“Hardship” is the new word describing poverty in the Pacific Islands, where “the label of poverty is considered culturally inappropriate,” according to a report released by the World Bank this week, that highlights the increasing concerns over the vulnerability of many people living in its 11 member countries.

Many Pacific Islands countries (PICs) are challenged in meeting their basic non-food needs and they faced substantial economic and environmental risks, the report stated. It also noted that growth in non-communicable diseases (NCDs) had already eroded life expectancy in Tonga.

The World Bank report on the current state of poverty/hardship, vulnerability to shocks and the state of risk management, showed how hard life has become in the Pacific Islands. With the life style, the form of government and the economic systems that countries have opted for, it clearly showed that the islanders, their governments, and the aid donors have a lot of work to do stop the PICs from plunging into the depths of despair.

“Hardship and vulnerability are increasingly prominent concerns in the Pacific Island Countries, but the knowledge base to guide policymaking is limited,” it stated.

According to the report, the label of poverty is considered culturally inappropriate because it was viewed as implying a failure of traditional, community-based safety nets. “As such, it is not discussed on political platforms, although it is viewed as a concern by relevant government departments and agencies.” Therefore in the report the term “hardship” was used to refer to the welfare concept commonly termed “poverty.”

The report found that:

- Across the Pacific many people are living in hardship, and many more are vulnerable to hardship in the future.

- Across the Pacific many people are are unable to meet their basic needs.

- More than 20% of the population of the 11 Pacific Island Countries who are members of the World Bank live in poverty/hardship.

- The incidence of poverty is highest in Papua New Guinea, where 40% of the population lives in poverty.

- Within the 11 PICs many factors have a bearing on hardship, including location, educational attainment, work status, gender, and age.

- In Fiji and Papua New Guinea, people living in urban areas are much less likely to live in hardship.

- Hunger is traditionally low throughout in the Pacific, but urbanization and monetization of the economy are creating new forms of hardship, particularly for meeting the costs of non-food needs.

- In general, households which are headed by individuals with limited education or who do not work are more likely to live in hardship.

- Households that are headed by the elderly are more likely to live in hardship than those headed by younger people, while households with more children are also more likely to live in hardship.

- Within the 11 PICs the most well-off people (the top 20%) consume many times more than the least well-off.

- Inequality is highest in the Solomon Islands, Papua New Guinea, and Fiji.

- People in the Pacific are vulnerable to aggregate economic and natural shocks due to their countries' combination of small size, isolation, and other geographic features.

- Fuel and food imports, tourism, remittances, and international aid all contribute to the well-being of Pacific Islanders and help countries overcome the limitations on development caused by geography. However, PIC economies are still small and undiversified, so negative shocks to these external flows can have very large impacts.

- Micro simulation analysis for Kiribati, Tonga and PNG finds that shocks to the prices of imported food and fuel, agricultural commodity exports, and remittances push many people into hardship, and deepen the severity of hardship for many others. In Kiribati, simultaneous spikes in the prices of rice, wheat, and oil are estimated to push 6% of the country's entire population into hardship.

- The growing epidemic of non-communicable diseases NCD is an aggregate health shock with significant consequences for the well-being of people in the Pacific.

- NCDs reduce productivity and quality of life, and are very expensive to treat.

- Growth in NCDs has already eroded life expectancy in Tonga.

- In addition to aggregate shocks, people in the Pacific face many idiosyncratic and local shocks. Crop failure, job loss, violence, and many other idiosyncratic or localized shocks are likely to occur in the Pacific.

- Domestic violence and unwanted pregnancy show that these personal shocks are much more common in the Pacific than in neighboring East Asian countries.

- While traditional systems of resource sharing and self-subsistence are important to the well-being of many Pacific islanders, hardship and vulnerability are still major challenges.

- Traditional systems do not reach everyone, and evidence from household surveys suggested that those in hardship may be the least likely to be part of gift-giving networks.

- Households access to formal financial instruments is limited in most PICs. Only a minority of households hold savings accounts, loans or insurance policies.

- Healthcare expenditures in the Pacific largely go to coping with health shocks and rehabilitation care absorbs 80-90% of national health expenditures. This focus on coping is fiscally unsustainable because of NCDs, which are spreading quickly and are costly to treat.

The way forward

The World Bank report outlined important actions governments can take to pursue prudent macroeconomic policy, including building up savings and investing in data collection.

As part of the way forward they recommended that Government policy should aim to avoid being a source of instability itself, and should actively recognize and account for risks in all areas.

- Governments and their development partners should invest in fielding regular household surveys for all countries.

- Conducting surveys was not enough; public access to data and analysis was equally critical to getting it used by policy makers and partners, the report stated.