EU aid to pacific targeted at boosting private sector

Radio Australia

Monday, 3 March 2014:

European Union aid to the Pacific for the next seven years is being discussed in Suva at the moment.

Consultations are taking place between Pacific nations and the European Development Fund about what sort of European Union aid is working, what isn't, and what areas should be focused on in future. The amount of aid earmarked for our region is expected to rise by about ten per cent. Dirk Meganck, the European Commission Director for Asia, Central Asia, the Middle East and the Pacific says they want to aid to boost the private sector, enabling island states to develop their economies and avoid the aid dependency trap.

Presenter: Bruce Hill

Dirk Meganck, the European Commission Director for Asia, Central Asia, the Middle East and the Pacific

MEGANCK: One of the priorities that we would like to support in the region is to so-called regional economic integration and support the region in establishing the infrastructure which makes it more friendly for private investments. So if we can achieve this with our development corporation then we achieve to improve the conditions for these countries to become more attractive for private investment and roads you can only have through economic growth with private investments.

The Development Corporation is not going to solve the problems.

HILL: Is it working in the Pacific though, because year after year, a lot of aid goes in. There's little evidence apparently on the surface that real investment, real growth is actually happening?

MEGANCK: Well, it is a difficult exercise because most of the top 6 countries are small economies, far away in a huge ocean. It's basically for them to achieve full sustainability and it is normal that in this context they need the support, hmm.

HILL: Well, what kind of support works better than others. Is it assistance to the private sector. We hear from Chambers of Commerce that they want more aid to go into helping people get into business and then being able to help themselves. Is that a priority area for the EU?

MEGANCK: Yeah, exactly. One of the priorities is to enhance regional economic integration and the examples I gave supporting the country to build I would say for private environmental, friendly infrastructure.

HILL: Do you think there will ever come a day where small island states won't need aid or will this be an ongoing need indefinitely in the future?

MEGANCK: It's not the yes or no answer. I mean the small island states have their specific problems. They need the support of bigger economic entities, neighbours of neighbours, like the European Union. But a little bit of access as far as possible to support them in terms of becoming self-sufficient and to become sustainable. That is the ultimate objective, but it's not an easy objective and we're going to take time.

HILL: Are there any countries in the Pacific which are doing better at supporting private enterprise than others?

MEGANCK: There are, there are some countries, well you mentioned a country which is doing better and Samoa is probably one of the countries where the development has been more successful, because it has become a low middle income country meanwhile, I mean all the countries. Fiji, of course, had a potential, but there we have to wait the outcome of a political processing in relation with the elections. But with that, once we would have credible elections, that would open the door for us to start and development cooperation I think with other countries and Fiji has certainly been seen as one of the potential to go relatively fast forwards in economic and social terms, eh and we have a number of ideas that we could develop with them, but you cannot get cooperation with them awaiting the outcome of the elections and hopefully they are credible, so that the sanctions, the new sanctions can, well, not all the Poms have also seen received sanctions, but the sanctions can be taken away so that we can enter into development cooperation.

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