Pacific Islands Forum 2022: Analysis - Cost of living crisis threatens 'unity'

Pacific leaders emerged yesterday from one of the most-anticipated meetings in recent times preaching unity, but in doing so some crunch subjects were avoided, including how to tackle the rising costs of living post-pandemic that are threatening democracies across the globe. Michael Neilson, who was in Suva, Fiji, this week, reports.

Near the five-star Grand Pacific Hotel in Suva, Rigieda Kaibau has no idea the region's most powerful politicians have been holed up there for days, poring over the major issues facing the Pacific, affecting her very livelihood.

Climate change is a bit of a concern, she says. China and rising geopolitical tensions, not so much.

Her main concern: "Jobs".

Kaibau lost her job in a ginger factory soon after the pandemic hit the island nation in April last year, with the tourism industry - predominantly attracting Kiwis and Australian visitors - crumbling and impacting everything around it.

She's lucky her partner continues to work but for now, she looks after her wider family at home.

Rigieda Kaibau, with niece Dakasa (left) and granddaughter Princess Ligavou, lost her job soon after the pandemic hit in April last year. Photo / Michael Neilson

It's a similar story for many, highlighting a disconnect between what was high on the agenda within the Pacific Islands Forum and on the minds of those on the streets outside.

The unemployment rate in Fiji, which hovered around 6 per cent before the pandemic, is estimated to have shot up to around 35 per cent after the outbreak in April last year.

According to a late-2021 International Monetary Fund report, the whole Pacific region is in recession. Tourism-dependent economies such as Fiji were hit especially hard — such economies averaged a contraction of 6.5 per cent in 2021.

Young men on the streets of Suva speak of wages plummeting and competition heating up for the seasonal worker schemes offered by Australia and New Zealand, through which their hourly rates can increase sixfold. The schemes are not offered to women.

Now with costs of living ramping up across the globe, the effects are being felt disproportionately by those who have less to begin with.

It's similar across many Pacific island nations, with reports of fuel costs so high - and wages so low - some people cannot afford to drive to work.

Add to this the fact 72 per cent of electricity in Pacific island countries comes from fossil fuels - largely diesel generators - and the crisis is not likely to improve anytime soon.

Pacific Islands Forum leaders, including Prime Minister Jacinda Ardern and Australia's Anthony Albanese, met on Thursday face-to-face for the first time in three years, after the pandemic began in early 2020.

Leaders emerged from their much-anticipated, highly secret catch-up preaching unity - crucial given the week began with Kiribati splitting away from the 18-member Pacific "family", sparking concerns its increasingly close ties with China could have had an influence.

Nemani Cakacaka, 26, with his daughter Maria, 2, in central Suva, Fiji, says there are few jobs at the moment and many people want to work in Australia and New Zealand. Photo / Michael Neilson

It was also a stark contrast to the last meeting three years ago, which went eight hours over time, with reports of tears and shouting at Australia's inaction on climate change and then Prime Minister Scott Morrison's indifference to their concerns about coal.

The retreat wrapped up ahead of schedule - "still daylight" Ardern pointed out afterwards - with unity especially strong around the very issue that caused mayhem at their last face-to-face meeting.

"Tuvalu ... is having a conversation around the future nationhood without the possibility of having a landmass," Ardern said.

"That is the kind of conversation that's been had."

Pacific Islands Forum leaders ahead of their secret meeting on Thursday to hash out issues affecting the region. Photo / Pool

Leaders agreed to support Tuvalu as it navigated the devastating reality that the low-lying island nation will soon be underwater, and what that means for its sovereignty. Tuvalu and others in similar positions want Exclusive Economic Zones guaranteed for perpetuity, not based on landmass, of which they have increasingly little.

Leaders declared a climate emergency, agreed to pursue a limit of 1.5C warming and ramp up action and advocacy across the globe.

They agreed to support Vanuatu's bid to have international courts rule on climate change, potentially defining who is responsible and who should pay, and Australia's bid to co-host an international climate conference with Pacific nations.

