EIF’s Ratnakar Adhikari on financial support to the Pacific, tourism growth in Vanuatu and region’s development potential
Dr. Ratnakar Adhikari, Executive Director of the Executive Secretariat for the Enhanced Integrated Framework (EIF) housed at the World Trade Organization, in this exclusive interview for Vila Times, talks about EIF’s projects in Vanuatu, the development of tourism, resurgence of interest in electronic commerce and Vanuatu’s most effective governmental institutions.
– Hi Ratnakar. For those who are not familiar with EIF, could you please explain, what role EIF plays in financing development projects in the LDCs (Least Developed Countries) and how all of this works.
The Enhanced Integrated Framework (EIF) brings together 24 Donors and 8 International Agencies to support the Least Developed Countries in using trade for poverty reduction, inclusive growth and sustainable development. As a global partnership, the EIF is the only global Aid for Trade programme exclusively designed for the LDCs and is underpinned by a multi-donor trust fund, which provides financial and technical support to build trade capacity in 47 LDCs and 4 graduated countries.
The EIF works with countries like Vanuatu to establish a framework in each country, including at the policy level, which sets and guides trade priorities (such as the Trade Policy Framework) as well as the institutional level (through the National Trade Development Committee and Trade Development Division). Through these mechanisms, as well as catalytic investments from the EIF Trust Fund, we work with countries to leverage resources to implement these priorities through governments, donors and other partners.
– So we can say that EIF is sort of a middleman between the LDCs and aid providers in developed countries?
EIF acts as a bridge between the EIF Donors and the LDCs, but it remains a framework for catalytic support helping the LDCs in leveraging resources and scaling up interventions with a view to enhancing the impact of support.
– How does the EIF country-level structure work? I am particularly interested in what is the normal procedure for financing the projects, EIF is involved with, and who is responsible for managing funds.
In each country that the EIF works with a governance structure is developed. This includes a high-level EIF National Steering Committee – in the case of Vanuatu, this is the NTDC; a technical team to leverage and coordinate Aid for Trade interventions, implement some EIF projects and service this committee (the Trade Development Division), as well as a donor counterpart through a representative donor appointed as the EIF Donor Facilitator. Since country ownership is at the heart of the EIF, the requests for funding projects through the EIF Trust Fund are prioritized through the NTDC and are then sent to the EIF. The decision for funding the projects is then taken by the global Board of the EIF.
– EIF has been involved in Vanuatu’s VTIP project. This project was about the renovation of the seafront of Port Vila. And its total budget was US$18.8 million, according to official documents. Really, really huge amount, considering the final result.
So what I wanted to ask: how EIF deals with misuse of funds for such a projects?
The EIF has strong fiduciary procedures in place to monitor and oversee EIF projects, including regular reporting and technical and fiduciary supervision visits. All EIF projects are contracted through the United Nations Office for Project Services (UNOPS), who has dedicated specialists based in each region that the EIF operates in.
This specific VTIP project was jointly (and in majority) financed by the Government of New Zealand, which also included additional levels of oversight and accountability. Such quality infrastructure projects cost significant amounts of money, however, they will provide the backbone for economic activities in the area for years to come. At the country level, the EIF National Steering Committees, with representatives from various branches of the Government, the private sector, donors and civil society play a critical role in the oversight of the projects.
‘High value/low impact tourism could have significant benefits, particularly when developed in an inclusive manner’
– Let’s talk about the development of tourism in the Pacific. A number of experts I have spoken to, think the Pacific Islands countries in general and Vanuatu in particular should be developing primarily the VIP “elite” tourism segment. Would you agree?
A significant amount of research has recently been done in the development of tourism strategies for Pacific Islands countries, and for each country, or even for different islands, there could be alternative or complementary focus areas. However, in general, high value/low impact tourism could have significant benefits, particularly when developed in an inclusive manner, with strong linkages to the local economy frontloading the agenda of enhanced participation of, and benefits flowing to, local communities.
– Another rather common opinion is that on the global tourism market countries in the Pacific do not really have much unique to offer to attract mass tourists when compared to, for example, South East Asia.
The Pacific has an enormous amount to offer due to factors unique to the region. Some of these aspects also mean that the kinds of tourism developed in Southeast Asia, with a much larger overall population, land connections and semi-mature nature of tourism industry itself for instance, would not be as applicable to the Pacific region.
‘Vanuatu is a prime example of the rapid growth of tourism, which already accounts for a very significant percentage of its GDP’
– But how the Pacific Islands countries can successfully move towards mass growth in tourism without having an advantage over other regions in any of key areas?
Vanuatu is a prime example of the rapid growth of tourism, which already accounts for a very significant percentage of its GDP. Unlocking constraints such as key infrastructure in the form of adequate air and sea ports is important. However, some of these investments can lead to incremental benefits in the short-term, and when addressed altogether, in the medium-term, the benefits can be compounded. The concept of “mass growth of tourism” should be further qualified as targeting an increase in the number of visitors and needs to be assessed in conjunction with the inclusivity of the economic benefits that each visitor brings to the local economy as well as other factors, such as environmental impacts. Therefore, the Pacific Islands countries should focus mainly on their unique selling proposition rather than on mass tourism opportunities.
– So which country in the Pacific, you think, at this point has the most significant growth ahead, short term (4-5 years)?
The programme that I work with is currently supporting tourism development projects in Vanuatu, Samoa and the Solomon Islands. For each country, there is significant potential, hence the prioritization of these areas for support and investments from the EIF.
‘Electronic commerce is an area where Pacific Islands countries can readily overcome traditional constraints of distance to markets’
– Which industries, besides the obvious tourism, fishery and agriculture, in your opinion have the most potential for investments in the Pacific nowadays?
Globally, there is a resurgence of interest in electronic commerce, and this is an area where Pacific Islands countries can readily overcome traditional constraints of distance to markets. This can be from adding value in tourism, fisheries and agriculture through to offering other forms of services through ICT infrastructure. The EIF has recently completed an e-Trade readiness assessment in Samoa together with the United Nations Conference on Trade and Development (UNCTAD), and such assessments are currently being undertaken in Solomon Islands and in Vanuatu.
‘In countries like Vanuatu, Samoa and the Solomon Islands we have seen some of the most effective institutions develop’
– One of the main problems for the overall development of the Pacific is a very low effectiveness and level of competency in all governmental institutions. You think it is possible to solve this problem on a short- to mid-term basis, nowadays in the modern world, or remoteness and other objective factors still play the crucial role?
This can be a challenge wherever you are. I would like to, however, turn this around and say that in countries like Vanuatu, Samoa and the Solomon Islands we have seen some of the most effective institutions develop. In Vanuatu, for instance, the Trade Policy Framework with implementation being monitored through the National Trade Development Committee (NTDC) now serves as a prime example of good practice in the coordination and governance of trade, and Aid for Trade matters, as does the Trade Development Division in the Ministry of Tourism, Trade, Commerce and Ni-Vanuatu Business. These are examples and lessons that the Pacific can provide for others. However, again, although there is existing good practice, there is always space to continue to improve and adapt.