As these systems have weakened, governments have developed or expanded both contributory and non-contributory programs of social protection, but coverage in the region remains low and uneven. Globally, the COVID-19 pandemic has shed a light on the gaps in social protection and challenges for expanding protection to affected groups, including the informally employed working poor.

With low shares of formal employment and high levels of informality, contributory social security coverage is likely to remain limited. Data reported in the ILO’s Social Protection Report in 2017 indicates that most of the region either has limited legal social security coverage or the information is lacking. Only Fiji is classified as ‘intermediate’ in terms of coverage. The most common contributory programs cover old age pensions, with some disability or employment injury schemes. Limited provisions exist in areas of unemployment, sickness, maternity, and child benefits (ILO 2017). The elderly is the only group covered by programs in most countries, with a number introducing non-contributory social pensions to complement Provident Funds or employment related social insurance. However, effective coverage is often limited to under 10% of the elderly population while benefits may be very low (ILO 2017).

A number of non-contributory schemes have been introduced by governments to meet the needs of specific groups, and to respond to crises or disasters. Some of these are highlighted in Table 14.9. The key focus appears generally to be on the elderly, and on children, through education fee waivers or expansion of universal free education. Health care schemes, poverty targeted cash transfers, or support for the disabled have been introduced by some states but remain limited. In the context of COVID-19, several countries have introduced new, or scaled up existing, social protection programs. Timor-Leste, for example, is providing cash transfers to the poor (Magalhães 2020). Overall levels of spending on non-contributory social assistance or ‘safety net’ programs across the Pacific are low—generally below regional or global averages (World Bank 2018). Public spending on health, education, and social protection as a share of total public spending may even have decreased between 2000–2004 and 2014–2016 across a number of countries for which data is available (Timor-Leste, Kiribati, Samoa) (UNESCAP 2018). The latest ILO World Social Protection Report 2020–2022 shows expenditures on social protection (excluding health) ranged from 0.1% of GDP in PNG to 10.8 in Kiribati, with most Pacific countries below the lower middle country average of 2.5% and comparing poorly with the Southeast Asia and Pacific average of 8.2% (ILO 2021). This translates into low effective coverage with the share of population covered by at least one social protection (SDG indicator 1.3.1) ranging from 9.6% in PNG (below the LIC average of 13.4) to 86.3% in Kiribati (ILO 2021). Most PICTs approximate the Lower-Middle Income Country range (24.9%), well below the Southeast Asia and Pacific average of 61.5% (ILO 2021).

Table 14.9 Select non-contributory social protection schemes in the Pacific

Data is limited on the specific social protection response to COVID-19 in PICTs. Most countries introduced some fiscal stimulus, increasing health expenditures and income support or social assistance.¹⁰ Howes and Surandiran (2020) report on a number of PICTs with expenditures ranging from under 1% in fiscally constrained states (Fiji, PNG) to 8.3 and 6% in Timor-Leste and Tonga respectively. They note that on average safety nets take up the largest share of new spending (22%) (compared to 21% for health) but also draw attention to the significant variation among states. What is clear is that pressure on government budgets has been severely exacerbated by the economic impacts of COVID-19. Government revenues have fallen, and with limited options for financing increased spending or providing fiscal stimulus, levels of debt in many PICTs have increased (IMF 2020). The risk is that this situation creates pressure for cuts in government spending, austerity measures, and efforts to raise taxation, likely slowing the recovery from COVID-19 and hindering progress towards the reduction of poverty and other key development goals.

4.3 Poverty Reduction and Sustainable Development

The 2030 Sustainable Development agenda added environmental, climate, and ‘blue economy’ goals to the poverty reduction agenda of the MDGs, thus linking the ‘social’ goals of the MDGs with economic and environmental processes that underpin or constrain well-being for individuals and communities. In no small part due to efforts of Small Island States and organizations such as the Pacific Island Forum, climate risks, natural hazards, environmental degradation, and the undervaluation or overexploitation of natural resources are explicitly addressed by the SDGs, while the inclusion of Goal 14 on ‘blue economy’¹¹ pays particular attention to the vulnerabilities and potential of island nations.

The promise of the SDGs in terms of a greater focus on alternative development strategies and livelihood opportunities linked to ocean economies, sustainable resource use, renewable energy sources, and ecosystem services requires major financial and technical support from the global community—something that looks increasingly challenging in a post-COVID-19 economic downturn. In recent years, significant ODA (along with other investments) has been directed to infrastructure, technical assistance, and capacity building to support the Sustainable Development Goals (Lowy Institute 2020). While many projects, such as investments in transport or green energy, have potential to benefit the poor as well as the economy and environment, there is less evidence to date on how these investments perform in terms of poverty reduction or social goals. Globally, few instruments have as yet been popularized that explicitly link environmental or climate actions to poverty reduction.