The Suva Agreement was fully supported, helping retain four of the five Micronesian states that threatened to split last year, and news has emerged holdout Kiribati has started to re-engage.

But leaders also sacrificed tackling in depth some of the most thorny questions which, if not addressed soon, could tear the fabric of unity apart.

This included Australia's economic devotion to coal exports and the fact its current climate emissions targets are not within the 1.5C global target. Albanese responded to a journalist afterwards in a heated exchange it was a "global target" and therefore could be reached collectively.

Mere Bukarau, with daughter Joey, 2, sells roti in central Suva to support her young family. Photo / Michael Neilson

Fiji PM and forum chairman Frank Bainimarama said after the meeting he would have gone after Albanese on the touchy subject of coal, but decided to instead support the strong ambition shown already - in stark contrast to his predecessor Morrison - in the name of unity.

The draft communique also had no mention of the controversial Solomon Islands security pact although, while Ardern said she would not go into exact details of discussions, it is understood it was covered, at least verbally.

On the geostrategic front, leaders agreed to the Blue Pacific Strategy to guide the region until 2050, with a range of commitments to approaching security and economic issues as a "family".

The high-level strategy is also the vehicle through which approaches to geopolitical issues - such as the influence of China and the United States, which launched a major Pacific push this week - will be tackled.

Coming out of this year's meeting unified was more important than ever, not only because of the internal issues and politics but with superpowers circling.

But those key issues will not go away. The test will be that Ardern and Albanese live up to their climate commitments, and build on them.

The test will be that New Zealand and Australia do partner with the Pacific, respect their autonomy and sovereignty in making economic and security decisions, and preach the transparency they seek.

Sereima Rokoroaqa worked as an accountant before the pandemic and has been out of work since. She sits with friends Adi Kydre (left) and Samu Fransies. Photo / Michael Neilson

As New Zealand and Australia become more closely aligned with the United States, the test will also be in how their major diplomatic push launched this week is received and is followed through (the $1 billion negotiated package around tuna fishing rights still awaits Congress approval) and is not a repeat of a similarly themed address 10 years ago.

The test will also be on how strongly the Pacific economies bounce back amid Covid-19, how much of that comes from their "family" and how much from other partners.

New Zealand imports from Pacific island countries plummeted by more than 80 per cent - reaching a low of $55 million in June 2021, while New Zealand exports to the region dropped just 30 per cent at their lowest point, to $370m in March last year.

The trade deficit for Pacific island countries to New Zealand is about $200 million a year. Covid saw New Zealand's imports of Pacific goods and services plummet over 80 per cent Photo / Stats NZ

New Zealand and Australia are major trading partners for many Pacific countries, but the imbalance in favour of the wealthier cousins is enormous, with exports remaining low.

Exports from the Pacific to China for example dwarf those to Australia and New Zealand, and this is despite the Pacer-Plus trade agreement being in place close to a decade.

The Covid-19 recovery and economic concerns were mentioned by leaders on Thursday, but not to the same level it was a concern for many of Fiji's population.

With elections under way in Papua New Guinea, and scheduled for Fiji in November, those economic factors are likely to move higher up the agenda for local leaders.

Sereima Rokoroaqa was an accountant until April last year when she lost her job. She's been out of work since.

"Fiji is very hard at the moment. So many people have lost their jobs since Covid and tourists stopped coming."

A group of engineering students at the University of the South Pacific in Suva, Fiji, said they thought they'd have better job prospects overseas than at home. Photo / Michael Neilson

Rokoroaqa said she was lucky her family had a farm in their village not far from Suva. When she lost her job she returned home, where she could live for free and off the land.

It's a "luxury" backstop she says many Fijians are lucky to have in times of crisis.

Along the Suva waterfront, five first-year engineering students sat in the sun, laughing and joking loudly.

Asked what they thought of their prospects of jobs at home, they hesitated.

They said they loved what they were doing but saw few prospects in their home country.

Then they laughed again, a little louder this time.