by Samantha Cook
For many Pacific Island countries, Australia is one of their most important trading and investment partners. For decades Australian businesses have fostered and maintained relationships. Yet there are more business opportunities to further strengthen trading ties and mobilise new sources of investment.
For many of Australians, our knowledge of the Pacific is superficial: a week spent lazing by a pool or docked in a port on board a cruise ship. However, the overarching significance of our relationship is that as a large regional player, stability and prosperity within the region matters as much to us as it does to our neighbours.
I was asked recently why, as someone with Asia capabilities who has lived in China, my career focus is on the Pacific Islands, as though this decision was exotic and far-fetched.
The reality for Australia is that we are part of the Asia-Pacific region with a foot in each camp. Most of us are acutely aware of the importance of our economic relationship with Asia, but many Australians find it difficult to see why our relationship with the Pacific matters.
Just as Australia is well positioned for the Asian Century, we also have a chance to make an impact in the Pacific.
CUMBERSOME LAWS AND REGULATIONS
However, there are challenges to economic development through commerce. Aside from the environmental obstacles (including the geographic remoteness of many Pacific nations) and political instability, barriers to investment include cumbersome laws and regulations; the system of legal pluralism that operates in many post-colonial countries can also give rise to unpredictability.
Many countries within the Pacific also face social issues such as burgeoning youth populations, rising levels of unemployment and gender inequality. Economic inclusion, particularly through small to medium enterprises is a way to mitigate these challenges.
Making business collaboration an attractive proposition for overseas businesses is challenging. Often small businesses are perceived as too small for Australian businesses to invest in and too risky for a bank. As a result the lack of access to capital means they struggle to thrive.
Pacific organisations are working to address these challenges by providing training for small business owners and, at a regional level, are working to formalise more favourable business environments. Similarly, the Australian government has called upon Australian financial institutions operating in the Pacific to assist in private sector development, signing a memorandum of understanding with each of Westpac and ANZ to promote financial inclusion, particularly for women.
The Australian government has (along with other donors) provided aid to bolster private sector participation. For example, to promote law reform such as the rollout of secured transactions frameworks across several Pacific Island countries. This will mean certainty for lenders and the ability of borrowers to utilise a wider range of property as security.
PRIVATE SECTOR VITAL
Ultimately, the success of these actions rests on the private sector's willingness to participate. For that to happen we need to stop viewing the region, as an aid recipient and view it as opportunities in emerging markets. Australia's strong business position in the region reveals the opportunities for profit-making, and as the region grows, should mean a 'first mover' advantage for Australian businesses in these opportunities. This change of perspective will enable the private sector to make an even greater contribution to economic growth through a combination of financial capacity and technical skills and resources.
Working with clients in the region, I see how Australia's business-to-business exchange in the Pacific is mutually beneficial and contributes to economic advancement. Whether through creating jobs, providing training and skills development, supplying products or services or deepening financial markets Australian institutions are in a unique position to do business in these nearby emerging markets; this private sector participation matters because it assists in achieving the shared ideal of a stable and prosperous Pacific.
Just as our relationship with Asia is important, so is our connection with the Pacific Islands. While I don't think I have chosen the Pacific over Asia (in fact, maybe it chose me), what is certain is that the region matters and like Australia, I am fortunate to experience both.
Samantha Cook is the recipient of the 2016 BOSS Emerging Leaders MBA Scholarship at the University of Sydney Business School. She is a corporate lawyer and has worked in Australia, China and the Pacific region. She was a delegate of 2013 Australia-China Youth Dialogue.
Retrieved from http://www.afr.com/brand/boss/why-doing-business-in-the-pacific-matters-20160311-gngg9e