The twenty two island countries (covered by the ILO Suva Office) of the South Pacific region spread across more than 30 million square kilometres of mostly ocean. Although almost all the countries are politically independent, with their own governments and Heads of State, for most, aid from the former colonial powers, and from other bilateral and multilateral donors, remains important for the overall health of their individual economies and the region, partly because of the relative weakness of most of the economies in the region. Agriculture, in particular the export commodities, is central to the economies of many of the Pacific islands. Other important industries include fishing; tourism and mining ( Papua New Guinea , Fiji , and New Caledonia ) depend on world prices. The high degree of dependence on such few sectors mean that the island economies are vulnerable to outside shocks, in particular to weather extremes. Economic down-swings in growth elsewhere, such as the Asian Economic Crisis (AEC) of 1997-98, had severe adverse effects on almost all the economies of the Pacific region. Solomon Islands , whose economy was heavily dependent on the export of timber and fisheries to Asian countries, was particularly hard-hit.

The small scale of Pacific island economies and low levels of (foreign or domestic) investment creates long standing problems such as none existent or weak employment growth, poverty, insecurity of land tenure and low commodity prices. There has been a decline in international trade and economic performances, which reduces tourism except in Fiji . The migration or brain-drain of skilled workers is common across the region. Most of the economies of Pacific Island Countries remain stagnant. Some of these countries depend largely on international aid and remittances from abroad.

Economic growth has not kept pace with high population growth rates, as a result per capita income has declined. Even where per capita incomes have grown, the extent of growth is insufficient to promote real development.

The private sector has not been able to lead economic growth. High rates of population growth and school drop outs (from grades II to III) make “youth employment” a major concern for all these countries. The unemployment situation is compounded by the entrance of more women into the labour market seeking formal employment.

The key to generating cash income is to enable the poor to gain access to efficient markets for goods and services and to secure decent employment. Public goods such as macro-economic stability, physical security and promotion of rule of law are essential pre-requisites to bring stability in economic growth. This in turn, requires a degree of political stability.

Many of the countries are dependent on preferential treatment for exporting their products. These arrangements are declining, which poses a great challenge for these countries to find alternative arrangements and to better manage their own resources - natural, financial and human.

In July 1997, the Forum Economic Ministers Meeting (inaugural) stated that “private sector development is central to ensuring sustained economic growth, and governments should provide a policy environment to encourage this”. Apart from encouraging the private sector, the plan aims at bringing about good governance, through public accountability and greater transparency in investment policies. Finally, the plan aims to achieve “free and open trade”, primarily through the lowering of tariff barriers, and to increase international competitiveness. Very recently (28 October 2005), the leaders of the Pacific Island Countries have approved the Pacific Plan of Action which focuses on economic growth through regional trade, sustainable development covering vocational training, good governance through strengthening judicial systems and security. Though it remains to be seen how these policies will be implemented, the future technical cooperation programme of multilateral systems will need to be aligned with the Pacific Plan in order to remain relevant to development efforts.

The political and civil insecurity in Fiji , Solomon Islands , Tonga and Papua New Guinea has weakened the economic and social institutions (tripartite) of these countries which will need long term support for proper recovery. Democracy and democratically run institutions, as well as the enhancement and/or strengthening of the institutional capacities of social partners, are vital to ensuring rights at work and to claims for a fair share of national wealth for all those who generate it. Globalisation has brought, among others, major challenges in reforming the labour legislation. Labour laws of most of the Pacific Island Countries are inherited from their former colonial powers. With the passing of time and global development, this legislation requires substantive changes and updating.

The improvement of working conditions in relatively smaller enterprises, and occurrences of work-related accidents and diseases, are of concern in almost all, if not all Pacific Island Countries. Socio-economic insecurity caused by economic trends including changes due to globalisation and new technologies is quite evident.

Social protection policy intervention and appropriate programmes can influence poverty reduction initiatives with particular reference to vulnerable groups and can mitigate the consequent erosion of human capital investment. Currently, social security in the form of provident funds is limited to the formal sector workers. Social protection mechanisms can spur growth insofar as it can be extended and when the relatively poor segment of the population can afford to undertake these schemes. It would need empowering the productive capacity of the poor for gainful engagement in economic activities.

Creating an environment for social dialogue in politically volatile societies will remain a challenge for many years to come, making it difficult to achieve the objective of social justice through the provision of decent work. Promoting harmonious industrial relations through creating tripartite institutions and the introduction of appropriate conciliation and mediation processes will be essential to reducing industrial disputes.

South Pacific Island countries are increasingly participating in world affairs, political changes, emerging global economic and social needs. It is evident that they are also getting more attention by world bodies. They are playing a significant role in the UN operations. There are fourteen UN Member States from the South Pacific countries, namely Australia , Federated States of Micronesia , Fiji , Kiribati , Nauru , New Zealand , Palau , Papua New Guinea , Republic of Marshall Islands , Samoa , Solomon Islands , Tonga , Tuvalu and Vanuatu , of which eight are ILO Member States. Australia and New Zealand are founding members (1919). Fiji joined in 1974, Papua New Guinea in 1976, the Solomon Islands in 1984, Kiribati in 2000, Vanuatu in 2003 and Samoa in 2005. With the global developments and those of sub-regional interest, these countries have realised that there is a need for raising their voices on economic and social issues in the international for a more unified way so that their common concerns are recognised and properly addressed. This has been clearly demonstrated in the development of the Pacific Plan of Action. These countries have shown greater interest in joining the ILO in pursuing their agenda for economic and social development.