In terms of progress, the UN’s Asia–Pacific SDG report shows that over half the targets for the Pacific sub-region are not measurable, while the Pacific lags in key areas related to resilience and adaptive capacity, eco-systems, and biodiversity, as well as hunger, water, and sanitation (UNESCAP 2020). The Pacific Island Forum’s First Quadrennial Pacific Sustainable Development Report (2018) highlights priority areas for accelerating progress, including enhancing social protection and gender equity (particularly addressing high levels of violence against women), and increasing employment in the oceans, fisheries, and sustainable tourism sectors, alongside efforts on climate change and disaster risk reduction (PIF 2018). It draws attention to the need for financial investments, regional institutions and capacity strengthening, and improved data for monitoring. While the leadership and commitments are strong, the question remains as to whether, even with sufficient investment, the region can foster a shift away from a traditional, carbon intensive growth model that often fosters inequality, towards a trajectory of sustainable and equitable development based on the ocean economy and its resources that can reduce poverty and lessen the region’s external dependence.

5 Conclusions

This chapter has made the case that the lives of populations across the Pacific are marked less by extreme income poverty, except in particular contexts, but more by volatility of livelihoods and income sources and vulnerability, whether to natural hazards, the impacts of environmental degradation and climate change, or ill-health (particularly linked to inadequate diets and poor nutrition). The current global COVID-19 pandemic both illustrates and severely exacerbates this situation. Strengthening access to services and social protection that could help individuals and communities cope with short term shocks and income insecurity can be a key component in responding to such volatility. This chapter has shown that poor health linked to inadequate nutrition is a key feature of poverty in the region. To ensure the availability, quality, and affordability of essential commodities to all by tackling problems at the intersection of water, energy, and food would be an important contribution to alleviating poverty and improving livelihoods of low-income households. Ensuring equitable access will require enhanced social protection measures that address the specific needs of vulnerable population groups.

The chapter has also illustrated the structural and geographic challenges that many Pacific Island communities and nations face, whether in strengthening short-term coping mechanisms, building ‘resilience’, or addressing the long-term underlying causes of vulnerability and persistent poverty. These include dimensions of remoteness that elevate the dependence on external relations, raise the costs of goods and services particularly in reaching isolated communities, and reduce opportunities for employment. Meeting the needs of growing populations, while building capacities for resilience and adaptation in the face of frequent shocks, resource scarcity, and long term environmental and climate change requires systems of support and investments in infrastructure that are particularly costly given geographic conditions. Policy efforts in the social and environment sectors are expanding albeit within tight fiscal constraints but limited employment opportunities remain a key barrier to more sustainable livelihoods and healthy lives for the poor.

Given the specific context and characteristics of the Pacific Islands, addressing the needs of vulnerable communities and individuals will require community-based and locally led initiatives and solutions. Ultimately however, to generate employment and sustained development, structural issues will need to be resolved through wider regional or global change. A promising area involves recognizing the value produced by ocean states through ‘ocean accounting’, a process that better accounts for the value of ocean ecosystems and marine resources. Ocean accounting has huge potential as a tool for recognizing and valuing the role of Pacific Islands in areas such as marine protection and sustainable exploitation of ocean resources including fisheries. It can support strategic and spatial planning of the ocean and coasts, regulation of ocean-based economic activities and sectors, adaptive management to keep pace with policy cycles, and attract associated investment (GOAP 2022). It may also have potential to provide sources of income and employment including through eco-system service payment schemes, as well as high protein food (Stuchtey et al. 2020).

Finally, data limitations remain a serious constraint to comparative analysis and monitoring of poverty, vulnerability, and inequality across the region, with limited information available, particularly disaggregated by gender or for other groups. Where data do exist, they are rarely comparative and often dated; small countries often become hidden in regional averages, particularly alongside their much larger Asian, and richer Oceania, neighbours. Support to improve institutional capacity for data collection, collation, and innovation in sparsely populated and remote island locations will be essential to closing data gaps and to provide a more nuanced understanding of drivers and changes in poverty, inequality, and wellbeing in these contexts. Such understandings may in turn enable better informed poverty reduction measures, as well as more equitable and sustainable development policies over the course of the twenty-first century.